Category: Public Procurement

There is no good reason why any public contracts are not in the public domain – the AstraZeneca vaccine contract or otherwise

29th January 2021

Yesterday this blog set out in detail what could be worked out form public domain sources about the politically controversial AstraZeneca contract for the provision of vaccines to the European Union.

That post was an exercise in detective work, aided greatly by the publication of a redacted version of a contract with another supplier, the terms of which fitted neatly with the details disclosed by the European commissioner and the CEO of AstraZeneca in their public bickering.

In the comments below that post, some commenters were able to glean even more from public sources, including from further examination of the published redacted contract (and many of the commenters at this blog are awesome and experts in their fields).

It was an interesting and indeed fascinating exercise.

But.

It was something which should not have been needed.

For the actual contract should have been in the public domain to begin with.

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There is no good reason why public contracts are not in the public domain.

(By ‘public contracts’ I mean contracts for the supply of goods, services and works –  including for major projects – to public authorities.)

There are (supposed) reasons – the cant phrase ‘commercially sensitive’ is often the excuse – but no good reasons.

But there are two good reasons why public contracts should be in the public domain.

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First, the goods, services and works supplied under public contracts are paid for with public money.

And public authorities tend to be reliable payers.

Fortunes can and often are made from lucrative public contracts.

It is not unusual for a valuable public contract to be the security for all sorts of further commercial transactions, so dependable is a public contract as a high-value revenue stream.

A good part of the wealth of the City of London, and of those currently enjoying lockdown life in expensive suburbs, is based not on the hard cut-and-thrust of private sector life but on the soft cushions of public sector contracts.

(And this dependency culture contrasts with the complaints of backbench government supporters about the supposed dependency-culture of free school meals.)

The price of this access to public money should be the burden of transparency.

A private sector company should not have the benefit of these lucrative and low-risk public contracts, and also have the contract shielded from public scrutiny.

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Second, turning from revenue to performance, there is a public interest in publication of how any public contract addresses issues of risk allocation and sanctions for breach.

This is not about prices – as the European commission showed in publication of the redacted vaccine supply contract, it is perfectly possible to publish the substance of how a contract manages risk without publishing (real or imagined) ‘commercially sensitive’ material.

How does the contract deal with foreseeable risks?

How does the contract allocate the burden of risks between the parties?

What happens if a provider is unable to provide the agreed goods, services or works?

This is the meat of any substantial contract – not just the list of what is bought and for what price.

If that is all a contract is then there would be no need for any contract to be more than a page long.

The bulk of a contract, other than for the most simple of transactions, deals with what happens when things do not turn out as agreed – and what can happen next.

And in any public contract what happens next in the event of any non-performance is as much a matter in which the public interest is engaged as in the performance.

But when a contract is – in its entirety – hidden from public view, the public have no knowledge of how that contract allocates risk – or indeed whether the contract allocates risk at all.

This in turn means there will be contracts where the risk of non-performance is loaded entirely on the public authority.

And with such contracts the supplier will not only have the benefit of a lucrative revenue stream but also the benefit of it being legally risk-free.

A public supply contract for cakes, and for the service of eating them.

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Publication of such contracts would not, at a stroke, mean that problems of non-performance or overcharging will go away.

Public procurement has many problems, and non-transparency is only one.

But the ‘commercially sensitive’ cloak of invisibility serves no one other than the public officials and suppliers who are shielded from any meaningful scrutiny.

A public official can sign a bad deal (and then sign amendment after amendment to that deal), and no one will find out because it is all ‘commercially sensitive’.

A supplier can get away with either bad contracts or terms not being enforced against them, again because it would be commercially sensitive’ for the terms of the contract to be published.

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Some of those in public procurement will view the above as harsh – and will protest: how could you be so offensive and so doubtful.

But such displays of (non-commercial) sensitivity are not a good reason for non-disclosure of public contracts.

If all is well, then nothing will be lost with publication of public contracts – and publication will provided public confidence that good contracts are being entered into at fair prices and with effective and enforceable allocations of risk.

