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Another Strange Contract: The Loophole Allowing the Government to Avoid PPE Procurement Rules

Stephen Komarnyckyj investigates the Brexit effect and how Britain bypassed normal calls for competition in its extraordinary purchasing binge

Another Strange ContractLoophole Allowing the Government to Avoid PPE Procurement Rules

Stephen Komarnyckyj investigates the Brexit effect and how Britain bypassed normal calls for competition in its extraordinary purchasing binge

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The Department of Health and Social Care has awarded an £825,000 contract for personal protective equipment (PPE) for healthcare workers to a company that apparently has no cash.

The firm, MGP Advisory Limited, has faced being struck off the Companies House register for failing to file its paperwork on three occasions since it was founded in 2017.

The firm’s last accounts, submitted in December 2019, describe it as a “dormant company” and state that its share capital is £10. The company had no funds in its bank accounts and was about to be struck off the register when it was awarded the Government contract on 1 May 2020. The contract end date is also 1 May 2020, presumably because it covered the purchase and delivery of a single batch of equipment. 

It seems as if MGP Advisory Limited is really a vehicle for its founder and director, Michael Garrick Pearce, who – according to his LinkedIn profile – is a fashion and luxury industry specialist who launched the UGG boots in the UK. He has extensive contacts in the Middle East and Far East.

When contacted by Byline Times, he responded by referring to a link to the award notice. 

The NHS Counter Fraud Authority stresses the need to undertake due diligence on companies before they are contracted. The Companies House page for MGP Advisory Limited informs the reader that its accounts are overdue.

MGP Advisory Limited is not the only firm with an interesting background to have recently won a PPE contract from the Government.

Jolyon Maugham QC, as reported by Yorkshire Bylines, has found evidence of two companies having received PPE contracts from the Government despite having no track record in this area.

The Brexit Effect

In the early stages of the Coronavirus pandemic, the Government was offered the opportunity to participate in an EU scheme to procure PPE. The EU has published four calls for PPE and its strength as a procurer means it can obtain supplies at a good price. The UK chose not to join the scheme although it had the right to do so until 31 December 2020. 

Even if it did not participate in the EU scheme, the UK would ordinarily have published an open call for bids to provide PPE in the Official Journal of the European Union. However, under EU directives, when there is an ‘extreme urgency’ to buy goods or services, the Government does not have to open up a contract to competition. It can instead approach companies directly. 

Dozens of Government agencies, including the Department of Health and Social Care and local NHS bodies, have therefore approached firms to provide services, bypassing the EU’s tendering process – in some cases without a ‘call for competition’, meaning that only one firm was approached. 

Many of the companies have a track record in providing PPE, but some do not. While we do not know why these companies were chosen, this approach to procuring large supplies of PPE is highly questionable. In giving vast amounts of cash to the purchasing of PPE without competition, firms have likely been handpicked by the Government.

The whole process suggests a cavalier attitude to procurement rules, which are ultimately in place to protect the public against fraud and ensure that their money is spent properly and effectively.

Byline Times contacted the Department of Health and Social Care for comment but did not receive a response.

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