On the illegality of VIP lane COVID contracts
The last couple of weeks have been consumed with news about Baroness Mone and her role in securing PPE contracts for MedPro (here, here, here, here, here). Most of the discussion has (rightly) been about the ultimate beneficiary of MedPro and associated tax implications.
For me the interest on MedPro's contracts is slightly different and focused on the public procurement law angle. It is no surprise for regular readers that I view the UK early COVID-related contracts as a procurement (legal) disaster and my general assessment is that they are more likely to have been awarded illegally than legally. But that is beyond the point of this blogpost as I want to cover only the VIP lane COVID contracts. These are all illegal in my view, for the legal reasons broadly explained in this paper (open access), since the ability to use the negotiated procedure without prior publication for extremely urgency reasons is quite limited and still subject to treaty principles.
The UK government used the VIP lane for PPE COVID contracts in operation in 2020 separated suppliers with warm contacts in Government from those who did not benefit from such introductions. Even though the repeated claims that all leads were treated the same once submissions were in, the NAO found that while 1 in 10 firms admitted via the VIP lane were successful, for all other potential suppliers only 1 in 100 secured a contract.
If said claims of identical process are indeed true, then the only difference between these success rates is how they were introduced to the decision makers. This is due to the fact that it seems VIP lane leads were pursued as a priority, thus reducing the probability of the non-VIP submissions being assessed in good time. Were the 493 VIP lane firms really 10x better than the 14,892 others? By looking at MedPro who allegedly did not even exist when it was awarded significant contracts, it is fair to say that not.
Moreso, the rules of Reg. 32(2)(c) of the Public Contracts Regulations 2015 (those of the extremely urgent reasons) constitute an exception to the general rules of public procurement, that is that procurement processes should be transparent, suppliers treated equality and respecting the principle of competition, but only to the extent strictly necessary.
It can be said most PPE contracts fail the test but that is subject to a case by case analysis. As for the two lanes to award PPE contracts, there is an obvious fault: suppliers were treated more unequally than strictly necessary. After all, those 493 firms represented only 0,3% of all firms offering their services, a simple drop in the bucket. Why were they treated differently then?
This extra layer of discrimination between have (connections) and have not (connections) is the smoking gun of illegality. It was not necessary, let alone strictly necessary to treat 0,3% of potential suppliers differently from everyone else. Therefore all VIP lane contracts were awarded illegally. As for real life consequences, that is a different matter.
As for the wider UK PPE contracts awarded in the first half of 2020, there is more to be said but that is for another day.