Response to article published by the New York Times on UK government procurement
Response to article published on 17th December.
At the height of the crisis in April, health services around the world faced an unprecedented urgent situation where demand for personal protective equipment (PPE) and other medical equipment, including testing supplies and ventilators, far exceeded supply, and global production and supply chains were under severe pressure. The government pledged to do whatever it took to protect the people who protect us, deploying hundreds of officials to work night and day, at great speed, to source as much PPE as quickly as possible to protect the NHS and care sector and save lives. We also mobilised huge resources to increase testing capacity and deliver other important medical equipment.
On 17 December, the New York Times published an article, “Waste, Negligence and Cronyism: Inside Britain’s Pandemic Spending.” The article makes a number of incorrect claims, uses poor methodology and excludes important context about the challenges faced by the UK Government and other public authorities during the unprecedented global pandemic.
Claim: “The government handed out thousands of contracts to fight the virus, some of them in a secretive “V.I.P. lane.”
Response: At the peak of the pandemic, UK Government officials were inundated with approaches from companies and other commercial actors with offers to procure or provide PPE and other relevant equipment. To help establish a mechanism for handling the approaches, as well as increase the speed at which they could be dealt with, an inbox was created for referrals. This inbox was available across government and to parliamentarians from all parties. In total, the UK government received over 15,000 offers of support from businesses to help with PPE, and MPs were inundated with offers of help from their constituents. MPs rightly were keen to pass on offers.
The government remains hugely grateful for the outpouring of offers of help and the high priority mailbox allowed procurement officials to assess more quickly offers from more credible sources, such as large companies with established contacts and those more capable of supplying at speed.
The government also ensured that offers of support raised by Opposition MPs were dealt with expeditiously. As the National Audit Office report notes, all PPE offers, no matter from where they came, went through the same eight step official assurance process, including quality checks, price controls and other due diligence. This eight step process has been published in the NAO’s report.
Claim: The New York Times “analyzed a large segment of it (government spending), the roughly 1200 central government contracts that have been made public, together worth nearly $22 billion. Of that, about $11 billion went to companies either run by friends and associates of politicians in the Conservative Party, or with no prior experience or a history of controversy”.
Response: The New York Time’s definition of ‘politically connected’ is misleading. As the article sets out, they defined this as ‘companies with political connections were defined as those with current or former government officials and advisers on staff, as party donors or who have received a British honors system award, such as a knighthood or peerage’.
This definition fundamentally misunderstands the British state. government officials - or civil servants - are politically neutral and therefore it is simply wrong to infer that they have political connections. The New York Times also considers those who received a state honour as having a political connection. Again it is either a misrepresentation or a misunderstanding of the honours system to assert that someone receiving an honour automatically has a ‘political connection’. In fact, the honours system operates independently of government, with the vast majority of honours recommended by independent honours committees.
Finally, this implies that any company with a ‘connection’ to the government got a contract as a result of that connection. The National Audit Office examined a series of contracts and “found that the ministers had properly declared their interests, and … found no evidence of their involvement in procurement decisions or contract management”. This was not reflected by the New York Times.
Claim: “Smaller firms without political clout got nowhere”.
Response: This is again factually untrue. ‘Political clout’ played no part in the official procurement process. For example, all PPE procurement went through the same eight checks, including quality checks, price controls and other due diligence, and was assessed against the same standards.
It is untrue to suggest that smaller firms, SMEs, did not receive contracts.
Claim: “The government had license to act fast because it was a pandemic, but we didn’t give them permission to act fast and loose with public money”.
Response: This is not true. The eight step official process assessed and scruitinsed PPE offers. While prices were higher, due to a surge in global demand and constraints of supply, the government put in place stringent checks to ensure that we were paying in line with market rates. Officials with procurement expertise ran this process. Governments across the world and devolved administrations and local authorities in different parts of the UK faced similar challenges. Indeed, OECD analysis shows that direct awards were used by countries across the world in order to increase PPE supply, such as some EU countries, Japan and New Zealand.
Claim: “The procurement system was ‘cobbled together”.
Response: This is untrue. Our system was established and run by experienced procurement experts. The system enabled us to act quickly to ensure that we saved lives.
Claim: “The government cast aside the usual transparency rules and awarded contracts worth billions of dollars without competitive bidding”.
