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John Tizard: NAO enquiry into Government COVID-19 procurement is welcome.

Thursday October 29th, 2020

As part of its consideration of the Government’s response to the COVID-19 pandemic, the National Audit Office (NAO) is preparing a report, to be published later this year, which will consider: the scale of COVID-19-related procurement; to what extent (if any) procurement rules have changed as a consequence; and how the Government is managing the risks associated with these changes. Using a sample of contracts awarded during the pandemic, it will consider who has bought what, from whom, and at what cost.  I hope that its exploration will go further.

Government expenditure on outsourcing, consultancy, equipment, goods and logistics as part of its response to COVID-19 has been very significant, continues to grow by the week and is likely to continue to do so. There is a public interest in understanding what has been spent, on what and from whom. There are wider issues of public interest too, not least about the procurement processes, and the appropriateness and effectiveness of the expenditure.

In May this year, I wrote a piece for Government Opportunities noting that public procurement, whilst having a vital role to play in the public health response to COVID-19, could not avoid being a key focus of any future public enquiry into the wider handling of the crisis.

The case for such an enquiry has been reinforced by the flow of media reports, questions in Parliament and public questioning of: the procurement processes; the selection of providers of both services and equipment; and subsequent contractual terms and performance – for all of which, there must, of course, be both transparency and ultimately, accountability.  Some of the information already in the public domain gives rise to some fundamental questions and concerns ranging from value for money and effectiveness to probity and public confidence.

Of course, during the crisis, there will obviously have been occasions when full-blown procurement to EU regulatory standards may not have been feasible. Fair enough. However, this is not the same as suggesting that there should be no basic requirements in order to guarantee probity, test for value for money and public benefit, and undertake due diligence on potential suppliers. That said, some procurements (perhaps many) have raised valid questions, to which there have been few answers.

Accordingly, a NAO investigation and report followed by an enquiry by the Public Accounts Committee is an important and appropriate first step, prior to a wider public enquiry being established. The latter should, of course, build on the excellent work already undertaken by the NAO on the Government’s policy and operational response to the pandemic.

I hope that the investigation and report will ask some fundamental questions about the Government’s apparent preference to contract a range of COVID-19 related services – one being its original ‘test and trace’ programme, ahead of engaging and funding local authorities and their NHS partners as the lead bodies for the programme.

It should then explore a range of issues, ask some critical questions, and provide evidence and factual information. Evidence and facts are essential, especially given the level of public and political interest, and the overarching need during a public health crisis to maintain public confidence. The NAO enquiry can certainly contribute to securing political accountability and suggesting lessons for future pandemic-related procurement, of which, sadly, there will be much more. It should also be an important contribution to ensuring the integrity of public procurement and the public procurement profession.

Accordingly, I urge the NAO to address the following twelve questions:

  • how many COVID related procurements and contracts have there been?
  • for each one, where a normal procurement process was bypassed and a fast track approach adopted, why was this (accepting that there will have been cases when such an approach was justifiable)?
  • for which contracts was there no competitive process and why; what criteria were used to make such a decision?
  • in those cases when there was no competitive process, were there other potential suppliers and how/why was the preferred supplier selected?
  • what (if any) due diligence took place? And did this due diligence consider past performance records, the capacity and capability of the contractor, the ownership of the contractor, and any key relationships between senior executives and/or shareholders/owners of the contractors and politicians, political advisors or officials?
  • has there been any benchmarking of price and quality/performance?
  • have specified levels of quality and performance been delivered?
  • how has any underperformance or failure to meet delivery targets and quality been addressed and providers and contractors held to account?
  • what safeguards and controls have been included in the contracts to protect the public interest?
  • do contract terms apply to prime contractors’ supply chains; and what controls and visibility does the procuring body have over supply chains?
  • what criteria were applied when contracts were either extended or renewed – and what regard was given to current performance on the contract?
  • were there any interventions at any stage of the procurement and contracting process, either by ministers and/or their special advisors; and if so by whom and to what effect?

Whilst the focus of the investigation will be on the Government’s central procurement and the resultant contracts, there would be much benefit if the NAO were also to consider comparisons with the behaviours and performance of local authority and NHS procurement for similar equipment, goods and services. International comparisons would be great to have too.

The coming months are going to be very challenging and demanding for everyone, as COVID-19 remains a threat to life and livelihoods. The Government has already spent and will continue to spend vast sums of public money on dealing with it and its consequences. Some of this will inevitably have to be via fast track procurement processes but in these cases, there must be full transparency of process, decisions and performance, and accountability.

Still, all lessons must be learnt, and it remains vital that there is transparency and accountability for this expenditure. It is also essential that there is public confidence in the allocation of public monies, and in the Government’s handling of the larger aspects of the existential COVID pandemic.

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