Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Not Addressed
The first contract was originally intended to run for 12 weeks, ending in June 2020.
Conclusion
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 expected to increase capacity as well as lower than forecasted demand for testing. The Department and Randox agreed that Randox would keep testing beyond the expected end of its contract in June 2020, and it met its contracted number of tests in September 2020. During the extended period that Randox continued testing to meet its contractual commitments, the Department established additional performance measures. These included test turnaround time targets introduced in July 2020, which measure the time taken to process tests.35
Government Response Summary
The response addresses a different conclusion/recommendation (conclusion #19) about holding Randox to account.
Government Response
Not Addressed
HM Government
Not Addressed
5: PAC conclusion: The Department failed to hold Randox to account for its performance against its first contract and awarded it another £328 million extension without competition. 5: PAC recommendation: We expect clear and definitive assurance from the Department that even where contracts are awarded in exceptional circumstances, it will set performance indicators and use these to hold providers to account. 5.1 The government agrees with the Committee’s recommendation Recommendation Implemented 5.2 DHSC Commercial Policy outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances. 5.3 Contract performance begins from the outset of a procurement project where the business captures its requirements and success (performance) criteria. These requirements are further detailed within the procurement strategy and are developed to specify the exact Key Performance Indicagtor (KPI) deliverables the supplier is expected to achieve. Success criteria are included in award criteria and evaluated throughout the tendering processes. The commitments made by suppliers are ratified into the contract as obligations, alongside a clearly defined KPI and performance management schedule which provides the terms on which the relationship and performance will be governed. 5.4 All contracts (including those awarded in exceptional circumstances) are subject to DHSC’s contract management operating standards; including a range of contract governance requirements such as ongoing monitoring and reporting of KPIs via a scorecard. 5.5 Each contract is assigned an Operational Contract Manager from the relevant business area and the OCM and Commercial review supplier performance against KPIs (frequency being determined by value and risk level of the contract). Where KPIs are not being achieved a performance management discussion is had with the supplier. Discussions may result in informal measures or more structured interventions resulting in a remedial action plan being implemented and monitored to ensure contractual obligations are met, and that providers can be held to account – particularly where there may be contractual service credits which impose financial penalties on suppliers who do not meet their contractual KPI obligations.