And if all is not well, then…well.

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The EU-UK trade agreement – and the tale of two tables

Boxing Day, 2020

The post-Brexit agreement on trade and other matters is, it seems, in final draft form – although it has not yet been officially published.

What seems to be a copy of the final draft is here.

Proper analysis of the agreement will necessarily take time – though an initial glance showed about ten pages devoted to creating dozens and dozens of joint European Union and United Kingdom talking shops – committees, assemblies, talking shops, and so on.

This indicates that Brexit will in fact be a negotiation without end.

So while we digest this Christmas feast, let us look at a couple of Christmas cards.

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The first is a ‘scorecard’ made public on Christmas Eve.

This purports to show a sequence of heady United Kingdom ‘wins’.

It is too soon to tell whether this document accords with the actual draft agreement, but even on its own terms it is confused and unconvincing.

For example, if we look at public procurement, where the United Kingdom had no proposals, the outcome is dubbed a ‘mutual compromise’.

But on legal services, where the European Union in turn had no position, the outcome is dubbed a United Kingdom ‘win’.Some topics are artificially broken up, perhaps to claim more United Kingdom ‘wins’ (for example, Financial Services), and other ‘wins’ not substantiated by accompanying text (especially Law Enforcement).

Such inconsistencies and distortions mean that, even on the face of it, the ‘scorecard’ is not a reliable document to form a view on the draft agreement either for or against.

The table has been created by the United Kingdom government (or a supporter of government policy) as propaganda, not analysis.

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The United Kingdom government, however, is not alone in presenting a table as a spinning exercise.

Again, it is too soon to tell whether this table is accurate in comparison with the actual agreement, though there are no obvious internal inconsistencies in the document.

And maybe significantly, this second table is not framed as ‘wins’ but is instead about losses – the scope and areas of coverage.

What is outside the agreement, as opposed to what was included.

Looking down the ticks and crosses indicate what the United Kingdom might be losing as opposed to ‘winning’.

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Just as the number of talking shops to be created under the agreement show that Brexit will now become a negotiation without end, the existence of these two tables indicate that the merits of Brexit will also be an ongoing argument.

Brexit will be a contested subject for at least a generation.

This trade agreement may be bringing part of the Brexit story to a formal conclusion, but it certainly does not bring Brexit to an end.

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POSTSCRIPT

The United Kingdom government has now published the final draft agreement and a 34 page summary – see here.

And the European Union has published its suite of documents here.

 

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This law and policy blog provides a daily post commenting on and contextualising topical law and policy matters – each post is published at about 9.30am UK time.

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When Virgin Care sued the NHS and how Virgin have since misdirected and misrepresented about what happened

1st May 2020

Even Richard Branson now admits it may have been “unwise” for Virgin Care to have sued the NHS.

The fact that a Virgin company once sued the NHS is no doubt inconvenient for Branson, and Virgin generally, as they seek support from the United Kingdom government during the current coronavirus emergency.

This post sets out the circumstances of the legal claim and why Virgin Care was not compelled to sue the NHS.

This post also sets out that the reported settlement amount of £2million that was paid to Virgin Care had to have been found from somewhere, presumably either from other services or through increased borrowing.

And this post sets out the systemic misrepresentations and misdirections from Virgin in seeking to cloak the inconvenient fact that Virgin Care once sued the NHS for money. 

In summary, this post avers that Virgin Care made a sequence of “unwise” decisions: to sue the National Health Service, to be party to a confidential settlement of that claim, and to have since then misrepresented and misdirected about what happened.

For even if, as Branson suggests, it was “unwise” for Virgin Care to sue the National Health Service, it would have been better if that was openly admitted to have been a cock-up, rather than a strategy based on confidentiality and misleading public relations.

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Let us start with what Richard Branson says about this in his recent open letter.

He (or a PR attributing the words to Branson) says:

“Much has been written about Virgin Care’s dispute with a commission over a contract a number of years ago. Some will say it was unwise for Virgin Care to do this, but the most important thing is that Virgin Care was never intending to profit from it and 100 per cent of the money awarded went straight back into the NHS.”

