• NHS Supply Chain provider alleges Department of Health and Social Care breached procurement rules
  • DHSC planned to award contract worth nearly three quarters of a billion pounds to Unipart
  • Department faces allegations over Unipart’s “limited experience in healthcare”
  • Contract is key part of changes to NHS procurement model  

The Department of Health and Social Care is being taken to court over allegations of improper behaviour during the awarding of a £730m contract to deliver medical equipment to the NHS, HSJ can reveal.

DHL Supply Chain, which has run the NHS Supply Chain service since 2006, claims the DHSC has breached equal treatment and transparency rules under procurement law, and accuses the department of “misdirection and manifest errors”.

The challenge means the DHSC is unable to award a contract for the service, which is a critical part of the wide ranging changes to make the NHS a more efficient purchasing organisation.

Last summer the DHSC began the search for a new provider to deliver medical equipment to the NHS, as part of its shake-up of NHS procurement following the Carter Review.

The three year contract, with a possible two year extension, is the biggest element of the new procurement model, which aims to deliver savings worth hundreds of millions of pounds every year.

In April the procurement for the new logistics provider was delayed.

HSJ has learned the DHSC told bidders in June it intended to award the contract to multinational logistics firm Unipart, which in turn planned to sub-contract part of the service to Movianto, which is part of American healthcare logistics company Owens and Minor.

In a letter to DHSC, DHL Supply Chain said it was “surprised to learn” that Unipart was “able to demonstrate the required levels of capability sufficient to satisfy the requirements” of the service.

The company claimed Unipart has “limited experience” in the healthcare and life sciences sectors, and “appears not to operate at scale on projects of this complexity”.

In its reply DHSC said Unipart’s plans to sub-contract part of the service to Movianto meant they did meet the requirements, and officials said references about Movianto had verified this.

But DHL Supply Chain claim Movianto’s involvement accounts for only 10 per cent of the overall contract, and that the company would not be able to help Unipart in delivering the other “substantial parts of the contract”.

HSJ understands the DHSC later said its statement about verifying Movianto’s references was wrong, and that it had not checked this before the decision to award the contract was made.

In taking the case to the Technology and Construction Court, DHL Supply Chain claims it submitted the “most economically advantageous tender”, and accuses the DHSC of failing to provide any “clear and transparent” statement of reasons supporting the contract award to Unipart.

The company wants the court to revoke the decision by DHSC to award the contract to Unipart, and instead force DHSC to give DHL Supply Chain the contract.

DHL Supply Chain’s current contract for logistics will expire by April 2019 at the latest.

The company is one of four divisions Deutsche Post DHL Group, which is a German logistics company. 

The DHSC and DHL Supply Chain both said they could not comment due to legal reasons.

A spokesman for Unipart said: “We neither wish to comment or respond to this allegation.”

Movianto did not respond to HSJ’s request for a comment.

DHL won three other contracts to buy certain types of equipment and services for the NHS, and is involved in a fourth contract through a joint venture with US analytics firm Vizient.

A date for the court case has not been disclosed to HSJ.