NAO to probe transparency of government procurement during pandemic

Auditor general says spending watchdog will produce ‘detailed piece of work’
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By Sam Trendall

21 Sep 2020

The head of the UK’s public-spending watching has said the organisation will publish an in-depth report examining government’s procurement practices during the coronavirus crisis.

The examination will pay particular attention to criticisms of a perceived lack of openness in the awarding of contracts, according to the head of the National Audit Office, Gareth Davies.

“We’re looking at the procurement process, a lot of public comments and concern about the transparency of some of the procurement contracts around PPE and other areas,” Davies told the Guardian. “We’re doing a detailed piece of work.”

Shortly before the UK went into lockdown in March, the Cabinet Office published a procurement policy note advising that, due to the widespread need to purchase goods and services with “extreme urgency”, public sector buyers should, if they felt it was necessary to do so, directly award contracts to suppliers without opening the opportunities up for bidding.

Government was also advised that it could, where needed, seek to modify, expand or extend existing engagements. 

The policy note also recognised that “prices may be higher than would be expected in a regular market”.

An examination of data published on government’s Contracts Finder website reveals that numerous public sector bodies have made use of the increased ability to forego competition and directly award deals – particularly for the provision of healthcare-related products and services, such as personal protective equipment and ventilators, and for support with coronavirus-related research projects.

But areas such as management consultancy and the procurement of tech equipment have also seen buyers take advantage of the more relaxed environment.

The Treasury, for example, has extended its long-standing £250m contract with NTT Data for “core IT services” into an eighth year. The deal had been due to expire in June of next year, but will now run until summer 2022.

Crown Commercial Service has also invoked regulatory allowances to extend a range of existing frameworks beyond their usual 48-month limit. The aim of which has been to allow public sector buyers to more easily procure goods directly from suppliers or via quick, small-scale competitions – rather than conducting a full tender process.

In the buying agency’s annual report, chief executive Simon Tse said: “This allowed us to extend 12 commercial agreements that were coming to the end of their four-year term and had no further lawful extensions available, supporting suppliers and our customers in this extraordinary situation. We also used lawful extensions to extend two further agreements that were due to be replaced in 2020.”

Despite the more permissive environment of recent months, the Cabinet Office policy note published in March instructed public organisations to record all instances in which deals they had bypassed usual procurement procedures to award deals directly, extend or expand existing arrangements, or pay more than they may have ordinarily paid. These records will likely be subject to later audit, buyers were advised.

Sam Trendall is the editor of CSW's sister site PublicTechnology, where a version of this story first appeared.

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