This statement is worth reading carefully.

The “a number of years ago” in fact refers to events as recent as in 2016 to 2017.

He accepts there was a “dispute” and admits “[s]ome will say that it was unwise for Virgin Care to do this” – though the “this” here is left unclear.

(The implication of the “unwise” comment seems to me to be an acceptance that Virgin Care could have done things differently, as it can hardly be “unwise” to take the only option available.  The word itself suggests there was a choice.)

Branson then sets out the defence that the money “awarded” (itself a strange word to use here, as we will see below) “went straight back into the NHS”.

Branson then earnestly assures us that this defence, together Virgin Care never “intending”(?) to profit from the dispute is “the most important thing”.

For the reasons set out below, you may take a different view as to what “the most important thing” was in all this was.

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Branson’s open letter links to a statement from Virgin Care dated 1st June 2019.

This significant statement was published by Virgin Care itself, and Virgin Care is responsible for the content and its headline.

The statement should be read carefully, not least because it was written carefully.

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Anyone clicking into the Virgin Care statement from Branson’s open letter or because they wanted to find out about the matter themselves are met with a headline set on a picture of happy smiling children.

The headline is: “Why it’s wrong to say we sued the NHS because we lost a contract in Surrey”

Note what the headline does not say: it is not simply “Why it’s wrong to say we sued the NHS”.

And the reason the headline is not “Why it’s wrong to say we sued the NHS” is by reason of the weasel words “because we lost a contract in Surrey”.

Many who come across the headline will no doubt not realise the significance of those weasel words.

Those who come across the headline may even think that Virgin Care did not even sue the National Health Service.

Weasel words can make such a difference.

The presumed intention of the weasel words is to make the headline somehow technically true.

But even with a literal construction or interpretation, the headline is misleading to the point of conveying a false impression.

For Virgin Care did sue the National Health Service, and the basis of the legal claim was that Virgin Care was not awarded a contract in Surrey.

Without the non-award of the contract, Virgin Care would not have had what lawyers call “a cause of action”.

Perhaps the chosen headline is intended to read as meaning that the real, subjective intention of Virgin Care in suing the National Health Service was to serve some selfless, noble purpose.

Or perhaps there is a verbal sleight-of-hand with “because we lost a contract in Surrey” as the claim was based on a non-award (in this case, renewal) of a contract rather than the “loss” (that is, termination) of  a contract.

Who knows.

But as a matter of law, the headline gives a false impression.

And giving such a false impression cannot be an accident.

Having considered the (in my view, deliberately) misleading headline, now let us look at what Virgin Care has (carefully) chosen to say in the rest of their very own published statement.

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The statement begins with “Much has been written and said about the procurement process which the NHS in Surrey ran back in 2016…”.

You will recall that the statement in Branson’s open letter begins in near-identical terms: “Much has been written about Virgin Care’s dispute…”.

This suggests at least a similar approach to public relations, if not the same PR.

The Virgin Care statement then asserts “A lot of what has been written is misleading or misinformed…”.

Given that the chosen headline to this statement is itself misleading, this suggests that the publisher of this statement has a rather brass neck.

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So you can understand what then follows in the Virgin Care statement, this post now will explain a couple of things about the law of public procurement.

First: the law of public procurement provides special rules for public bodies when purchasing goods, services and works: in essence, public procurement exercises should be competitive, transparent and fair, with bidders being treated equally (including any incumbents bidding again) and, if there is a breach of these special rules, the bidders adversely affected should have a legal remedy.

Second: a disappointed tenderer can, before any contract is executed, seek to have the procurement exercise suspended and/or re-run if there has been a breach of these special legal rules; and if the contract has already been executed, the disappointed tenderer can seek an award of damages as a money remedy (and sometimes other remedies) for a breach of the special legal rules.

Knowing these two things about the law of public procurement are important for understanding the predicament of Virgin Care and the options that were available to it when it did not win this particular Surrey National Health Service contract.

