Government’s contracts with Randox Laboratories Ltd

Public Accounts Committee Closed Inquiry
Opened: 25 Apr 2022 Closed: 8 Nov 2022 Parliament page
At the start of the pandemic Government had to rapidly create high volume COVID-19 testing capacity, but the National Audit Office (NAO) has found that, even taking the exceptional circumstances into account, “the documentation of the decision-making process for such large contracts was inadequate”, and Government did “not document key … Read more
12 Recommendations
11 Conclusions
1 Report
1 Oral session
5 Letters
1 Event
Activity timeline 9 events
8 Nov
2022
Report published
8 Nov
2022
Correspondence
20 Oct
2022
Correspondence
20 Oct
2022
Correspondence
27 Jul
2022
Report published
21 Jun
2022
Correspondence
24 May
2022
Correspondence
18 May
2022
Oral evidence
18 May
2022
Formal meeting (oral evidence session) · The Wilson Room, Portcullis House
Oral evidence sessions 1 session
18 May 2022
View on parliament.uk
Government’s contracts with Randox Laboratories Ltd
Dame Dr Jenny Harries · UK Health Security Agency Shona Dunn · Home Office
Title HC No. Published Items Response
Seventeenth Report - Government’s contracts with Randox Laborato… HC 28 27 Jul 2022 23 Responded
Recommendations & Conclusions
23 results
2 Recommendation Accepted
Seventeenth Report - Government’s …
The Department failed to meet basic requirements to report publicly ministers’ meetings with external parties.
The Department failed to meet basic requirements to report publicly ministers’ meetings with external parties. The Ministerial Code requires all departments to report meetings that ministers have had with external parties and any hospitality received, in the interests of transparency … Read more
Government Response
The Department has strengthened reporting and quality assurance processes, including PPS and ministerial clearance for each entry, and has updated the register of ministerial meetings.
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3 Conclusion Accepted
Seventeenth Report - Government’s …
The Department did not deal with potential conflicts of interest, despite clear concerns about Randox’s...
The Department did not deal with potential conflicts of interest, despite clear concerns about Randox’s political connections. The Department did not show any evidence of taking any care over potential conflicts of interest when it awarded contracts to Randox. This … Read more
Government Response
The government agrees with the Committee’s recommendation. The department has written to the Committee on 31 October 2022 setting out its response as requested. Companies may be excluded from bidding for government contracts where a conflict cannot be effectively.
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4 Recommendation Accepted
Seventeenth Report - Government’s …
The award of the first Randox contract did not receive adequate scrutiny from senior officials...
The award of the first Randox contract did not receive adequate scrutiny from senior officials and the role of ministers in signing it off was unclear. The Department’s then Second Permanent Secretary had some visibility of the first contract awarded … Read more
Government Response
The government published guidance for Ministerial involvement in commercial activity and the contracting process in July 2022, outlining the expected role and involvement of Ministers.
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5 Recommendation Accepted
Seventeenth Report - Government’s …
The Department failed to hold Randox to account for its performance against its first contract...
The Department failed to hold Randox to account for its performance against its first contract and awarded it another £328 million extension without competition. The Department did not set out any key performance indicators for Randox in its first contract … Read more
Government Response
The government agrees with the Committee’s recommendation and states that DHSC Commercial Policy outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances, and all contracts are subject to DHSC’s contract management operating standards.
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6 Recommendation Accepted
Seventeenth Report - Government’s …
The Department did not do enough work to determine whether Randox was making excess profits...
The Department did not do enough work to determine whether Randox was making excess profits from its contracts with Randox. Randox’s published accounts do not yet cover the entire period of the contracts we considered, but they already show how … Read more
Government Response
The Government Commercial Function has published the The Sourcing Playbook which sets out the key commercial principles that underpin commercial activity across Government and provides commercial, finance, project delivery, policy and other professionals with comprehensive guidelines, rules and principles that will help them to get more projects right from the start.
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1 Conclusion Not Addressed
Seventeenth Report - Government’s …
On the basis of a report by the Comptroller and Auditor General, we took evidence...
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health & Social Care (the Department) and the UK Health Security Agency (the Agency) about the government’s contracts with Randox Laboratories … Read more
Government Response
The government provides background information on the contracts awarded to Randox Laboratories Ltd during the COVID-19 pandemic but doesn't respond to any specific recommendation.
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7 Recommendation Accepted
Seventeenth Report - Government’s …
The Department failed to record in its own published transparency releases that Randox had attended...
The Department failed to record in its own published transparency releases that Randox had attended four meetings on testing with ministers in 2020, although it did declare four other meetings involving ministers and Randox. Minutes or records of discussions were … Read more
Government Response
The department has undertaken a review of historic ministerial diaries and updated the register where necessary, strengthened reporting and quality assurance processes, and reinforced transparency requirements across ministerial private offices.
