20 July 2007 | Helen Gilbert
The Department of Health (DH) "failed in its duty" to be transparent when it selected a data company without a competitive tender, the Committee of Public Accounts has found.
The report, Dr Foster Intelligence: A Joint Venture Between the Information Centre and Dr Foster, published this week, criticised the methods used by the DH when it entered into a joint venture for an information centre with data firm Dr Foster in 2005.
By failing to advertise the deal or hold a competition, the DH and the Information Centre, an arms-length body that provides information to the health service, let it appear the joint venture offered an advantage to one company at the expense of others, it said.
The committee report added that without open competition, the Information Centre could not demonstrate it paid the best price for its 50 per cent share of the joint venture, because there were no tenders or other benchmarks for comparison.
Edward Leigh MP, Conservative chairman of the committee, said: "There was no fair and competitive tendering competition, as laid down in public sector procurement guidelines. And Treasury guidance on joint ventures between public and private sectors was ignored. Instead, the deal was handed to Dr Foster on a plate."
However, a DH spokesperson said: "Dr Foster was the right strategic choice as a partner for the joint venture, based on the market analysis and due diligence that was carried out before and during the negotiations and on the subsequent performance of the joint venture."
The committee urged the DH and its subsidiary bodies to always consider a competitive bidding process and, in the absence of potential competitors, seek appropriate benchmarks.