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The contract in question was substantial: a five year contract for providing certain children’s services to the Surrey National Health Service.

The contract was reportedly worth £82million.

Virgin Care was the incumbent, and was re-bidding to carry on providing the services.

Virgin Care thought highly of the services they had provided for the previous five years:

“Our bid was based on five years’ experience of running the services, making improvements which would make a real difference for families and taking on up to 20% additional demand each year without any additional funding from the NHS.”

Surrey National Health Service, however, took a different view and awarded the contract to another provider, who is still in place providing the services.

The loss of any public contract is a hard hit for any service provider, but that is the nature of public procurement: bidders know that there are fixed terms and a serious risk of another bidder winning at the next contest.

Virgin Care were unhappy at not being selected and sought, as is their right, feedback on why they had not been selected.

There was nothing wrong with this, and it is a sensible move for any disappointed tenderer so that future bids can be improved.

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According to Virgin Care, this feedback indicated “flaws” and raised “concerns” about the procurement exercise:

“When we asked those questions in Surrey, we became seriously concerned there may have been flaws in the process and asked the commissioners to look again at how things had been done to make sure they had picked the right provider.”

Again, there can be nothing wrong with this.

There is a question – which I have put to Virgin Care but got no answer – why Virgin Care had not identified the flaws and raised the concerns before in the procurement exercise.

And there is the question of what these flaws and concerns were – and given these were in respect of a high-value contract for children’s services to the National Health Service – there is a public interest in these flaws and concerns being open knowledge.

Virgin Care will not say what these flaws and concerns were.

There is a report that there are confidentiality and non-disclosure terms in place between Virgin Care and Surrey National Health Service, as part of the settlement of this claim.

But such agreements should not prevent the publication of information in the public interest.

There can be (in my opinion) no good reason for the alleged flaws and concerns not to be published.

After all: what about the happy and smiling children?

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Surrey National Health Service proceeded to execute the contract with the current provider.

Perhaps it was wrong for Surrey National Health Service to do this, and that the procurement exercise should have been suspended or re-run.

(If a procurement exercise is suspended, the incumbent provider often obtains an extension on its current contract.)

We do not know whether it was right or wrong for Surrey National Health Service to execute the contract, and so we should give Virgin Care the benefit of the doubt and assume that Surrey National Health Service should not have done this.

What then?

There is no question that Virgin Care could sue, like any disappointed tenderer where there has been a breach of the public procurement rules.

And the possibility of such legal claims is important for ensuring that public bodies abide with the rules.

And it may be that it was in the commercial self interest of Virgin Care to sue, despite the claim that it is not a profit making entity.

And there was probably a duty on the directors of Virgin Care to consider all their options.

But what followed was a choice.

Virgin Care chose to sue the National Health Service and to obtain a money remedy.

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Now, let us go back to the Virgin Care statement, and to two paragraphs in particular:

“The commissioners refused to discuss our concerns with us and signed a contract with their new provider. Although our ideal outcome was that the process was redone properly, and everyone had a fair opportunity to win, signing the contract meant the CCG had turned this into a claim which could only be settled with the payment of damages.

“In other words, it was the NHS commissioners who made this dispute about money.”

Insofar that once a contract had been executed with the new provider, these paragraphs set out that the only legal remedy available to Virgin Care was to sue for damages.

This is probably true (though other remedies may also have been available depending on information we do not know).

But these sentences give a false impression that Virgin Care was compelled to sue.

The National Health Service commissioners “turned this into a claim which could only be settled with the payment of damages” and “it was the NHS commissioners who made this dispute about money”.

These statements are ugly, and convey an unfortunate impression of victim-blaming: it was the National Health Service that made Virgin Care bring a legal claim, Virgin Care did not want to do it, really it did not, genuinely.

Virgin Care did not have to bring a claim, and Virgin Care could have chosen not to do so.

Virgin Care, aware of “flaws” could have brought these flaws to public attention, or made a complaint, or requested an investigation.

