More on the UK COVID-19 ventilator procurement saga

I have been waiting to reply to Albert's volley on our ongoing discussion to give time for the dust to settle around the ventilator saga. I think it is fair to say we agree on the fact that the Dyson contract (as well as those for BlueSkies et al) are illegal since they were awarded directly but not to serve an immediate need. Therefore, the bulk of our disagreement is centered around the requirements of Regulation 32(2)c and the imputability of decisions leading to the current lack of ventilators in the UK.

Albert contends that the objective of Regulation 32(2)c is to be an anti-circumvention tool to avoid contracting authorities complying with standard procurement rules and obligations. In this context, Albert separates the acts of the contracting authority acting as such and any eventual political decisions the same body may have taken. In addition, the assessment of the action/omission needs to be objective and compared with how a reasonably informed and diligent contracting authority would have acted.

Finally, Albert considers that the need and timing were (and still are) unpredictable, thus validating the choice of direct awards made. As such, he thinks a more stringent approach to the evidence of the contributing factor by the contracting authority is required before a reassessment of the circumstances under which the decisions were taken can be carried out.

I will address each of this points in turn, and provide extra evidence where it has surfaced in the meanwhile.

1. Decision nature and imputability

The Financial Times published a piece today about the ventilators that were to be developed are simply not good enough to be used for the treatment of COVID-19 critically ill patients. In the piece, the FT attributes to the Cabinet Office the role of 'coordinating' the procurement of all new ventilators, thus including both the new models and the improved ones. Last week, I posited that the contracting authority was either the Cabinet Office or the Department of Health and today's piece confirms that view, although without seeing the contracts it is impossible to be 100% sure.

On that proviso, we can (for now) conclude that the decisions related the procurement of ventilators have been handled by the Cabinet Office and that this is also the contracting authority. As such, the lack of action pre-March 16th and actions taken afterwards have been taken by the same body, ie the same contracting authority. Therefore, it does not seem we're before an issue of left and right hands not knowing what the other was doing and all decisions/omissions pertain to the same body/contracting authority.

Once we reach that conclusion, trying to classify the omissions pre-March 16th as political decisions and as such exclude them from being reviewed within the context of procurement seem sketchy and artificial. The omission(s) were not political at all, but are in essence administrative irrespective of any wider political decisions and I'm still not convinced that the 'herd immunity' strategy is simply political in in nature. It is more than simply political since the inaction it sponsored led to the extreme urgency by March 16th.

The fact is the Cabinet Office did not take the necessary steps to procure ventilators before March 16th and that has been well established in my previous posts. That omission in itself is not political, but administrative and as such reviewable under procurement rules. A logical conclusion is that we would not be arguing about its reviewability had the Cabinet Office not awarded contracts directly, it is only because it has done so that we are looking into the process leading to such decision. And for me that is the key point here.

I'm troubled by the potential impact of granting administrative decisions a 'free pass' just because they are supported by political decisions. Would we be having this argument if the Government had made a 'political decision' of mandating the purchase of goods X from national manufacturers? Or by changing the law (the ultimate political decision!) to make it mandatory for public bodies to do so? All procurement decisions taken under those political decisions would be revieweable, of course.

The Government (and the Cabinet Office) is subject to the law as any other body of the land.

For me the decision to award the contracts directly is revieweable and as such we need to look at the path that led to those awards, including any omission between end of January and mid-March. My previous posts provide a decent overview of what information was publicly available so that a reasonably informed contracting authority could have acted upon.

2. Regulation 32(2)c objectives

I agree with Albert with the overall view that purpose of Regulation 32(2)c is to avoid running around the general procurement rules, particularly those concerned with procedures, transparency and accountability. I think that is not in dispute there. What is, however, is the consequence of doing so and how do we go about assessing the compliance of a contracting authority with that specific Regulation.

My take is that Regulation 32(2)c is exceptional in nature (here and here) and as such the grounds for use need to be interpreted narrowly. This means that in case of uncertainty/unpredictability as seen in this particular situation, the benefit of the doubt does not support the use of this provision but actually forbids it. In my view, Regulation 32(2)c creates a positive obligation for the contracting authority to prove that the grounds for extreme urgency are met. I think this is crux of the difference between mine and Albert's view. When Albert states we do not know if the counterfactual of a hypothetical procedure launched in February would have been successful that is *precisely* my point. Had it been done and failed, then the Government would be more than entitled to use a negotiated procedure without prior notice. But crucial element here is that it didn’t.

