Supplier sues NHS Supply Chain for abandoning procurement

The firm, Global Health and Safety, has claimed NHSSC broke procurement law in the way it had run a mini-competition to whittle down suppliers that had been pre-selected to be on a PPE framework.

It said this had attracted complaints from unsuccessful bidders, spurring NHSSC to abandon the procurement process “in order to avoid the risk of having to defend claims brought under procurement law by disappointed bidders challenging the lawfulness of the process used for awarding the facemasks contracts”.

Last October NHSSC selected four firms from its PPE framework to collectively supply up to 60 million face masks to acute and non-acute providers from April 2023 for a maximum of 33 months. Each of the suppliers would be responsible for a proportion of the total number of orders from providers.

Global Health and Safety said in its claim, lodged with the High Court earlier this year, that it had been told on 28 October it was one of four firms chosen from the framework to potentially supply the masks.

On 3 November it was told the standstill period between making this decision and formally awarding the contracts would be extended by three days “to consider and respond [to] queries received from bidders”. On 8 November it was told NHSSC was abandoning the mini-competition and would not be entering into a contract with the claimant.

The company has asked the judge to declare the abandonment decision unlawful, order NHSSC to enter into the facemask contract with the firm and award lost profits and damages for wasted bid costs, wasted management time, and legal expenses. It also believes the breach of procurement law is so serious it merits an award of damages.

NHSSC has denied it abandoned the mini-competition for fear of being sued by unsuccessful suppliers, saying there was “no factual basis” for the allegation, nor any factual basis for the abandonment decision being based on anything other than that set out in letters sent to the supplier.

It said the procurement process was started “against a very uncertain backdrop”. It was based on the best estimate for the likely future quantities of masks that acute and non-acute health providers would need and the rate at which that demand would deplete national stockpiles of face masks and other PPE built up when the government bought as much as possible at the height of the pandemic.

Most face masks are supplied from the existing government stockpiles. In early November it was clear NHSSC had dramatically overestimated the level of demand to buy PPE through the national supply route while free PPE from the stockpiles remained available.

This meant it had provided information to prospective bidders about potential demand was sufficiently wrong that it needed to abandon the decision to award contracts off the mini-competition because it would have been unfair on all suppliers, including those that had been unsuccessful.

“The dramatic change in demand that was forecast… would have made a difference to the preparation of [tenders],” it explained.

Global Health and Safety declined to comment on the case. An NHSSC spokesperson said: “We are confident that we have acted properly as our focus is to ensure that we provide best value for the NHS and the taxpayer.”