Virgin Care could have taken the view that any litigation would be costly for the National Health Service and that it would not be a good use of the National Health Service’s scarce resources.

Virgin Care, of course, may have had the right to sue – just as McDonald’s once had the right to sue the McLibel Two.

Virgin Care may have even had a strong case, though we do not know what the alleged flaws were.

But it was entirely a decision for Virgin Care.

And as Branson now seems to admit, an “unwise” decision was taken.

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Once the claim was brought, it appears there was a quick settlement of the legal claim, with payments reportedly totalling £2million being paid to Virgin Care.

That there was a swift settlement tells us nothing about the merits of the claim.

A public body can prudently seek to settle quickly when it faces a strong claim.

And a public body can prudently seek to settle quickly a claim with little or no merit, instead of enduring costly litigation.

We do not know the merits of the claim, despite the alleged “flaws”.

What we do know is that the reported £2million had to be found from somewhere, as it would be an amount additional to what would be paid for the contract that had been awarded.

Surrey National Heath Service would have to pay for both the services and a settlement amount on top.

Logically, the amount had to come from elsewhere in the budget (and thereby from other services.

Perhaps even services for happy smiling children.

Or it had to come form further borrowing, presumably at interest.

You may think that the National Health Service needed that money more than Virgin Care.

The defence offered by Virgin Care – and indeed by Branson – is that the £2million was given “straight back” to the National Health Service – presumably by the provision of other contracted services.

If so, this does not necessarily mean the money was given “straight back” to those same parts of the National Health Service that now had a £2million gap because of the settlement.

And you may think that the National Health Service itself was in a better position to know what to do with £2million than any external service provider exercising its selfless discretion.

You may be impressed by this defence of Branson and Virgin Care.

Or you may not be.

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What seems to have happened here is that Virgin Care “unwisely” sued Surrey National Health Service and that Branson and Virgin more widely are embarrassed by this inconvenient fact.

The adverse publicity from this legal claim certainly offsets the £2million obtained.

But what Branson and Virgin should do, in my view, is openly admit that Virgin Care cocked up by suing the National Health Service, even though it was entitled to do so.

Instead, as set out above, there has been a doubling-down.

Things are confidential which should not be confidential.

Headlines, sentences and paragraphs misdirect and misrepresent the law and the facts.

The National Health Service is made out to be to blame for a decision of Virgin Care.

All these were also decisions.

They are decisions just as “unwise” – if not more so.

Virgin Care sued the National Health Service when it did not need to do so, and since then Virgin has not been plain about what happened.

And this perhaps is “the most important thing”.

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The extraordinary Sir Simon McDonald “clarification” – a guided tour

22nd April 2020

Yesterday a senior civil servant gave evidence to a select committee.

In that evidence was a fascinating exchange, and it is worth watching carefully.

Later that day, the civil servant sent an extraordinary “clarification”.

https://twitter.com/TomTugendhat/status/1252679936768344070

This is a guided tour of that supposed clarification letter.

One theme of this tour is that the letter is not one would expect from a senior civil servant seeking to clarify something otherwise unclear, and that the letter instead makes the situation far less clear.

The letter also appears to have had more than one author, and it appears that it is a document negotiated between the civil servant and others.

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“EU VENTILATOR PROCUREMENT SCHEME”

The letter has a title, and it is worth noting for what follows that it is about the ventilator scheme. 

“I wanted to clarify a point…”

You may think that the point that was made to the committee was clear, and that its clarity is what caused the political fuss.

(Here it is also worth considering whether the letter was entirely voluntary, or whether the civil servant had insisted on a ministerial direction to write the letter.)

“…the EU’s Ventilator procurement scheme – the Joint Procurement Agreement”

This is where the letter starts becoming (ahem) unclear.

From the title it would seem we are looking at just one of the recent procurement rounds under the joint procurement agreement.

But the addition of the text after the hyphen makes it less clear what is about to be denied in the next paragraph.

