NHS Digital has awarded a £51m IT contract to global consultancy Deloitte without prior notice or competition – just as the UK government faces a legal challenge for doing the same thing with a hugely expensive “management” contract.
A contract award notice for the COVID-linked IT work – described as a “Digital Delivery Lead role” – was published yesterday. It said the deal was intended to provide “digital solution design, build and live service of a digital platform, ordering portals and mobile applications to support the COVID-19 National Test Service.”
In yesterday’s notice, NHS Digital, the body responsible for putting England’s health service IT strategy into practice, said the award was made without prior notice or competition because of the “highly bespoke nature of the testing services and the criticality of ensuring that the testing services continued uninterrupted, [and] at the stage of contract award, the supplier was the only economic operator capable of facilitating the continuation of the testing services.”
The notice – an extension of work done on a prior Deloitte contract – added that it would be “seriously counter-productive” to have carried out a procurement for a new deal because that “could have led to material avoidable delay or risk of disruption to the service and the ability to access data which could have had a fundamental impact on the provision of testing services to citizens in England.”
It also argued that the absence of competition was not the result of an artificial narrowing-down of the parameters of the procurement. All of these justifications fall within Regulation 32(2)(b(ii) of the Public Contracts Regulations 2015.
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NHS Digital also claimed in the document that a “transition of responsibility to another provider” could potentially have “a catastrophic impact on the success of the Test, Trace, Contain and Enable strategy and may have resulted in further spreading of the virus due to difficulties in testing and isolating those who have tested positive.”
Yesterday’s notice said the contract has an initial period expiring on 31 March 2021, and had been extended from “the original contract,” with the value increasing to £51m. No figure or date was given for the original contract award, and it is not available in the public procurement system.
NHS Digital told The Reg: “At the start of the COVID-19 pandemic, the Department for Health and Social Care asked Deloitte to set up a digital platform for COVID-19 testing.
“Effective from 20 June 2020, responsibility for the digital delivery elements of the Test Services were transferred to NHS Digital. At that stage Deloitte provided test services were already live and operational and critical to the response to the pandemic.
“Therefore, the decision to award this contract to Deloitte was to ensure continuity of service and consistency in our approach to ongoing changes during the pandemic, and to minimise risk to citizens through changing supplier and platform design midway through the pandemic.”
Meanwhile, an even larger Deloitte contract from January comes under fire
This week there were signs that the award of consultancy contracts in the government’s pandemic response – which provoked a stiff grilling from MPs earlier this month – might not go unchallenged.
The government is also facing a legal challenge over another contract worth up to £145m for the “Provision of Management Consultancy Services” that the DHSC awarded to Deloitte and published on 28 January.
The exceedingly expensive management contract is now the subject of a legal action by campaign group The Good Law Project.
The group said in a statement: “The deal, worth up to £145m, was handed to Deloitte to ‘support testing for COVID-19’ for just five months. Deloitte has been given at least 25 public sector COVID contracts since the outbreak of the pandemic, of which contracts totalling £170m were awarded without any competition.
“Not only did government fail to advertise or put this huge contract out to tender, they didn’t come clean about the enormous sum of public money handed to Deloitte until around the time the contract had ended. We believe this particular contract in question is unlawful and have initiated legal proceedings.”
In a pre-action protocol letter, the campaign group argued that Deloitte’s 28 January contract award, which describes work between 1 September 2020 and 31 January 2021, did not comply with the regulations because it was made “without any lawful process of advertisement or transparent competition whatsoever, contrary to the requirements of the Public Contracts Regulations 2015.”
Despite getting more information on the subject from the Department of Health and Social Care (DHSC), the group said Regulation 32(2)(b(ii) did not apply because the idea that only one provider can supply the services due to technical reasons was only supported by “a broad transition risk to a new provider” with the department offering “no detailed or specific justification.”
This left the campaign group “seriously and legitimately concerned that the [contract award notice] indicated that the Defendant had affected an unlawful direct award to Deloitte.”
It added in the legal letter: “The suggestion that no other economic operator could provide services for technical reasons is unsupported by any detailed explanation or evidence whatsoever and is inherently implausible in the context of management consultancy services.”
In response to the legal challenge, the DHSC said it would not comment on legal proceedings or specific contractual arrangements.
“As part of our response to this global pandemic, we have drawn on the enormous expertise and resources of a number of public and private sector partners.
“The government has been clear from the outset that public authorities must achieve value for taxpayers and use good commercial judgement. Due diligence is carried out on all government contracts and we take these checks extremely seriously.”
The Good Law Project has been contacted for further comment on the most recent Deloitte contract. ®