UK awards contracts worth £33m for Covid-19 consultancy

8 June 2020

The UK public sector awarded nearly 400 contracts worth £1.6bn in response to the Covid-19 crisis, mostly without a competitive tender, according to a report.

Research company Tussell’s report found that more than 90% of the value of Covid-19 response contracts were awarded by central government, compared to 5% for local government and 3% for the NHS.

Contracts were signed off mostly with minimum oversight to provide services ranging from the procurement of medical and protective equipment to administering testing and advising civil servants.

Emergency procurement measures that were put in place in March allowed companies and the government to forego the usual competitive tender process.

The report said public sector procurement was showing tentative signs of recovery, with 18% more opportunities published in May than the month prior.

This took the number of invitations to tender (ITTs) published by the UK public sector to 1,248, still only half of the 2019 monthly average of 2,400, but enough to show signs of recovery.

The single largest contract area consisted of two large contracts for food to support vulnerable adults and children awarded by the Department for Environment, Food and Rural Affairs and the Department for Education (DfE).

Testing and PPE were the next two largest contract areas, with the Department of Health and Social Care (DHSC) responsible for most spend.

The Business Services Organisation of Northern Ireland awarded £170m worth of PPE contracts, and 27 contracts worth £33m have been awarded for consultancy support for the Covid-19 response.

Big winners from the contracts have included PwC, which has won seven contracts to support the Covid-19 public sector response, more than any other single supplier.

Two medical firms have won six contracts each while a quarter of the contracts so far published were won by companies that had not previously carried out work for the government.

The report said: “The bulk of Covid-19 response contracts have been awarded without a competitive tendering process.

“We might expect that would lead to an overreliance on existing suppliers, but this seems not to be the case. A quarter of Covid-19 response contracts were awarded to firms that have not previously been named on a publicly published government contract.”

The largest contract that has been published was for £234m to Edenred, the childcare vouchers business, to deliver supermarket vouchers while schools are closed to families who would normally get free school meals from the DfE.

The DHSC awarded four of the largest contracts for coronavirus testing, including £151m to Hologic, £133m to Randox Laboratories and £64m to Life Technologies. The report said that even though departments must publish a contract award notice within 30 days of its agreement, significant deals have not yet been made public such as those relating to seven Nightingale field hospitals or the UK’s new contact tracing programme.

Tussell warned government suppliers to expect disruption to current or future bids as there has been a significant increase in the number of cancelled procurements in the last month, and this disruption was likely to continue for some time.

“Re-procurement is a time-consuming and expensive process. Buyers are likely to prefer to extend existing contracts where possible,” the report said.

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