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Watchdog report

PPE contracts awarded with ‘inadequate’ checks

FFP3 face masks

Government acted quickly to order PPE equipment, but with too few checks

Contracts worth £18 billion for Covid-related goods and services were dished out to companies without sufficient checks, according to the UK government watchdog.

The National Audit Office (NAO) found firms recommended by MPs, peers and ministers’ offices were given priority.

In a damning report it said there was inadequate explanation of key decisions, about why particular suppliers were chosen and not enough done to address potential conflicts of interest.

The government “was procuring large volumes of goods and services at high speed to respond to the COVID-19 pandemic”, said the NAO.

According to the NAO’s report, more than 8,600 coronavirus contracts had been awarded by 31 July, ranging in value from less than £100 to £410m.

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New contracts worth £17.3bn were awarded to suppliers, of which: £10.5bn were awarded directly without a competitive tender process and companies with no experience supplying PPE won lucrative deals.

The government acknowledged it had procured services with “extreme urgency” due the crisis but defended its actions because of the unprecedented circumstances.

The review found that while there was evidence for most controls being applied, there were some gaps in the documentation, such as why some suppliers which had low due diligence ratings were awarded contracts.

The cross-government PPE team considered that leads referred from these sources were more credible or needed to be treated with more urgency and established a “high priority lane”.

About one in ten suppliers processed through the high-priority lane (47 out of 493) obtained contracts compared to less than one in a hundred suppliers that came through the ordinary lane (104 of 14,892).

The sources of the referrals to the high-priority lane were not always documented in the case management system and the NAO found a case where a supplier, PestFix, was added to the high-priority lane in error.

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Gareth Davies, head of the NAO, said: “While we recognise that these were exceptional circumstances, it remains essential that decisions are properly documented and made transparent if government is to maintain public trust that taxpayers’ money is being spent appropriately and fairly.

“The evidence set out in our report shows that these standards of transparency and documentation were not consistently met in the first phase of the pandemic.”

The report comes after its was revealed on Tuesday that a Spanish businessman who acted as a go-between to secure protective garments for NHS staff in the pandemic was paid $28m (£21m) in UK taxpayer cash.

The consultant, Michael Saiger, had been in line for a further $20m of UK public funds, documents filed in a US court reveal.

The NAO looked in detail at 20 contracts including:

  • A deal with research firm Public First, whose owners had “previously advised or worked with” Cabinet minister Michael Gove.
  • Artificial intelligence company Faculty, which was awarded contracts worth almost £3m. Cabinet Office minister Lord Agnew owned a £90,000 stake in the firm but has since relinquished it.
  • Ayanda Capital supplied 50 million masks that could not be used for their original purpose at a cost of £155m. The deal was brokered by a businessman who was an adviser to the government’s Board of Trade at the time.
  • PestFix, a pest control company, was given contracts worth £350m, which included delivery of 600,000 masks which cannot be used for their original purpose.

The NAO concluded that in cases of potential conflicts of interest involving ministers, all had properly declared their interests and it found “no evidence of their involvement in procurement decisions or contract management”.



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