Some thoughts on the UK's COVID-19 procurement of ventilators from Dyson
The BBC published a newspiece yesterday stating that Dyson had been commissioned by the Government to produce 10,000 ventilators based on a new design that is yet to pass any medical tests. This comes a mere 10 days after the Government called for help from the private sector in ramping up the production of ventilators for the NHS. In the lack of any formal documents we have conclude that the contract was awarded directly without a notice as per Reg 32(2)c of the Public Contracts Regulations. For now, this whole situation is looking like a repetition of the Garden Bridge saga.
It is fair to say these are not normal times and exceptional times demand exceptional measures. Having said this, it is important to look at the circumstances under which exceptional measures can be used. Thankfully the Cabinet Office itself has produced the excellent Procurement Policy Note 01/20 explaining how said exceptional measures are to be used. Here's what it says (correctly) about direct awards based on extreme urgency:
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I could not have said it any better and in fact praised the Cabinet Office by the clarity of the note when it was published on March 18th. What does this mean for the procurement of ventilators then?
The underlying issue here is that as far as I can tell based on the information currently available, the grounds for extreme urgency are not met on two counts. First, that the events were not unforeseeable. Second, that the contracting authority has not contributed to the need for extreme urgency.
The foreseeability of the need for ventilators
On January 30th, the WHO declared a Public Health Emergency of International Concern (PHEIC).
In early February (around 50 days before contract award to Dyson), the world watched as China built a new hospital in Wuhan in only 10 days to assist COVID-19 patients.
As one of the emergency hospitals in Wuhan built in response to the novel #coronavirus, the now completed Huoshenshan Hospital has been put into use Monday.
CGTN went to the construction site and talked with workers who have witnessed the shockingly rapid progress. pic.twitter.com/qwmVdcoPedFebruary 3, 2020
In the medical field, papers were being published in February (here, here, here and here) highlighting the need for ventilators to assist COVID-19 victims. On March 7th, the CDC in the USA recognised that 47-71% of admitted patients needed assisted ventilation.
Therefore, it is reasonable to assume that the information about the need for ventilators existed and was widely circulated in medical and policy-making circles. To assume that neither the Government, nor its advisers knew about it nor had the obligation to know is simply dereliction of duty.
The contributing factor by the contracting authority
Up until a certain point in time, the UK was pursuing a herd immunity approach to tackle the virus, even though ex post facto the Government has declared it was never the objective. However, the strategy followed originally was consistent with the herd immunity approach and it lasted all the way up to Monday March 16th when the Imperial College Report 9 on the impact of non-pharmaceutical interventions (NPIs) to reduce COVID-19 mortality and healthcare demand was published.
Therefore it was not that the need for ventilators was not foreseeable before March 16th, when the Government issued the call for help, but only that it changed its tactics in that same day. That is the date when the call for help was issued from manufacturers and the infamous meeting where the Operation Last Gasp pun was allegedly muttered by the Prime Minister. The fact a conference call was arranged for that day to get help with ventilators is another indication that the Government knew already that they were needed.
As such, it is obvious to me that the Government (as contracting authority) brought upon itself the extreme urgency by adopting the wrong strategy to tackle the virus and only accepting (and acting on) the need for ventilators in mid-March. According to the Financial Times, the lack of ventilators is already affecting the operation of hospitals in London.
The EU JPA snaffu
If the above was not bad enough, some Member States asked the Commission in mid-February to launch an emergency procurement of medical supplies, using the Joint Procurement of medical countermeasures agreement set up in 2009 to deal with the H1N1 outbreak. The UK is a member to this agreement and did not take part in the procurement process initiated by the Commission in early March and launched on March 17th, with offers expected by the end of the month.
The reasons for this lack of participation are unclear at the moment. It was claimed originally the UK decided not to take part and yesterday that there was a 'miscommunication' leading to the UK not being aware on time of this procedure. However, the Commission has now countermanded and stated on the record that the UK Government was duly informed and party to the discussions.
In addition to the JPA, the Commission is now creating a €50M strategic rescEU stockpile of medical equipment such as ventilators.
On the illegal nature of the contract
All in all, based on the information I was able to collect my take is that the grounds for the use of Reg. 32(2)c are not met. In consequence, the Dyson contract is illegal and the right consequences should be extracted from it. I do not believe that will happen in the meanwhile though as the optics will look terrible ("you're making people die!") but that does not mean they should not be duly investigated when this whole thing is behind us.
For me, this looks like the Garden Bridge all over again but on a much larger scale.
PS: As for the opportunity of awarding a contract in the middle of a crisis to a company without expertise in the production of medical devices such as ventilators, that’s a different story…