The Department of Health and Social Care has opened the tender process for £25m worth of contracts to transport medicines and other time-critical goods into the UK in the event of a no-deal Brexit.
Companies have been invited to bid for contracts to provide so-called "express freight services" to transport goods into the UK in a no-deal sceenario for the second time in under a year – this time in an open tender process.
And in a second departure from the Department for Transport’s controversial bid to secure no-deal freight capacity last year, DHSC has said it expects to pay only £3.9m of the total £25.08m value of the contracts. The rest will be paid directly to the freight companies by suppliers, according to a contract notice published today.
There are three contracts on offer to transport medicines and other medical products “where there is an urgent need or where a suppliers' own logistics arrangements are disrupted”. Each will run for 12 months with the option to renew for a second year.
Suppliers can use any mode of transport to transport the goods, as long as it meets the timescale requirements and conditions of carriage, and can mitigate foreseeable disruption to services, the health department said.
The two biggest contracts, worth £16m and £5.2m respectively, are to transport goods that are mostly “standard, non-temperature controlled, non-hazardous, and require no extra security measures”.
The third lot, labelled “specials” and worth £4m, is to transport temperature-controlled goods, controlled drugs that must be stored and moved according to strict Home Office regulations, and certain medicines.
The successful bidder for the specials contract will also be in charge of moving time-sensitive shipments, substances of human origin including blood, tissue and organs, and hazardous materials.
Companies bidding for each of the three contracts must be able to meet specific capacity requirements – 30m3, 50 Euro-pallets and 5m3 a day respectively – which they must be able to increase or decrease by 50% at a day’s notice.
The notice was published nearly a month after Cabinet Office minister David Lidington announced that the health department had been entrusted with making arrangements to keep the supply of medicines flowing into the UK if the government does not reach a withdrawal agreement with the EU before 31 October.
Lidington said at the time that the department would only pay for services it used. In May the government paid £51.4m to cut short agreements DfT had signed with ferry companies in preparation for the original Brexit deadline of 29 March, as the contracts did not allow for the possibility of an extension.
DfT had already come under fire for handing out three contracts, initially worth over £100m altogether, using emergency procurement legislation rather than via an open tender process. One of the three deals, with Seaborne Freight, was later scrapped after it became apparent the company could not deliver the agreed services.
In a damning report this month, parliament’s Public Accounts Committee said the department’s “rushed and risky” procurement exercise had cost the taxpayer £85m with little discernible benefit.
The sum included £33m the government paid to Eurotunnel in an out-of-court settlement after the rail operator sued the department over its handling of the contracts. The ferry company P&O Ferries has since launched legal action to recover the same sum, saying the Eurotunnel payout was anticompetitive.
In the coming weeks, DfT will launch a second procurement exercise to establish a “freight capacity framework” to enable other government departments to secure services where needed.