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8 Conclusion Accepted
Seventeenth Report - Government’s …
The Ministerial Code further requires that hospitality received by ministers in a ministerial capacity is...
The Ministerial Code further requires that hospitality received by ministers in a ministerial capacity is declared on departments’ quarterly transparency releases.14 During 8 Q 35, C&AG’s Report, para 13 9 Qq 85, 90–91, 122 10 C&AG’s Report, para 2.25 11 … Read more
Government Response
The government agrees with the Committee’s recommendation to strengthen its transparency processes and ensure that it enforces requirements and takes action where they are not followed. They have undertaken a review of historic ministerial diaries and has, where necessary, updated the register, strengthened reporting and quality assurance processes, and minutes are taken for all meetings with external parties and are centrally held.
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9 Recommendation Accepted
Seventeenth Report - Government’s …
In addition to the wider efforts to improve basic documentation, the Department told us that...
In addition to the wider efforts to improve basic documentation, the Department told us that it had introduced measures such as spot checks by the principal private secretary to reinforce the importance of proper record-keeping in private offices. The Department … Read more
Government Response
The department has written to the Committee on 31 October 2022 with the details requested by the Committee, regarding how its commercial refresh will bring record-keeping up to standard.
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10 Recommendation Accepted
Seventeenth Report - Government’s …
Regulations governing public contracts require departments and other bodies to identify and manage conflicts of...
Regulations governing public contracts require departments and other bodies to identify and manage conflicts of interest in the procurement process. The Procurement Bill, published in May 2022, reinforces these requirements and would also explicitly require departments and bodies to prepare … Read more
Government Response
The government recognizes that the experience of COVID-19 shows it could be better at ensuring consistency in the management of conflicts of interest, and it updated commercial guidance in May 2021. The department has completed its implementation of this PPN, having introduced a clear process to ensure that conflicts of interest are considered at appropriate stages of the procurement lifecycle, including a review of the declaration forms in line with the PPN.
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11 Recommendation Accepted
Seventeenth Report - Government’s …
The Department did not appear to have considered potential concerns about Randox’s political connections in...
The Department did not appear to have considered potential concerns about Randox’s political connections in its decision making, such as Owen Paterson’s lobbying on behalf of Randox, hospitality offered to Matt Hancock by Randox’s managing director, or the company’s donations … Read more
Government Response
The Department has written to the Committee on 31 October 2022 setting out its response regarding information on declared private interests and how it was used to identify potential conflicts of interest in its procurement decisions.
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12 Recommendation Accepted
Seventeenth Report - Government’s …
Consideration of potential conflicts of interest is also relevant to other contracts with testing suppliers.
Consideration of potential conflicts of interest is also relevant to other contracts with testing suppliers. Some suppliers offering testing services were referred to the Department by ministers, MPs or Number 10. The Department marked supplier offers as ‘VIP’ if they … Read more
Government Response
The government has strengthened its approach to ensure that conflicts of interest are not just documented, but also communicated and acted on by those awarding contracts, updating commercial guidance and introducing clear processes, and the Procurement Bill continues to place legal duties on contracting authorities.
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13 Conclusion Accepted
Seventeenth Report - Government’s …
The negotiation and approval processes for the first contract awarded to Randox in March 2020...
The negotiation and approval processes for the first contract awarded to Randox in March 2020 were unclear and not fully documented.25 The Department said that standard processes were in place at the time for commercial specialists to negotiate contracts, which … Read more
Government Response
The department has written to the Committee on 31 October 2022 with the details requested by the Committee, regarding details of when and how its commercial refresh will bring record-keeping up to standard and ensure that this is the case under all circumstances.
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14 Conclusion Accepted
Seventeenth Report - Government’s …
The first contract did not receive the level of senior scrutiny and sign-off that we...
The first contract did not receive the level of senior scrutiny and sign-off that we would expect for a contract of this size, particularly one awarded without competition. The contract was signed by a deputy director in the Department after … Read more
Government Response
The Government Commercial Function published guidance for Ministerial involvement in commercial activity and the contracting process in July 2022, clarifying the role of ministers in procurement processes, including contract discussions and approvals.
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15 Recommendation Accepted
Seventeenth Report - Government’s …
The Cabinet Office did not approve the first contract with Randox, as it would normally...
The Cabinet Office did not approve the first contract with Randox, as it would normally do for contracts worth over £10 million in line with its regime of commercial spending controls. The Department did not submit the Randox contract for … Read more
Government Response
The department has written to the Committee on 31 October 2022 with the details requested by the Committee regarding when and how its commercial refresh will bring record-keeping up to standard.
