I've already GIVEN you what the state of the global market for procurement in March was!!!!
I'll post it out in full for you as you are obvious incapable of comprehending what I've already given in the link!!!
This is what the government's QC will be presenting in court - these are NOT my words just in case you are still not grasping what is going on ffs!
PPE procurement in March/April 2020: market conditions
11. Prior to the current crisis, demand for PPE by NHS Trusts was partly serviced by “NHS Supply Chain’” (SCCL Ltd, a company owned by the Department of Health & Social Care (“DHSC”)) and partly through direct buying by NHS Trusts themselves, usually through wholesalers. Other health and social care organisations were responsible for sourcing their own PPE, for example through wholesalers or directly from suppliers.
12. PPE has hitherto been in plentiful supply, with over 80% historically being manufactured in the People’s Republic of China. That situation started to change dramatically in-mid March 2020, as the Covid pandemic unfolded across the world, and developed very rapidly towards the end of March (paragraph 22 of your letter acknowledges that the UK only went into lockdown on 23 March). This led to a dramatic spike in demand for Covid-related PPE items, and rapidly altered market conditions accordingly. Existing supply chains were disrupted as prices rose, transportation links to the main manufacturing bases in the People’s Republic of China were disrupted, and the volumes of PPE required increased to unprecedented levels from across the globe.
13. The emerging problems in relation to the procuring of PPE in the UK were widely reported in the press around the middle of March and attracted considerable interest. In response to the emerging crisis, numerous approaches were made by entities offering to assist in sourcing and supplying PPE: to Members of Parliament; NHS Trusts and staff; and to Government departments and officials working within them.
14. By this stage it was already clear that established modes of procuring PPE and other critical supplies were no longer practical. Alternative strategies therefore had to be deployed instead and new sources of supply for PPE had to be identified and utilised. Accordingly, while existing suppliers continued to be handled by SCCL, potential new suppliers who had expressed interest were directed towards a central email address, subsequently replaced by a public portal, through which offers could be logged and evaluated (see further below).
15. As already noted above, the rapid rise in global infection rates during this period led to a huge surge in demand for PPE. In the NHS, for example, demand for some PPE items increased to several thousand times the normal volume; demand for gowns increased by a factor of thirteen (with a projected annualised consumption of 151 million). The scale of that demand was far in excess of anything that either had been or could have been predicted; the clinical need for PPE to address the specific challenge of coronavirus was both greater than and different from, for example, that required to deal with a flu pandemic.
16. The effect of such increased demand, which was being replicated on a global scale, led to a wholesale change in the relevant market dynamics. Market power shifted decisively in favour of the suppliers, such that the competition was no longer between suppliers to satisfy government/buyer demand, but between a range of different public and private purchasers from a large number of nations. Some countries also responded by banning PPE exports entirely, and some suppliers were induced by more attractive financial offers to renege on existing contractual commitments (this remains an additional risk). An already complex and fast-moving situation was further complicated by the actions of some unscrupulous actors seeking to take advantage of the situation. A worldwide shortage of some of the necessary raw materials and speculative buying by some commercial purchasers served only to exacerbate the situation.
17. Once the scale of the pandemic became clear, the market for acquisition of PPE was very much a suppliers’ market. Suppliers who found themselves inundated with highly attractive offers from across the world would simply have had no incentive to respond to a UK call for tenders, or to hold off from
committing their product on the favourable terms available elsewhere rather than await the outcome of a UK competition. Indeed, as paragraph 26.b of your own letter acknowledges, the EU’s first attempt at a joint procurement exercise for a very limited number of gloves, gowns and overalls failed precisely because of a lack of suitable suppliers coming forward.
18. In these circumstances, suppliers were able to demand significant advance payments, and DHSC understands that other countries were offering to pay substantial sums of cash upfront to overseas producers in order to secure immediate commitments. When new sources of supply did come on stream (for example, because existing facilities had been repurposed to manufacture PPE products), these offers would often only be open for a matter of hours. If negotiations were not concluded in this time, stocks would simply be lost to a purchaser from another country instead.
19. Against that background, it is wholly fanciful to suggest that DHSC could have run any kind of competitive tendering process or “market-testing exercise”. The rapidly shifting availability of supply on the ground required decisions to be taken in hours, rather than days or months. The most accelerated procurement timetable under the Public Contracts Regulations 2015 contemplates that 10 days should be allowed for interested bidders to express interest. There was no practical possibility of being able to respect that time period and to be able to participate actively in the market for PPE as it then was.
20. The importance of maintaining and building up adequate stocks of PPE should not be underestimated. PPE is essential to keep health and social services running and to protect front-line workers caring for both Covid patients and others more generally. Any delay to the ordering of PPE that led to the NHS missing out in favour of other countries ran the risk of causing stock outages, which would put the lives of both patients and NHS staff at risk. The critical nature of the items in question was (and had to be) at the forefront of DHSC’s procurement strategy during this period.
