My Lords, I have a few amendments in this group. The first is Amendment 235A, which was brought forward as a probing amendment so that we could consider the direct award of contracts in special circumstances. It is important that the Government both put on the record why there is a need for direct awards and explain properly the limited circumstances in which they can be used, so that things are completely clear. I also point out that, in certain scenarios, a contracting authority might be able to make a modification to an existing contract without following a competitive tendering procedure; in reality, that would have the effect of making a direct award. We need a bit of clarification around some of these issues.
The Bill introduces some changes that we would support in this area, including, for example, that the contracting authority would be obliged to publish a transparency notice in advance of making a direct award. We would very much support that. It is also interesting that Ministers will be empowered to designate specific contracts or categories of contracts that can
be awarded directly in certain identified areas, such as in protecting life and for public security. It is good that we have a bit more meat on the bone in this area and on the issue around transparency.
6.45 pm
I also point out that the 10-day standstill period for a voluntary transparency notice that currently exists is not replicated in the Bill. Instead, it simply requires the transparency notice to be published before the contract is awarded. I assume that, for recipients of direct awards, this may give some certainty as to when a contract is safe from challenge. Again, that would be important for people in receipt of these awards. Conversely, the lack of a standstill period may make it more difficult, or even impossible, for a party to challenge the direct award before it is entered into. It would be helpful to get some clarification on some of these different areas.
My Amendment 242 to Clause 41 would add a sunset clause to provide that regulations automatically expire 60 days after being made. The effect of this is so that Ministers would be required to seek explicit approval from Parliament under the “made affirmative” procedure to continue uncompetitive tendering during a crisis period. Can the Minister have a look at this and say whether she sees that there might be some advantages to it? My other amendment would introduce various other aspects on this issue.
If people will indulge me, I would just like to give an example as to why we think this sunset clause is important. I refer to the Public Accounts Committee report on the Randox contracts as an example of why this would make a difference. During the Covid-19 pandemic, the Department of Health and Social Care awarded contracts worth almost £777 million to Randox Laboratories for Covid-19 testing services and goods. However, because the department has such poor record-keeping,
“we cannot be sure that all these contracts were awarded properly.”
Even if you allow for the exceptional circumstances that we had at the beginning of the pandemic,
“basic civil service practices to document contract decision making were not followed.”
The report further says that
“The Department … failed in its duties to be transparent about meetings that its ministers had with Randox.”
We therefore have an issue around potential conflict of interest, which was not explicitly considered in the awarding of contracts to Randox. The first contract was awarded in March 2020 without competition and the Public Accounts Committee said that it
“did not receive the scrutiny”
that normally would have been expected. It also said that
“The role of the Department’s ministers in approving the contract was also confused and unclear”,
and that there were
“Gaps in the audit trail”
significant enough that the NAO was not able to provide positive assurances, although the NAO report also stated that there had not been
“any evidence that the … contracts … were awarded improperly.”
So this is the problem and this is why I am glad to see that we have transparency in this Bill. The lack of transparency in previously awarded contracts is a real problem. We have heard in numerous debates that the expected level of testing capacity was not delivered,
“Yet the Department still awarded Randox a contract extension … seven months later, again without competition”.
We know that Randox benefited significantly from this. For example, the company saw a hundredfold increase in its profits in the year to June 2021. It is really important that this issue is tackled in this Bill, so that this kind of contract awarding cannot happen in the future.
Transparency International UK also made a number of recommendations: to implement the transparency recommendations from the Committee on Standards in Public Life; to bring forward legislation to introduce a new comprehensive statutory lobbying register in the next Parliament; and, importantly, to amend the Procurement Bill to set a time limit on emergency procurement during a pandemic without further parliamentary approval and to provide a full and candid disclosure over the operation of the Covid-19 procurement VIP lanes. This would include the names of the companies that were referred to, the source of the referral, the decision for the referral, the status of the referral, and any conflicts of interest.
I will not go into any more detail, as I have probably said enough for the Minister to understand our concerns. We cannot go back to what has already happened, but we have an opportunity with this Bill to ensure that this cannot happen again and that the Bill’s desire for transparency and better practice going forward is properly met, so that we do not have these issues in the future.
The noble Lord, Lord Clement-Jones, talked about the issues around cloud hosting and the danger of uncontested contracts that do not seem to have thresholds, which are having a real impact on UK businesses. The Minister has talked very supportively of small and medium-sized enterprises; I know that she is a champion in this area. But UK businesses are being locked out of tendering for these contracts because of how the frameworks seem to be set up. I completely agree with and support the words of the noble Lord, Lord Clement-Jones, and, because of the Minister’s support for small businesses, I know that she will have listened very carefully. I hope that she can take a proper look at this before Report.