Even using an objective assessment of what a reasonable contracting authority should/could have done between end of January and mid-March, in my view, would lead to the conclusion that the extreme urgency faced in mid-March was contributed to by the omissions in the previous months.

So the utmost question seems to be: Was the Government (sorry, Cabinet Office) a reasonably diligent contracting authority in the run up to mid-March when it comes down to availability of ventilators?

Here's a report from Reuters about those critical weeks:


Thus, the Department of Health did know in February that more ventilators were needed and this was widely known. On March 17th Sir Simon Stevens, Chief Executive NHS England told Parliament this:

“”  — Q124

So, it is clear that at least NHS England new in the weeks before March 16th that there was a need for ventilators above what the country possessed at the time. We do not know how this was done by NHS England or if it failed, but if it did then surely the Chief Executive would have stated so.

For me, this is sufficient evidence that the Government knew of the need to secure further ventilators on the run up to March 16th and did not act upon it, effectively losing any semblance of protection that could be afforded as 'a diligent contracting authority'.

3. Ongoing unpredictability

I also agree with Albert that the unpredictability of demand for ventilators is ongoing and the exact level of demand cannot be forecast. However, I digress when it comes down to the consequences of said unpredictability for the purposes of determining which procurement procedures are available to contracting authorities.

In fact, unpredictability, complexity and interlocking values/interests are incredibly common in public procurement. Anyone working in large works will have plenty of stories about weather or soil or a myriad of other issues which cannot be forecast with precision when the procedure is being deployed. Crucially, though, dealing with unpredictability/complexity/wider implications has been successfully incorporated in public procurement over the years.

For example, in a situation of unpredictable demand a contracting authority will set up a framework agreement or dynamic purchasing system or use a variable demand contract which is exactly what it seems it did this time around albeit directly and without a proper procedure.

Where I disagree with Albert is that *a* demand for extra ventilators was not unpredictable in late January/early February, even for a reasonably diligent contracting authority for the reasons argued in my previous posts and in the previous section.

4. Ex post facto assessment

Albert also makes a good point that we are doing an ex post facto assessment of the decisions (and omissions) taken a couple of months ago. That is indeed intrinsic to the negotiated procedure without prior notice, since the lack of a transparent/visible procedure makes it impossible to syndicate it while it is live. The lack of a standstill means as well It can only be done afterwards and, again, proves my point of its exceptional nature and how much care is needed for a contracting authority to prove it can use this 'procedure'. It is virtually impossible to stop a contract awarded directly before it is performed, thus limiting the scope of damages.

What is important – and again a point of agreement between us – is to ensure we are basing the assessment based on the facts and data pertaining to the moment the decisions (or omissions) were taken and not new data or old data that was not available to the decision makers at that time. To that end I have been incredibly careful in mapping out data that was freely available on the run up to March 16th and that the Cabinet Office did not act upon. Barring a public inquest I am well aware of the difficulties of proving what the Government knew or didn't and when it did. However, if we apply the reasonable diligent test, all those data points I have cited previously were freely available and could have been used by any reasonably diligent contracting authority...

The fact is that the lack of timely remedies like annulment that could be used does not affect the possibility of damages being sought or the decision makers actions/omissions being syndicated. As for the public law implications I will leave that to the experts.

5.  Bottom line:

Today, in mid-April – a full month after the lauded Prime Minister call with the industry the overall situation is as follows:

1. Not a single new design ventilator has been approved or is in production.

2. The standards set out for UK makers for new ventilators are useless for COVID-19 patients

3. On Sunday, April 5th the Health Secretary said there were 9-10,000 ventilators deployed with another 2,000 in reserve.

4. On the same press conference, he reviewed the number down from 30,000 to 18,000 "in the next couple of weeks" ie, until April 20th or so.

5. On March 31st, the Chancellor of the Duchy of Lancaster announced Ventilator Challenge UK (one of the consortia actually building ventilators)would be delivering the first batch of machines by April 5th. This is a 30 machine batch.:

40 new hospitals are actually 6 hospitals.

50,000 new nurses is actually 31,000 nurses.

30,000 new ventilators is actually... 30.

Can this be true?! It’s just 1, 2020

6. Hundreds of Chinese-made ventilators of a 8,000 order starte4d arriving in the first week of April.

We do not know yet about the outcome of the EU procurement of ventilators or any sort of up to date data on the UK numbers. What we now know is that the Government was aware of the need prior to March 16th and did not act upon it. In my opinion this leads to the consequence of contributing towards the extreme urgency.