“Unfortunately, due to a misunderstanding, I inadvertently and wrongly…”

Anyone who knows about how careful senior civil servants are in drafting formal documents would at this stage affect an Alan Hansen-like face discussing some footballing defensive disaster.

Some would even say that the “due to” is a tell that someone other than the civil servant was involved in drafting this letter (more on this later).

The “misunderstanding” is not stated.

The word “inadvertently” adds nothing to the “misunderstanding” and is surplus.

The word “wrongly” is vague, because it is not clear which of the following propositions is wrong.

And we are not even half way through this sentence.

“…that Ministers were briefed by UKMIS on the EU’s Joint Procurement Agreement scheme and took a political decision not to participate in it”

Something inside this text is “wrong” but it is not clear whether it wrong in part or in full.

The insertion of “by UKMIS” is eye-catching, as it means ministers could have been briefed by others.

And the text does not say Ministers were not aware – and that would have been easier to write.

The reference to “the EU’s Joint Procurement Agreement scheme” is also not clear – the United Kingdom has been a signatory to the agreement since 2014 and is still a signatory following Brexit (now along with fellow non-members Iceland, Norway and Bosnia-Herzegovina) and so the United Kingdom was (and is) already participating in it.

And what does “political decision” mean?

Why not just “decision”?

The longer this letter goes on, the less clear it becomes.

And then the next two sentences are a cracker.

“This is incorrect.”

What is incorrect?

He has already stated something is “wrong” – but surely this is not some sly double-negative?

The preceding sentence is so jumbled and tortured it is not clear what is being negated by “This is incorrect”.

“Ministers were not briefed by our mission in Brussels…”

But could have been briefed by others.

“…about the scheme…”

Which scheme?

The ventilator procurement scheme by itself, or the joint procurement agreement scheme more generally?

“…and a political decision…”

As opposed to another sort of decision?

“…was not taken on whether or not to participate”

Why is this so specific?

Was some other decision taken?

And now we come to the third paragraph of the “clarification”, where things get even more unclear.

“The facts of the situation are as previously set out.”

Where and by whom?

“Owing to…”

So the supposed author does know better than to use “due to” earlier in the letter – hmmmmm.

“…an initial communications problem…”

This is vague in two ways – why “initial” and why no express mention of the supposed email?

A communication between whom?

Between the European Union and the United Kingdom?

Or within the United Kingdom?

“…the United Kingdom did not receive an invitation in time…”

But as part of the decision-making meetings before the procurement, the United Kingdom would have been aware of the procurements.

It would not have had to have waited until the invitation to know about them.

This would be like Mr Bean being surprised when sending himself a Christmas card.

“…to join in four joint COVID EU procurement schemes.”

Notice the subtle switch to the plural – “schemes”.

This letter starts off about the ventilator scheme, then it calls the joint procurement agreement a scheme, and now it is talking about four schemes.

Which scheme does the “political decision” in the proceeding paragraph now refer to?

“As those four initial schemes had already gone out to tender we were unable to take part.”

What does “we were unable to take part” mean here?

Is it limited to the past tense?

Can we take part now?

And how does this accord with other statements about the United Kingdom now taking part?

“The Health Secretary has set out the Government’s position on this going forward.”

The ugly “going forward” indicates that someone else was involved in the drafting of this statement – no senior civil servant would happily use such a phrase in formal correspondence.

But more generally, what does this statement mean – what is the “this” in that sentence?

“…this clarification…”

This letter is the opposite of a clarification.

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Senior civil servants are, like lawyers, wordsmiths.

A formal document, such as a letter to a select committee, should be a considered, structured and coherent composition.

But this letter is all over the place (Alan Hansen wince).

The letter is tortured and awkward, and this indicates that the letter was a negotiated document – and negotiated to the point of strangulation.

The particular sentences may be all correct, but there seems to be gaps between sentences, and other things seem cloaked (especially “scheme”/”schemes”).

The overall letter smacks of evasion and misdirection.

The civil servant’s statement was clear, and this clarification is not.

Something is up here.