21. In short, in a matter of only a few days, the UK moved from a situation where it had to match predictable need with a steady and established supply of PPE to one in which demand had become unpredictable (because the scale and impact of the pandemic was still unknown), existing supply chains were incapable of meeting requirements, and new supplies had to be obtained in the face of surging and unprecedented global demand and in hostile but novel market conditions. That required an entirely new approach to procurement.
PPE procurement in March/April 2020: the Government’s response
22. In order to address the crisis in supply of PPE, the UK Government utilised three main buying routes. The first comprised existing suppliers, working through SCCL. The second involved using a strengthened team of staff in the UK Embassy in Beijing to identify potential sources of supply on the ground. The third, of which Clandeboye was part, comprised new suppliers who did not currently work through SCCL. It is also appropriate to record the substantial voluntary efforts that were made within local communities both in terms of passing over existing PPE (for example, from school science departments) and of manufacturing items.
23. Part of the difficulty faced by the UK Government was that there was no single list of existing known suppliers of PPE given that some NHS Trusts chose to source supplies themselves rather than work through SCCL, while other health and care organisations made their own arrangements in any event. In order to reach a broad range of possible opportunities, the UK Government also wished to identify not just existing suppliers of PPE (whether or not to the NHS), but also entities with a record of supply to the NHS and/or the public sector and/or who could re-purpose to supply PPE, particularly where they might have established links to manufacturers in the People’s Republic of China and elsewhere in the East Asia, where the main sources of supply are located, including those manufacturers who were themselves re-purposing to make PPE. It was understood that the ability of a supplier to secure a reliable source of supplies, and to make available existing supply chain relationships could be one of the keys to achieving successful supply.
24. Accordingly, in order to address the challenge of surging demand for PPE within the NHS, it was decided to set up a new organisation to focus solely on procuring PPE supplies for the public sector: this was known as the “PPE Cell”, and comprised a dedicated cross-governmental team of officials from DHSC, the MoD, Cabinet Office and NHS England. This prevented undue pressure on NHS Supply Chain’s existing administrative capability, allowing it to continue to meet the need for other consumables in the healthcare system more generally and deal with existing PPE suppliers. The new task force decided to adopt an innovative “open-source” approach to procurement, calling for help from across the UK business community to help ensure critical supplies were maintained, with a view to buying the items urgently needed whencesoever it was necessary and appropriate to do so.
25. Offers of support were collated from various sources across government including via a dedicated central email address, email@example.com which had been established on 14 March 2020. The request that any offers be directed to that email was widely publicised, including in an answer to a Parliamentary Question given on 24 March 2020. On 18 March 2020, Taiwo Owatemi MP tabled a question for written response in the following terms: “To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to encourage relevant manufacturing companies to switch production to the manufacture of (a) personal protective equipment and (b) hand sanitiser or its key ingredients.” In response, the Parliamentary Under-Secretary (Minister for Business and Industry), Nadhim Zahawi MP replied as follows:
“In response to the COVID-19 outbreak, the Chancellor is chairing a regular Economic and Business Response Committee with Ministers from across the Government. The Committee will respond to the impact on businesses, supply chains, and the wider economy caused by the pandemic, and will request advice and support from industry where necessary. Secretaries of State will also hold sector-specific roundtables, including with the aviation, retail, manufacturing, food, insurance, financial services, sport, entertainment and events, and
tourism and hospitality industries. Any business who is able to help should get in touch at: firstname.lastname@example.org.”
26. The response to the Parliamentary Question reflected the approach that had been taken, with details of the email address having been circulated by No 10 and Ministerial offices to key external business interests and a mechanism for capturing commercial offers put in place by the Government Commercial Function on 18 March 2020. A webform was subsequently made available for completion.
27. This Open Contracting approach was reinforced by the launch of the “Coronavirus Support from Business” Scheme on 27 March 2020.This initiative encouraged businesses supplying a range of products and services, including PPE, to register on a new online portal, to indicate how they might assist the government’s response to the pandemic, and the scheme was widely advertised at the time.
28. Suppliers who registered with offers of PPE were asked to complete a form indicating (inter alia) the products they were offering and details of price, quantity and technical certifications (including evidence thereof). They also had to give details of their business for the purposes of vetting. Many of the suppliers who registered were new to the PPE market but some did have previous valuable experience of international supply-chain management and importing goods. As already indicated, the UK Government was particularly interested in potential suppliers who had existing strong relationships on the ground in the East Asia with companies which either manufactured PPE or were re-purposing to do so, or had good local knowledge and contacts which might assist in identifying such manufacturers.
