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Investigation into the government’s contracts with Randox Laboratories Ltd

Government had to move very fast at the start of the pandemic to increase testing capacity, but did not document key decisions adequately when awarding a contract to Randox Laboratories Ltd (Randox) for COVID-19 testing services, according to the National Audit Office (NAO).

At the start of the pandemic, the government had to act quickly and in exceptional circumstances to scale up COVID-19 testing activity, given the lack of mass testing capacity in the UK at that time. As part of these efforts, the government contracted with private sector suppliers to provide the testing services and goods needed as part of the pandemic response. Ministers were involved in discussions with testing suppliers, including Randox, as part of their role to drive progress on building the unprecedented testing capacity required in the UK.

Between January 2020 and December 2021, the Department of Health & Social Care (the Department) and Public Health England awarded 22 contracts to Randox, or its strategic partner Qnostics Ltd, with a maximum value of £776.9 million. By value, almost all the contracts were for the provision of testing services.1 Sixty per cent (£463.5 million) of the total value of the contracts were awarded directly without any competition under emergency procurement rules. By 18 October 2021, the Department had paid Randox £407.4 million on its testing contracts.

The Department first awarded a £132.4 million contract to Randox for testing services on 30 March 2020.2 The Department told the NAO that a competitive tender was ruled out due to the need to move quickly, and that it could not award the contract from an existing framework as the value of the contract exceeded the framework limit.

The Department provided the NAO with no documentation on detailed contractual negotiations and consideration of potential conflicts of interest for its first testing contract with Randox. The Department also did not disclose Randox’s attendance at four ministerial meetings as it should have done in line with transparency requirements. Meeting minutes were kept for two of eight meetings on testing involving ministers and Randox that took place in 2020 and 2021. The gaps in the audit trail mean that the NAO is not able to provide positive assurance in the normal way, but it has not seen any evidence that the government’s contracts with Randox were awarded improperly.

In October 2020, the Department chose to award a variation of its original contract to Randox worth £328.3 million, rather than undertake a competitive procurement. Further contracts were awarded to Randox between April 2021 and March 2022. These were a mix of direct awards without competition, direct awards that were variations to existing contracts, and awards from framework agreements.3

Gareth Davies, the head of the NAO said:  “The overriding need to create a high volume testing capacity rapidly at the start of the COVID-19 pandemic meant that standard public procurement approaches were not appropriate. Even taking these exceptional circumstances into account, the documentation of the decision-making process for such large contracts was inadequate.

“Our previous reports on COVID-19-related procurement and those of Nigel Boardman have recommended improvements to ensure an adequate audit trail is maintained even when the priority is speed of action. Government has already started to implement some of these improvements, and we will follow up progress.”

Full report: Investigation into the government’s contracts with Randox Laboratories Ltd

Notes for Editors

  1. Randox’s government contracts have been for the supply of polymerase chain reaction (PCR) testing services and goods. By value, almost all the contracts were for the provision of COVID-19 testing services, with less than 1% (£6.9 million) for the provision of testing-related goods.
  2. The contract was for 2,669,100 tests and covered a 12-week period due to end in June 2020. Randox was contracted to complete 300 tests per day at the contract’s start in March 2020, increasing capacity to 60,000 tests per day from mid-May 2020.
  3. Awards from framework agreements are where Randox had previously undergone a competitive process to be appointed onto the framework.
  4. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.

 About the NAO

The National Audit Office (NAO) scrutinises public spending for Parliament and is independent of government and the civil service. It helps Parliament hold government to account and it uses its insights to help people who manage and govern public bodies improve public services.

The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The NAO audits the financial accounts of departments and other public bodies. It also examines and reports on the value for money of how public money has been spent.

In 2020, the NAO’s work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £926 million.

Channel website: https://www.nao.org.uk/

Original article link: https://www.nao.org.uk/press-release/investigation-into-the-governments-contracts-with-randox-laboratories-ltd/

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