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Brexit, public procurement, and Dominic Cummings

9th January 2020

Yesterday on the Financial Times website is a post by me on the Prime Minister’s adviser Dominic Cummings’ approach to public procurement (set out most fully here).

Articles for the FT and any other mainstream media site have to be a certain length and in a certain style – but here I can add more background and explain more fully what this is about and why it (probably) matters.

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To start with: what is public procurement?

One good way of understanding public procurement is the difference it makes to what public authorities can and cannot do, compared with what private individuals and companies can and cannot do.

A private individual or a private sector company can – at least in theory – contract with whoever they want, subject to the general law of the land.

A private individual or private sector company seeking a supplier is not generally obliged to hold competitions, to advertise, or even contract with the lowest or most economical seller.

(Yes, there are various laws against racial and sexual discrimination, and so on – but the commercial aspects of the bargain are largely unregulated for private entities.)

In essence, a private individual or a private sector company is free to make a bad bargain, and to pick and choose its suppliers as they wish.

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And, but for the law of public procurement, the same would be the general position for public bodies, subject to their general legal power (or “vires” as lawyers would call it).

But public bodies are not generally free to make a bad bargain, or to pick and choose its suppliers as they wish.

Public bodies cannot just hire and fire suppliers as they wish.

The law of public procurement instead regulates what public bodies can and cannot do when they are making purchasing decisions – whether for goods, services, or grand development projects – from paper clips to aircraft carriers.

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Public procurement is about process – the principles and procedures public bodies must follow when making purchasing decisions.

The principles are broad and apply to all purchases, while the detailed procedures – set out in long regulations – are usually for high-value purchases.

The principles of public procurement are straightforward and commendable.

Purchasing authorities must advertise and specify what they want; they must set out and follow a transparent process; they must apply evaluation criteria consistently; they must treat tenderers equally and must not discriminate in favour of incumbent suppliers or national champions; and, in the event the public body fails to accord with such principles, the disappointed tenderers must have a remedy.

Much of the applicable law for these principles comes from the European Union.

This is because the law of public procurement is as much a part of the EU Single Market as competition law or the law regulating State aid.

Public contracts are lucrative, and so the markets for those contracts should be opened up to all potential suppliers, especially those from outside the member state.

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Described in the way above, the law of public procurement is a Good Thing.

Who could possibly be against?

Well.

There is a difference between neat theory and messy reality.

In practice, the law of public procurement (at least for high-value contracts) is not only subject to these broad, sensible principles but also prescriptive codes set out in pages and pages of regulations, paragraph after paragraph, sub-paragraph after sub-paragraph.

These regulations convert any major purchasing decision into an elaborate, lengthy administrative process.

And this thereby means that purchasing decisions are (or seem to be) often captured by process.

And as tender exercises are expensive and time-consuming, they in turn tend (no pun intended) to be dominated by large specialist companies who can afford to sink months (even years) of time and thousands of pounds on each bid, without any guarantee of success.

Often the suppliers assume that they will lose more of these bids than they will win, and their commercial models reflect this.

And when they win, they can then sub-contract the work anyway.

Small and medium sized enterprises (SMEs) do not have a real hope of winning these tenders – as any long tender process is a huge burden, with a great deal of work without the prospect of any payment.

For SMEs to bid for such contracts routinely is impossible.

And the public sector bodies will not have any problem will this: there is a process to follow, and they have no costs pressures for the process to be any speedier or cheaper for anyone else.

Some public procurement exercises are conducted at the most leisurely of paces, without any thought for the commercial burden this places on potential suppliers.

The result is, in practice, a cosy, settled relationship, with the same small group of suppliers bidding for each high-value contract.

There will also be familiar faces: the same procurement professionals on both sides, meeting again and again, and then swapping sides as those with experience of purchasing for public authorities become valuable recruits for the suppliers.

There is, at least in my experience as a former government public procurement lawyer, a problem here.

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But it also can be said that the law of public procurement, like democracy, is the worst system, apart from all the others.

While the law of public procurement is over-prescriptive and uncommercial, a sudden abolition of the law of public procurement would create even more problems.