Response: This is untrue. Pre-existing regulations (the Public Contracts Regulations 2015) allow public authorities to award contracts without competitive tender in circumstances of extreme urgency. An unprecedented global pandemic, with global demand pressures on PPE, was clearly an emergency. It was right that the government acted quickly - and within the existing regulations - to increase PPE available to the NHS front line. Direct awards were made by public administrations across the UK and various local authorities. Similar approaches were adopted by many other countries, including Japan, Finland and New Zealand. It is absurd to imply that the government ought to have run a full public procurement competition for PPE contracts at the height of the pandemic. The minimum number of days a competitive award could take place in under the current rules is 25 days. This would have hugely slowed down the buying of vital PPE supplies.
Claim: “To date, just over half of all of the contracts awarded in the first seven months remain concealed from the public.” “The British central government published data on pandemic-related contracts worth $22 billion awarded from January through November. Many more contracts remain secret”.
Response: It is misleading to suggest that the contracts which are yet to be published through routine transparency are ‘secret’. The Government has already stated that we will publish all contract award notices as part our commitment to transparency. We regret that some contracts have not been uploaded in a timely fashion as a result of prioritising staff’s time on securing life saving PPE and other equipment for the NHS. All contracts will be published as soon as possible. All contract awards for PPE have now been published.
Claim: “Around $6 billion went to companies that had no prior experience in supplying medical personal protective equipment. Fashion designers, pest controllers and jewelers won lucrative contracts”.
Response: Finding new suppliers, who may not necessarily have direct prior experience of supplying PPE, was a deliberate policy - alongside exhausting existing supply routes. Clothing companies, for example, were an obvious route to new PPE supplies. As the article later acknowledges, many companies, such as the fashion brand Burberry, did create new production lines and successfully produce critical supplies. It is unclear if the New York Times thinks it was wrong for the government to contract with these companies which successfully produced PPE for the NHS frontline.
More importantly, analysis showed that the vast majority of the PPE procured by the government during the coronavirus crisis met the required clinical safety standards, which is especially impressive given the supply chain issues, the urgency of the situation, the speed at which staff had to work and the need to explore novel routes. We found that only 0.5% of products tested to date cannot be used. The point has been made above on why many companies repurposed their activities in order to supply PPE during increased global demand.
Claim: “There is ample evidence of cronyism, waste and poor due diligence”.
Response: The National Audit Office report last month recognised that the government ‘needed to procure with extreme urgency’ and ‘secured unprecedented volumes of essential supplies necessary to protect front-line workers’. As set out above, the government does recognise that at a time of unprecedented global demand, prices were inflated for typical levels, but does not accept that process was not followed. It is untrue to say there is ample evidence of waste. We found that only 0.5% of products tested to date cannot be used. We have outlined above the stringent due diligence which took place.
Claim: “The crisis gave way to a system that was neither fair nor equitable”.
Response: This is not the case. All offers of PPE, no matter where they came from, were assessed against the same criteria and went through the same eight step checks. This meant that potential suppliers were assessed against the same standards, such as whether their product met our high PPE standards and whether they could supply PPE at an adequate scale.
Claim: “Junior staffers reviewed thousands of proposals and passed on a chosen few to their bosses, who often had only a day to sign off on contracts.”
Response: This reflects the speed at which the PPE market was moving at the time, and is why it was not possible to run even accelerated public tendering processes, which take a minimum of 25 days. It was right that we put in place the processes needed quickly to take up offers of support. Contracts were only agreed once due diligence and price checks took place, through the process detailed above. We needed to act quickly to ensure that we ordered life saving PPE for the NHS front line.
Claim: “Still, conflict of interest questions remain” (around Lord Deighton).
Response: Lord Deighton had no role in approving PPE contracts and no role in the COVID19 response beyond PPE. We have robust rules and processes in place in order to ensure that conflicts of interest do not occur. All conflicts of interest for Lords are declared on the House of Lords Register. Following Lord Deighton’s offer to support the government in any way he could, he was appointed an advisor on PPE to the SOS on 19 April. Lord Deighton’s role initially was to help set up U.K. manufacturing of PPE. Over the next few weeks this developed into a broader advisory role across the PPE programme.