MPs to grill health officials on PPE spending
MPs are to grill health officials on whether they overpaid for personal protective equipment to deal with coronavirus.
The MP leading the inquiry says the crisis should not be an excuse for failing to achieve value for money.
One focus of their interest could be a little-known pest control company which won a contract to supply PPE worth more than £100m.
The government says it wants firms that can quickly provide a lot of PPE.
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PestFix, part of a company called Crisp Websites, signed the £109m contract with the government on 13 April to supply what were specified as “urgently needed gloves, gowns and masks to the NHS supply chain.”
The business operates from a unit by Littlehampton Marina on the West Sussex coast. Its accounts show that last year it had net assets of just £18,000.
Yet officials sealed the deal with PestFix without putting the order out to other suppliers in a competitive tendering process, saying in the contract that because it was a matter of “extreme urgency” they were able to place the order “without competing or advertising the requirement”.
PestFix says it has delivered more than 67 million items of PPE into the NHS Supply Chain.
“Our small, dedicated global team, spanning three continents, has worked non-stop for the past 70 days to support efforts of getting PPE to the front line involving an ongoing and herculean logistics operation,” its director, Dan England, told BBC News.
But the contract has added to concerns that in the scramble to get hold of vital equipment as the coronavirus situation deteriorated, the government may have paid too much.
Meg Hillier MP, the chair of the Public Accounts Committee, would not comment on particular cases before taking evidence on Monday.
But she said: “Just getting numbers on its own isn’t enough. You need to get value for money for the taxpayer, even in difficult times.”
A hundred public sector contracts worth £342m had been signed for Covid-related PPE by the end of last month, according to the specialist data firm, Tussell.
So nearly a third by value was accounted for by the single order to PestFix.
One of the UK’s most senior civil servants, the permanent secretary of the Cabinet Office, Alex Chisholm, told the committee last week that is was difficult to make value for money assessments in the current situation.
“You’ll find for PPE, ventilators and lots of other things we’ve purchased, that the per unit cost of buying things at great speed from multiple sources in a sellers’ market has been higher than we would like to have paid,” Mr Chisholm said.
“So if you compared the average cost a year ago to what we’ve been paying now, it’s been expensive”.
But he said the spending was necessary and there was no alternative.
The procurement process has been fraught with problems.
A shipment in early May of more than 80 tonnes of protective gowns from Turkey was first delayed and then rejected by inspectors as faulty.
Meg Hillier is incensed by the Turkish episode, saying “We should not be paying money for old rope.”
But small businesses say they have been doing their best to help in the country’s hour of need.
The next biggest contract for PPE, after PestFix, was granted to a marine supplies company near Salisbury, Ocean Footprint, which had been buying protective masks from China to sell to boatyards.
Ocean Footprint agreed to supply the NHS with three million high grade masks for £5m. In the next few days it will have delivered more than a million of them.
“I’m open about what we’ve done,” says the managing director Peter Harrison, adding that it is easy to forget how anxious a time it was for health officials and suppliers as the deals were being struck.
“It was desperate. It was all hands on deck. We hadn’t even reached the peak.”
The company knew that getting hold of enough masks in rivalry with other countries would be impossible, so it invested £100,000 in its own mask-making machine in order to be able to complete the order.
The NHS could have bought similar masks much more cheaply before the crisis, Mr Harrison admits, but he says frantic worldwide demand, rising raw material costs and the need for air transport have sent prices spiralling upwards.
He says that at the price he is selling to the government he could offload his entire stock to other buyers in a day.
A not-for-profit campaign group, The Good Law Project, has announced that it will seek a judicial review of the decision to award PestFix with its PPE contract.
The review would be to find out why there was no competition for the order and how the company was chosen.
Dan England from PestFix says: “We continue to work in close partnership with the NHS, MOD Procurement and DHSC Covid-19 procurement teams, who have all demonstrated incredible dedication in supporting PestFix to deliver this highly complex transaction.”
A Department of Health and Social Care spokesperson said: “During this unprecedented global pandemic, we have been working around the clock to ensure PPE is delivered as quickly as possible to those on the frontline and we have delivered more than 1.7 billion items since the outbreak began.
“We are prioritising companies that can provide large volumes of PPE at a fast pace, while ensuring all new PPE undergoes vigorous checks to ensure they meet the safety and quality required. We are grateful for all offers – some will be rejected based on these standards.”