A British logistics company has received almost £800m of Covid-19-related contracts, making it the largest recipient of pandemic deals handed out by the Department of Health and Social Care without an open tender.
Uniserve, an Essex-based transport firm that last reported annual sales of £243m, says it will make tens of millions of pounds profit from £779m of contracts to supply the government with personal protective equipment (PPE) and logistics services during the coronavirus crisis.
The huge scale of the contracts awarded to Uniserve without a tender has raised questions over whether the DHSC achieved the best value for the taxpayer, even within the context of the country scrambling for PPE during the height of the pandemic.
The PPE contracts were awarded directly, without an open competitive tender between potential suppliers, under regulations that bypassed normal processes due to the Covid-19 emergency.
Liz David-Barrett, a professor of governance and integrity at the University of Sussex, said: “The purpose of a competitive process is to secure the best service at the best price and for the public, and other suppliers, to have confidence in it. Even in emergency conditions the government could run a streamlined competitive process, and an emergency should be for a short period. To let a really long contract under emergency provisions seems an abuse of the procedure, and puts public confidence at risk.”
A Guardian and ITV News analysis of notices published via Tenders Electronic Daily (TED) − the European public procurement journal – identified Uniserve as the company that has received the highest total value of Covid contracts from DHSC without a tender.
In March, Uniserve was awarded a 12-month contract to provide freight services for the supply of PPE and medical equipment worth £473m. Notification of the existence of the contract was published by the UK government at the end of November, although the government has a legal requirement to publish notices of contract awards within 30 days. The full contract is still to be published.
John Shingleton, director of the Handy Shipping Guide website, said: “After the initial panic to secure PPE, the government should have obtained a list of such companies, from the British International Freight Association for example, and run some sort of competitive process. That would have shown the public that an effort had been made to ensure the transport was being commissioned with the best price and service.”
A government spokesman said the use of a single provider to ship PPE to the UK “presented significant operational synergies in the management of the complex and evolving logistical arrangements”.
Iain Liddell, the managing director of Uniserve, said: “The DHSC came to the right people as there are very few if any other companies that could have reacted so quickly … with the only intention of getting urgently required PPE to the frontline.”
Aside from the £473m logistics deal, Uniserve also received contracts worth £304m to supply the government with PPE, again without a tender under Covid regulations, and despite the company possessing no obvious expertise in the area. However, Liddell said Uniserve procures products for customers, and had a global network of contacts that specialise in PPE. “We did not actively sell our procurement services to the DHSC, we were asked to help.”
Internal NHS price benchmarking data suggests some of the PPE sourced by Uniserve for the NHS was expensive. On 14 April DHSC ordered 80m “Type IIR” face masks for £69.6m from Uniserve – implying a price of 87p a mask. According to market research commissioned by the DHSC, on 14 April the rolling 14-day weighted average price for Type IIR masks was 51p.
Mark Roscrow, a former director of shared procurement services at NHS Wales, said: “This does look a little on the high side, even against the market price that we were paying at the time.”
When asked about the prices paid to Uniserve for PPE, a DHSC spokesman said: “Our priority has been to protect frontline health and care workers. These masks were delivered on time, in full and met the required standards.”
Liddell, who said margins on Uniserve’s government contracts ranged between 5% and 20%, added: “Uniserve was driven by the national interest in getting PPE to the UK as quickly as possible. The Chinese PPE market was brutal with Europe, USA and China buying most of the PPE and gazumping most other nations. We did well under these extreme circumstances to secure production and deliver urgent PPE … All costs went through the DHSC process for approval.”