HM Treasury
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16 Recommendation Accepted
Seventeenth Report - Government’s …
The Department did not include key performance indicators (KPIs) in its first contract with Randox...
The Department did not include key performance indicators (KPIs) in its first contract with Randox against which it could judge how the company was performing. The Department said the reason it had not set performance measures in the contract was … Read more
Government Response
The government agrees with the Committee’s recommendation and states that DHSC Commercial Policy outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances, and all contracts are subject to DHSC’s contract management operating standards.
HM Treasury
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17 Conclusion
Seventeenth Report - Government’s …
Randox asked for government help within weeks of being awarded its first contract to enable...
Randox asked for government help within weeks of being awarded its first contract to enable it to deliver its contracted level of tests. Randox needed access to specialist testing equipment held in universities and other laboratory facilities, which it and … Read more
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18 Conclusion Not Addressed
Seventeenth Report - Government’s …
The first contract was originally intended to run for 12 weeks, ending in June 2020.
The first contract was originally intended to run for 12 weeks, ending in June 2020. However, Randox faced difficulties meeting the service levels specified in the contract. There were a number of reasons for this, including Randox taking longer than … Read more
Government Response
The response addresses a different conclusion/recommendation (conclusion #19) about holding Randox to account.
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19 Recommendation Accepted
Seventeenth Report - Government’s …
Despite issues with the performance of the first contract, in October 2020 Randox was awarded...
Despite issues with the performance of the first contract, in October 2020 Randox was awarded a contract extension worth £328 million (around two and a half times the value of the original contract), again without competition. At the time, the … Read more
Government Response
The DHSC outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances, including setting performance indicators and using these to hold providers to account via ongoing monitoring and reporting of KPIs.
HM Treasury
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20 Conclusion
Seventeenth Report - Government’s …
For its first testing contract with Randox, the Department paid a price of £49.60 per...
For its first testing contract with Randox, the Department paid a price of £49.60 per single test. The contract price included the cost of supplying test kits, laboratory processing, transporting test kits and completed samples, and reporting of results. The … Read more
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21 Conclusion
Seventeenth Report - Government’s …
The Department said that in relation to contract pricing, it did not consider the advantage...
The Department said that in relation to contract pricing, it did not consider the advantage to Randox that might be gained by the company winning early government contracts for testing (for example, from setting itself up as an established provider … Read more
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22 Conclusion Accepted
Seventeenth Report - Government’s …
The Department did not monitor the profitability of Randox before deciding to award contracts to...
The Department did not monitor the profitability of Randox before deciding to award contracts to the company. The Department said that when contracts were awarded in 2020, it did not have the time or the ability to undertake this sort … Read more
Government Response
The Government Commercial Function has published the The Sourcing Playbook which sets out the key commercial principles that underpin commercial activity across Government and provides commercial, finance, project delivery, policy and other professionals with comprehensive guidelines, rules and principles that will help them to get more projects right from the start.
HM Treasury
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23 Conclusion Accepted
Seventeenth Report - Government’s …
Randox’s published accounts do not yet cover the entire period of the contracts we considered.
Randox’s published accounts do not yet cover the entire period of the contracts we considered. Its accounts for the year to 30 June 2021 reflect how the company has already expanded as a result of increased business through the pandemic. … Read more
Government Response
The Government Commercial Function has published the The Sourcing Playbook which sets out the key commercial principles that underpin commercial activity across Government and provides commercial, finance, project delivery, policy and other professionals with comprehensive guidelines, rules and principles that will help them to get more projects right from the start.
HM Treasury
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Government Response AI assessment · 20 of 12 classified
Accepted 18
Not Addressed 2
Total 12 recs + 11 conclusions
Correspondence 5 letters
8 Nov 2022 Correspondence from Shona Dunn, Second Permanent Secretary Department of Health and Social Care, re TM17 - Treasury Minute response to the Randox PAC report, dated 31 October 2022
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20 Oct 2022 Correspondence from Schillings relating to the Government's Contracts with Randox Laboratories Ltd dated 14 September 2022, 25 and 26 July 2022
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20 Oct 2022 Correspondence to Schillings relating to the Government's contracts with Randox Laboratories Ltd dated 20 October 2022 and 26 July 2022
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21 Jun 2022 Joint correspondence from Shona Dunn, Second Permanent, Secretary Department of Health and Social Care and Dr Jenny Harries OBE, Chief Executive, UK Health Security Agency, re Public Accounts Committee, Government’s contracts with Randox Laboratories Ltd, dated 13 June 2022
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24 May 2022 Correspondence from The RT Hon Matt Hancock, West Suffolk, re NAO report on the Government's contracts with Randox Laboratories Ltd, dated 20 May 2022
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