Coronavirus Latest News

Concern over ‘opaque’ Covid-related contracts awarded around world

The UK has spent more than £2.5bn on services and equipment related to the Covid-19 pandemic, according to fresh analysis that raises concerns about “opaque” contracts around the world wasting money and putting lives at risk.

A report by the Open Contracting Partnership and Spend Network found governments had spent $130bn (£97bn) on pandemic-related contracts, including on PPE (personal protective equipment) and other medical supplies, out of an annual procurement spend of nearly $13tn.

But the two organisations, which have built a searchable database of international procurement contracts, warned that a lack of transparency and high-quality data about money spent with private firms meant huge sums could be wasted.

“Companies with no relevant experience were awarded huge contracts for medical equipment, without transparency or competition,” they said.

“Supplies failed to arrive or did not meet the required standards, leaving medical staff without critical resources and costing lives.”

They pointed to examples such as the UK hedge fund that supplied 50m masks deemed unsafe for NHS workers, a Bosnian raspberry farm that secured a contract for ventilators, and a vodka distributor facing a pending lawsuit for overstating projected sales that won a US federal contract for surgical masks.

Analysis carried out by the organisations for the Guardian showed the UK had spent £2.5bn on procurement contracts related to Covid-19. Some of these have proved controversial, with at least £1bn of Covid-19 contracts awarded without a competitive process.

They include an £840,000 contract to research public opinion about government policies to a company owned by two long-term associates of Michael Gove and Dominic Cummings.

The political communications company behind the Conservative party’s controversial 2019 digital campaign strategy also received a £3m government contract to work on Covid-19 messaging, without a competitive process.

Another company, Randox, which employs the prominent Conservative politician Owen Paterson as a paid consultant, was awarded a £133m contract in March to produce testing kits for England, Wales and Northern Ireland without any other firms being given the opportunity to bid for the work.

The UK government later instructed care homes and members of the public to immediately stop using the kits after safety problems were discovered.

The government has also paid Love Island stars and social media influencers to promote the government’s troubled test-and-trace system.

The OCP and Spend Network report found that while the standard of UK data was higher than in many other countries, many contracts were published with no value, or with end dates before the supposed start of the contract.

The OCP said nearly $13tn a year was being handed to private companies by governments around the world, often with little transparency or faulty data records documenting them.

More than $10tn of the total is spent by 16 countries, led by China on approximately $4.2tn, the US on $1.8tn and the UK just behind France on $359bn, or nearly 14% of gross domestic product.

Gavin Hayman, the executive director of OCP, said: “Covid-19 has put public procurement in the spotlight like never before.

“Governments spent eye-watering sums of money without proper checks and balances, leading to unnecessary waste and unforgivable loss of life.

“PPE and medical supplies are just the tip of the iceberg. With governments relying on public procurement systems to boost their economic recovery efforts, we need transparency to ensure public money is well spent, whether on school meals, medicine, or vital infrastructure.”

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Globally, fewer than 2% of procurement, or $244bn, is published using the open contracting data standard (OCDS), which allows businesses, journalists and civil society to analyse and question the data.

Ian Makgill, the founder of Spend Network, said: “Publishing full details of public contracts makes the enormous public procurement market more efficient and competitive.

“Governments can gain real benefits by opening up the whole procurement process, from the planning and bidding stage, through to the decision on preferred supplier, and the fulfilment of the contract.”

A government spokesperson said: “As part of an unprecedented response to this global pandemic we have drawn on the expertise of a number of private sector partners. This is completely in line with procurement regulations for exceptional circumstances, where being able to procure at speed has been critical in the national response to Covid-19.

“We have been clear from the outset that public authorities must achieve value for taxpayers’ money and use good commercial judgement when awarding contracts. The publication of contract information is being carried out as quickly as possible in line with transparency guidelines.”

Read the original article at The Guardian

Related Articles

Back to top button
Close