Review recommends Care Quality Commission further strengthens procurement processes following errors

9 June 2015

The Care Quality Commission (CQC) has acknowledged procedural errors in two procurements in 2013, outlined in a Department of Health review.

The Department of Health (DH) reviewed two CQC procurements from February 2013 after a whistleblower alleged there had been a failure to comply with government procurement rules.

The contracts, for CQC’s organisational design and for the development of a risk-based intelligence, were awarded to McKinsey & Company.

The review, carried out by the department’s Health Group Internal Audit concluded there had been “procedural errors” in relation to the rules, and it has asked CQC to implement measures to strengthen its procurement processes.

The audit recognised CQC’s primary focus at the time was on fulfilling the objectives set for the organisation following the Francis Report. But DH said for the risk-based intelligence contract, pre-tender mistakes allowed McKinsey exclusive access, which gave it “at least a perceived advantage”. For the organisational design contract, there were also pre-tender mistakes that allowed McKinsey exclusive access. In addition, procedural errors in considering tender responses, including McKinsey being given preferential treatment in the evaluation stage, gave it an advantage.

CQC did not keep a full audit trail of documentation concerning the procurement exercises, the review also concluded.

But the study added: “We found no evidence that the changes to how the tenders for the organisational design contract were evaluated, or anything else, was motivated by improper financial gain, or any motive other than a belief that McKinsey would be the best choice at a time when urgent action was seen as important.” It added there had been no allegations in relation to, or inappropriate behaviour by, McKinsey.

In a written response, CQC chief executive David Behan said: “CQC accepts the findings of the review and I regret that there were procedural errors in the way these procurements were handled. We have made substantial improvements to the way we carry out procurements, and now have clear professional leadership of our procurement function through the appointment of a head of commercial and contracts post.”

Behan blamed the errors on the pressure the commission was under at the time to introduce radical changes to the way it inspected health and adult social care services and how it was organised and managed.

“The drive for these important changes was to ensure that CQC was ready to respond quickly to Sir Robert Francis QC's report from his Mid Staffordshire Public Inquiry, and also to enable the government to make an early commitment to create chief inspector roles within the CQC. CQC regrets in the haste to make changes, some procurement procedures were not correctly followed,” Behan said.

The Health Group Internal Audit report acknowledged the steps already taken by CQC to improve procurement, but also recommended a structured programme of training across to embed procurement principles and processes. It should also conduct an internal review of its procurement practices and procedures.

CQC said it had already addressed some of the issues raised by measures including procurement thorough its Investment Committee, more procurement training for senior and middle managers, and its Internal Audit Plan.

“I am committed to CQC achieving excellence in everything we do, including procurement, and continuing improvement is a key pillar of our priorities for 2015-16,” Behan said.

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