The authorities has been accused of losing taxpayers’ cash after a multinational firm headquartered in Dubai was paid £38.4m for a test and trace contract that was dropped quickly after it had been awarded.
Ecolog International, which presents provide chain companies in various industries, was initially approached final summer time to assist the UK meet its testing targets.
The authorities issued a letter of intent (LOI) with Ecolog in September 2020, with the corporate due to offer “laboratory models to offer diagnostic testing for Covid-19 to fulfill targets for numbers of exams carried out”.
An LOI is a written settlement underneath the phrases of which a provider will begin to conduct sure work for a purchaser – reminiscent of a personal enterprise or authorities – earlier than a ultimate contract is signed.
However, in accordance with an award discover printed on 23 April on the federal government’s contracts finder web site, the choice was later made to cancel the association – which was formally ended on 24 March – and “reimburse Ecolog for prices incurred”.
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The firm, which offers companies in nearly 20 nations, was handed £38.4m for tools that it had already delivered to the UK, laboratory exams that had been “undertaken pending the execution of the contract” and “mobilisation prices”.
It will not be identified whether or not the £38.4m determine coated the unique prices agreed between the 2 events on high of the reimbursement charges that had been paid out by the federal government.
An NHS head of procurement, talking on the situation of anonymity, stated he suspected the federal government made upfront purchases for tools and companies that it didn’t later require, a few of which had been by no means delivered by Ecolog.
“£38m of taxpayers cash was simply wasted,” he instructed The Independent. “Sloshed up the wall by very poor programme administration and contracting.
“Looks like they gave a letter of intent to Ecolog, to cowl upfront purchases which had been then not wanted. They gave £38m to an organization which they then didn’t hassle utilizing, and at taxpayers’ expense.”
It will not be identified which of the companies offered by Ecolog had been built-in absolutely into the UK’s test and trace system, whereas the Department of Health and Social Care has refused to clarify why it selected to not proceed in negotiating a finalised contract with the corporate.
It stated it can not present particular breakdowns of presidency contracts and prices, for causes of business sensitivity.
Ecolog was awarded the preliminary contract with out prior publication of a name for competitors, the DHSC stated.
£38m of taxpayers cash was simply wasted. Sloshed up the wall by very poor programme administration and contracting
NHS procurement head
It stated: “There was undoubtedly a danger to public well being and DHSC was reacting to a world emergency that was altering on a each day foundation.
“The want for the exams was rapid, with scientific forecasts on the time warning of each day instances of Covid-19 rising to as many as 50,000 per day within the coming weeks.”
Throughout the pandemic, many contracts have been awarded with out competitors, a few of which have been handed to firms with hyperlinks to authorities ministers, resulting in allegations of cronyism.
Critics have requested why such an method was nonetheless being taken, six months into the pandemic, with regard to the procurement of test and trace companies.
Labour stated it was “one other instance of outrageous waste from a authorities that has fully misplaced a grip of the general public funds”.
Shadow well being minister Justin Madders instructed The Independent: “This contract was signed greater than six months into the pandemic, so the federal government has no excuse that they didn’t know what they had been stepping into.
This contract was signed greater than six months into the pandemic so the federal government has no excuse that they didn’t know what they had been stepping into
Justin Madders, shadow well being minister
“Ministers have to urgently clarify what this contract was for, who authorised it and and why it was cancelled nearly right away.”
The NHS procurement supply additionally questioned the federal government’s resolution to have interaction with Ecolog by way of a letter of intent, which is usually seen as a high-risk mechanism inside the procurement trade.
If used correctly, an LOI is usually a helpful resolution the place two events are nonetheless concluding contract negotiations however sure work or companies are required instantly. However, failure to make the phrases clear can result in uncertainty and expose these concerned to danger.
“In the very uncommon circumstance we have to problem a letter of intent, we at all times minimise our business and supply danger previous to signing the ultimate agreed contract,” the supply stated.
“I discover it extraordinary that the consumers – the federal government – allowed themselves to be uncovered to many hundreds of thousands in prices if the provider efficiently claimed the letter was a binding, contractual dedication.”
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The DHSC stated it’s at all times methods to mitigate monetary implications and recuperate any prices for cutting down or not continuing with contracts.
A spokesperson stated: “To combat this world pandemic and save lives we constructed from scratch the biggest community of diagnostic testing amenities in British historical past. The UK is now established as a testing juggernaut, with over 148 million Covid exams accomplished up to now – greater than another nation in Europe.
“In order to deal with the myriad challenges created by this disaster – together with ramping up our testing capability – we drew upon the various abilities and expertise of the general public and personal sectors. Our focus final 12 months was to construct a community of diagnostic testing amenities to help rapid demand.
“It is simply wise that we preserve all of our contractual preparations underneath steady overview to make sure we’ve the suitable system for the long run and proceed with contracts which match the wants of service. We thank all of those that have made a priceless contribution to the programme up to now.”
The Independent has approached Ecolog International for remark.
