Analysis of the UK Government's procurement of Covid-19 diagnostic tests during the pandemic has found a high incidence of direct awards (when a contract is awarded to a contractor without advertising and competition), leading to questions about transparency and value for money.
The findings are reported in a White Paper by Dr Luke Butler, Head of the UK Public Procurement Unit within the University of Nottingham's Public Procurement Research Group. The paper examines how test kit contracts were awarded, technically validated for use, and approved for placement on the market as part of the Government's Test and Trace strategy.
The UK has an established diagnostics industry comprising suppliers of domestic origin and multi-nationals with UK subsidiaries. This industry may have had actual or potential capacity to ramp up manufacturing and related support to scale for certain requirements.
Dr Butler continued: "However, in the early stages of the pandemic, it was necessary to manufacture test kits quickly for mass use which, in reality, meant relying primarily on suppliers from countries with established capacities to deliver on a massive scale (e.g. China and the US)."
The paper, commissioned by the British In Vitro Diagnostic Association (BIVDA), identifies a number of issues, lessons learnt and recommendations. It credits the Government for procuring and approving PCR and lateral flow tests for public and private use, thereby helping to rapidly mobilise the Test and Trace strategy. However, the paper highlights the need for, among other things, a more formal Government–industry supplier forum for UK diagnostics to ensure industry can react to, and bid for, contract opportunities.
Dr Butler outlines that many contracts were awarded quickly, without competition, where processes for award were not always clear. Further, many test kits failed validation. In addition, whilst certain manufacturers were exempt from full regulatory approvals, many became subject to a new burdensome approvals regime for private tests. All of these aspects are likely to have impacted on the market for supply. Dr Butler identifies that it was not always clear to industry what was required, and how to meet requirements in procurement, validation and approvals processes. He recommends that the government should:
- Develop clear Target Product Profiles as early as possible to ensure effective "demand signalling" in line with Government strategy – it was not clear at the outset what the Government required and how industry could meet requirements.
- Improve the clarity and quality of validation process guidance – the guidance is largely published ad hoc on gov.uk websites. This requires information but does not always clearly identify how it will be assessed so that suppliers can effectively engage and ensure that they collect and demonstrate the right evidence on trialled test performance. For example, it was not always clear what. sample sizes were needed in order to meet requirements.
- Improve communication and transparency by publishing reviews and interim reports of the conduct of the validation and approvals processes – a high proportion of test kits failed validation but earlier communication on how to improve could reduce failure rates and the visibility of processes.
- Demonstrate better awareness of the cumulative impact of Government decisions on the market – validation and procurement decision-making was not always clearly aligned. Early direct awards meant some suppliers were quickly validated and approved whilst others experienced delays in validation which further justified extending direct awards. Further, whilst some suppliers were exempt from regulatory approvals, others became subject to a new burdensome regulatory approvals regime for private tests. Better foresight of the effect of various interventions on the market could reduce perceptions of industry being "shut out". The paper also highlights the need to drive more competition into emergency procurement, where possible. It argues that, whilst legally justified on grounds of extreme urgency, there was a high incidence of direct awards which led to questions about transparency and value for money.
The paper recommends that Government should carefully consider what are the challenges which prevent competition, how it can be facilitated even in emergencies, and how it plans for the use of competitive procurement mechanisms earlier e.g. use of framework agreements and dynamic purchasing systems.
The Government has identified the significant role of diagnostics in the health and social care system in its recently published MedTech Strategy. However the Government needs to make a considered effort to work more transparently and more effectively with UK industry. This will also reduce the risk of legal challenges or general complaints about the transparency and accountability of decision-making. This is also key in improving public trust and demonstrating value for money in public procurement.
Doris-Ann Williams, Chief Executive of BIVDA, said: "The COVID pandemic really brought the role of the IVD sector to the public's attention and our member companies were all very keen to play their part in helping to provide information to help manage and treat the UK population. However it was felt that their role was not as well recognised as the vaccines and drugs sectors, and BIVDA wanted to provide a clear timeline on the procurement and lessons that could be learnt by both sides in the event of a future national health-related emergency. We wanted this to be independently led and considered, not a paper rushed out amid all the other reports at the beginning of 2022. We are delighted that Dr Butler from the University of Nottingham agreed to undertake this for us and I'm delighted BIVDA is now in a position to put this information into the public domain."
