Background to the report
In responding to the COVID-19 pandemic, public bodies have needed to procure enormous volumes of goods, services and works with extreme urgency. On 18 March 2020, the Cabinet Office issued information and guidance on public procurement regulations and responding to the pandemic. This guidance noted that public bodies are permitted to procure goods, services and works with extreme urgency using regulation 32(2)(c) under The Public Contracts Regulations 2015. This sets out the various options available to public bodies if they have an urgent requirement for goods, services or works due to an emergency such as COVID-19, including the use of direct awards to suppliers without any competition.
Concerns have been raised about the risks to public money that could arise from greater use of this regulation. For example, we have received over 20 pieces of correspondence from members of the public and members of Parliament raising concerns about the transparency of contracts being awarded during the pandemic, potential bias or conflicts of interest in the procurement process, and that some contracts may have been given to unsuitable suppliers.
Scope of the report
This investigation sets out the facts relating to government procurement during the COVID-19 pandemic covering the period up to 31 July 2020. It covers:
- the need to procure goods, services and works quickly, the regulations that apply to this, and roles and responsibilities (Part One);
- procurement activity during the pandemic (Part Two); and
- management of procurement risks (Part Three).
This investigation covers procurement by government departments and their arm’s-length bodies but does not cover procurements carried out by NHS trusts, NHS foundation trusts and local authorities on their own behalf. This work does not evaluate the value for money of the contracts awarded over this period. It is part of a wider programme of work related to government’s response to the COVID-19 pandemic.
In the months following the emergence of the COVID-19 pandemic in March 2020 in the UK, government awarded around £18 billion of contracts using emergency procurement regulations to buy goods, services and works to support its response to the pandemic. Government was having to work at pace, with no experience of using emergency procurement on such a scale before and was developing its approach at the same time as procuring large quantities of goods and services quickly, frequently from suppliers it had not previously worked with, in a highly competitive international market. This procurement activity secured unprecedented volumes of essential supplies necessary to protect front-line workers. Our separate report on the supply of PPE looks in detail at the extent to which demand for that equipment was met and the value-for-money achieved.
While government had the necessary legal framework in place to award contracts directly, it had to balance the need to procure large volumes of goods and services quickly, with the increased commercial and propriety risks associated with emergency procurement. We looked in detail at a sample of contracts selected on a risk basis. Although we found sufficient documentation for a number of procurements in our sample, we also found specific examples where there is insufficient documentation on key decisions, or how risks such as perceived or actual conflicts of interest have been identified or managed. In addition, a number of contracts were awarded retrospectively, or have not been published in a timely manner. This has diminished public transparency, and the lack of adequate documentation means we cannot give assurance that government has adequately mitigated the increased risks arising from emergency procurement or applied appropriate commercial practices in all cases. While we recognise that these were exceptional circumstances, there are standards that the public sector will always need to apply if it is to maintain public trust.