Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Accepted
Regulations governing public contracts require departments and other bodies to identify and manage conflicts of...
Recommendation
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 conflicts of interest assessments before contracts are awarded.18 The Department acknowledged it had a clear responsibility to determine whether there are live conflicts of interest associated with those involved in decision making around contracts.19 However, in the case of the first Randox contract, the Department failed to carry out any identification or assessment of conflicts of interest. It erroneously stated on contract documentation that consideration of conflicts of interest was deemed “not applicable” because the contract was directly awarded under emergency procurement procedures.20
Government Response Summary
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.
Government Response
Accepted
HM Government
Accepted
3b: PAC recommendation: In addition to the expected new requirements to record conflicts of interest, government should strengthen its approach to ensure that conflicts of interest are not just documented, but also communicated and acted on by those awarding contracts. 3.3 The government agrees with the Committee’s recommendation. Recommendation Implemented 3.4 Specific legal duties in the Public Contracts Regulations require government departments to take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures, so as to avoid any distortion of competition and to ensure equal treatment of all bidders and suppliers. Companies may be 15 excluded from bidding for government contracts where a conflict cannot be effectively remedied. 3.5 The government recognises that the experience of COVID-19 shows it could be better at ensuring consistency in the management of conflicts of interest. Updated commercial guidance on the management of actual and perceived conflicts of interest was published in May 2021 (PPN 04/21: Applying Exclusions in Public Procurement, Managing Conflicts of Interest and Whistleblowing) 3.6 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. The UK Health Security Agency (UKHSA) is in the process of updating its conflicts of interest policies in response to the PPN. 3.7 The department will ensure that all its contract managers (officials) routinely complete a conflicts of interest declaration during their involvement in managing contracts. All contractors working for the department are required to complete the conflicts of interest form. 3.8 The Procurement Bill currently going through Parliament continues to place legal duties on contracting authorities with respect to the prevention and remedy of conflicts of interest.