29. Given that the entire premise of the scheme was to identify new sources of supply (the established market being no longer able to fulfil demand), it would have been perverse to narrow down the field by imposing artificial pre-qualification requirements such as a minimum turnover requirement or unnecessary prior experience (indeed, approximately 75% of the offers that reached the closing teams came from companies who had not previous supplied medical PPE). The whole purpose of the Government’s “opensource” approach was to maximise the number of offers to prevent shortages of critical products (and to impose restrictions of the kind suggested would further have entailed substantial procurement law risks).
30. Rather than focusing on the identity of the potential supplier, the validity of the offer was the key focus, thereby allowing smaller suppliers with strong contacts in PPE supply to offer the support the Government urgently needed. Equally, past experience in PPE supply was not considered a prerequisite, as other businesses (of whatever size) might also be able to leverage their manufacturing contacts to engage with foreign enterprises converting existing facilities to PPE production. While it was of course possible for DHSC to continue liaising with existing large-scale suppliers during this period (and indeed it did so, through SCCL), the nature of the changed market conditions required the development of alternative sources of supply and it was appropriate not to impose unnecessary hurdles in the way of securing that objective.
31. In this way over 24,000 offers of support were received from some 16,000 potential suppliers. The information they provided was initially assessed and verified by a cross-governmental team. Once this initial approval had been granted, offers were then passed to buying teams (some 500 staff seconded from a range of departments), who prioritised these offers on the basis, among other matters, of how urgently the particular product was needed, the quantity on offer, value for money (using existing price benchmarks), certainty of supply and lead times. Where appropriate, further financial checks were conducted prior to contracts being concluded.
32. In so far as technical requirements were concerned, specifications were provided by SCCL. These existing specifications were appropriately modified so as to make them accessible (without, for the avoidance of doubt, reducing the key requirements to meet the necessary technical standards). The relevant specifications were published online on 30 March 2020: see https://www.gov.uk/government/publications/technical-specifications-for-personal-protectiveequipment-ppe).
33. When offers were being evaluated, the technical suitability of the products on offer was confirmed with separate teams at NHS Supply Chain. Once the closing team had finalised the commercial terms of the proposed contract, details would be sent to the senior officials at DHSC for a final decision by an appropriate Accounting Officer. For the purposes of Covid-related PPE procurement, contracts up to the value of £5m were approved by a Deputy Director; contracts between £5m and £100m by a Director in DHSC Finance; and contracts over £100m by the Second Permanent Secretary. It should be stressed that this final decision was not a mere formality and, based on HM Treasury criteria, careful assessment was given to whether the proposed purchase would represent value of money in the circumstances (prices recently paid for similar products being a key point of reference).
34. As a result of this enhanced engagement with the market, over 600 contracts for PPE have now been concluded with almost 200 different suppliers; these range in value from under £1 million to over £100 million, amounting to some £5.5 billion in total. Full details of all these awards will be published in due course.
35. However, for present purposes, we would simply note that the very strategy which your clients’ Claim seeks to impugn has in fact proved successful. Over 28 billion items of vital PPE have been secured for the NHS and critical shortages have thus far been avoided. Furthermore, on the basis of our client’s engagement with the market, it is clear that if such a proactive, open-market approach had not been followed the UK would have been left without PPE at a critical time, with consequent risks to public health and human life. We would also note that the whole process of increasing the supply of PPE has had to take place in wholly exceptional circumstances, not least in which unnecessary travel has been prohibited making it impossible to visit new facilities or suppliers, and which has required an extraordinary degree of commitment from staff deployed from other responsibilities at very short notice.
36. It should be noted that the pre-contractual quality assurance process did not represent the only safeguard to ensure that PPE supplied into the NHS was of appropriate technical standard. Where PPE was obtained using a new supplier, on arrival in the UK the supplies were immediately quarantined. Thereafter, they were checked and quality assured by the appropriate regulatory bodies to ensure necessary technical specifications and standards were met before being released for use. In the event that any product fails to meet the necessary specifications, the Department can seek a full refund of any sums already paid over.
Now can you understand a bit better how contracts are under normal circumstances put out to tender and ultimately awarded was simply impossible to do in the face of the pandemic and all country's seeking unlimited supplies from a market that could physically provided them - and if that wasn't bad enough 80% of the worlds supply came from China (and I'm led to believe centred on Wuhan incredibly enough - which was locked down - but I can't say I know the Wuhan bit as a fact although I do believe it to be true).
When I was awarding large contracts the process took months and everybody involved sourced their suppliers in this country and I wasn't in direct competition with anyone else for the contractors services, nor having deal deal with a thousand new contracts per month like they were.
Quite frankly you and Maugham simply have no idea of what needed to happen and that wasn't lining up the deckchairs in nice neat rows on the Titanic as it was sinking fast!