20
Accepted
For its first testing contract with Randox, the Department paid a price of £49.60 per...
Conclusion
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 Department could not provide details of contract negotiations prior to the contract’s award, including 33 Q 54; C&AG’s Report, para 15 34 C&AG’s Report, para 2.10 35 Q 54; C&AG’s Report, paras 16–17 36 Qq 59–60; C&AG’s Report, para 19 37 Q 39 38 C&AG’s Report, para 3.5. 39 Q 71 14 Government’s contracts with Randox Laboratories Ltd on the price.40 However, the Department believes it had standard processes in place at the time for interrogating costs and negotiating price reductions. The Department and the Agency acknowledged that no price benchmarking was carried out before the first contract was awarded. They said this was because there were no other companies offering an end-to-end testing service equivalent to Randox’s, so like-for-like comparisons could not be made at that time. The Agency added that the government’s aim at that stage of the pandemic was to build up testing capacity, which meant buying from all suppliers that could offer the necessary services rather than choosing among them.41
Government Response Summary
The government stated that the recommendation has been implemented, referencing the already published Government Sourcing Playbook and Government Functional Standards that set out commercial principles, procurement activities, pricing approaches, and risk allocation.
Government Response
Accepted
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation Recommendation Implemented 6.2 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. 6.3 The Sourcing Playbook describes the activities to be undertaken by commercial teams throughout the commercial lifecycle, with a series of supporting guidance notes covering delivery model assessments, bid evaluation and cost modelling tools. 6.4 There is further enhanced guidance covering risk allocation and pricing approaches and assessing and monitoring the economic and financial standing of suppliers to enable commercial teams to better understand cost-drivers and profit margins. 6.5 The standards to be achieved are specified within published Government Functional Standards: • GovS 008 Commercial • GovS 002 Project Delivery • GovS 006 Finance
Source
Committee
Public Accounts Committee
Report
Seventeenth Report - Government’s contracts with Randox Laboratories Ltd
27 Jul 2022
HC 28
Addressee Bodies
HM Treasury
Timeline
Recommendation age
4.0 yrs
Report published
27 Jul 2022