The worrying state of procurement practice in times of COVID-19

I have long argued that the procurement legal framework does not exist to enable great procurement, but to reduce the probability of really bad procurement being carried out. The cavalier approach taken by the UK Government in its COVID-19 related procurement shows the importance and value of the 'regular' procurement rules. According to the Guardian, over £1bn have been awarded directly without a competitive process.

The implications of going through a public process in a procurement procedure forces the contracting authority to make the key decisions about what it wants to buy in advance, before going public. Once the contract notice is out there, you're bound by the information contained in it and – shocker! - in general, that's a *good* thing.

What we are seeing in the UK is the transformation of what is supposed to be an exceptional way to do procurement into a regular approach to be used without much thought being given to the legal requirements in a 'I use it, therefore I needed to use it' self-fulfilling prophecy.

It is true I feared the COVID-19 crisis would be an opportunity to throw good procurement principles and the procurement rule book out of the window. That is why I came out so strongly against Portugal's emergency rules and #ventilatorgate here in the UK. The stakes were immediately visible to me.

In addition to the crisis leading to bad procurement being carried out I was (and am) worried that we would not be able to really see how bad it is because all those contracts would be flying under the radar. There would not be contract notice, contract award notice or actual contract to look up and check. In the middle of the real urgent situations (as configured on Regulation 32 of the Public Contracts Regulations 2015) there are a myriad of ventilator-type contracts hiding and it is likely we will never hear about them, let alone see the actual contracts.

Ex-post transparency (and accountability) has also been a particular bugbear of mine, usually argued for contracts subject to 'regular' procurement procedures but I'm willing to be even more strident when it comes down to contracts that were not subject to any sort of transparency before their award. In the transparency vs competition of publishing contract information (including the actual contract) I am firmly on the side of the former.

I cannot say that I am surprised by the lack of ex-post accountability (and transparency) for COVID-19 related contracts here in the UK. This is a country where contracting authorities refuse to publish contracts even for regular procurement because of, well, business secrecy and intellectual property. Bullshit. They're a convenient excuse to avoid accountability and in a sense, the procurement equivalent of the heavily redacted disclosure of the 2009 expenses scandal documents. The UK is not a pro-transparency country and it treats the disclosure of procurement related information accordingly.

To be fair, the lack of ex-post transparency is not an exclusive problem in the UK. The imbalance between contract notices and contract award notice numbers on the Tenders Electronic Daily can be seen in most EU countries and the reasons for that lie in the lack of incentives and consequences for publicising the award notices. If nothing happens if you do not publish that information, what is the likelihood you will comply with the obligation? Anyone who studied criminal law knows about the importance of the certainty of punishment as a driver for compliance behaviour...

Key worries

In his weekend post, Albert mentioned three key worries people seem to have regarding how procurement is being carried out in the UK:

  • Extremely urgent procurement being a precedent for a deregulated procurement future
  • Breach of transparency requirements on extremely urgent contracts
  • Excessive reliance on consultancy firms

He is mostly worried about the third, whereas I am more concerned about the first two. Regarding the first, it seems evident to me that if nothing negative (reputation damage, negative publicity, highly visible failures, etc) arises from this 'experiment' *before* the Government changes procurement rules, then the wheels currently in motion will take us to a deregulated procurement world. And even before then, the lack of negative consequences will show contracting authorities that they can avoid transparency without being caught. And, naturally, the companies benefiting from the lack of transparency will be the last with an incentive to blow the whistle...

As for the second, I doubt the existing mechanisms will be enough to overcome the failures in transparency we are currently seeing for the reasons mentioned earlier. Despite the rules mandating such transparency, there are neither incentives nor consequences for the contract information (and reasoning for choosing the negotiated procedure without publication) to be disclosed. So, they aren't. I would not be surprised this lackadaisical approach extends as well to the 'audit paper trail' all procurement procedures are supposed to generate.

I can totally see an inquiry in the somewhat distant future where puppy eyed individuals say before a stern looking committee that they do not recall how things were done and that the 'extreme urgency' meant they were, sadly, unable to keep a proper track record of decisions.

The bottom line for me is that there are a significant number of contracts which raise questions about their award under alleged 'extreme urgency' grounds. Here's my current list:

  • 'No cost contracts'
  • Ventilators
  • Contact tracing app
  • School meals vouchers
  • PPE distribution (Deloitte)

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