Without a law of public procurement, there would probably be even fewer tenders.

Settled incumbents would seek extensions and amendments, and officials would nod-along as this would be the path of last resistance.

For all its manifest faults, the law of public procurement does force public authorities to specify and openly advertise its requirements, and it ensures that the risk of a disappointed tenderer challenging a decision means that a process is followed as consistently and transparently as possible.

There is not even any legal requirement on public authorities to go for the lowest price, as it is open to set price against other factors for the most economically advantageous tender (or “MEAT” – yes, public procurement is a MEAT market).

Yes: at the margins, the approach promoted by Dominic Cummings, of appointing brilliant and charismatic project managers to hire and fire suppliers, could achieve some brilliant outcomes.

But for the mundane reality of the thousands of purchases public bodies make each day, there is the case that the law of public procurement ensures a bad situation is not as bad as it could otherwise be.

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So what can be done?

As a former central government public procurement lawyer (and I still practise in the area), there seems to me to two things which could be done to improve public procurement.

One before the public procurement exercise begins, and the other more-or-less comes afterwards.

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Before major procurements, there is a tendency of officials (and politicians) to over-specify and to set “bespoke” specifications (often called, without irony, “solutions”.

For major IT projects, for example, the specifications can seem like a flip chart of the inane “brainstorming” you get at one of those dire team “away days”.

(Shudder.)

The focus, of course, should be on commercially off-the-shelf products where possible, and on systems which have already been tried and tested.

For, believe it or not, public sector bodies are not the only large entities that procure complex works and services.

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And then we come to the contracts – the “terms and conditions”.

(Oh dear.)

Many of the supposed public procurement disasters – from PFI to superfluous aircraft carriers – are not directly down to the process followed but to the contracts signed at the end.

A contract, of course, is a legal instrument that regulates foreseeable risks for parties in a transaction.  

But for many major government suppliers the contract is not used to regulate risk but to eliminate it.

To make sure that the supplier gets the benefit of the contract price regardless of performance.

Hence the penalty payments, early cancellation fees, change control procedures, and so on.

What is distasteful about this is that government suppliers already have the happy benefit of the public bodies being reliable payers.

Public bodies rarely default on contract payments.

But government suppliers, and their lawyers, want more – and go through contracts seeking every possible amendment so as to free the supplier from any risk.

And they often get away with this for two reasons.

First, public bodies sometimes do not have access to experienced and skilled commercial lawyers capable of seeing the implications of often innocent-seeming provisions.

Such contract lawyers tend to work in the private sector.

Second, suppliers use what leverage they have – knowing that certain projects are politically driven and “too big to fail” – so as to insist on contractual protections.

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The law of public contracts and public procurement can be improved – and Cummings and others are right to highlight its many problems.

But more important than wiping away procedures (even if they are far too prescriptive) is more transparency and better legal advice.

This, of course, is anathema, to Cummings, who dislikes both lawyers and freedom of information.

Nonetheless, if public bodies were to publish all public contracts after they were let – and no cynical hiding behind “commercial confidentiality” – then suppliers would be less relaxed about going for one-sided contracts.

As this is about public money, and as suppliers get the benefit of reliable payment, there is no good reason for non-disclosure.

Public bodies should also be stricter as to the burdens that lengthy procurement exercises place on suppliers, so as to avoid SMEs being squeezed out by the conglomerates.

And public bodies should be under a positive obligation to set out publicly the worst case scenarios of contracts (penalty payments, early cancellation fees, change control procedures, and so on) before any contract is signed.

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As the UK leaves the EU, there is a case that the law of public procurement can be reformed.

The crucial principles of equal treatment and transparency need not be threatened by this.

Nonetheless, some public procurement regime will be required if the UK is serious about entering into post-Brexit international trade agreements – as access to lucrative UK public contracts are among the most valuable things the UK can offer in trade negotiations.

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The law of public procurement can be less detailed and prescriptive, as Cummings as others aver.

But this will not solve all the problems.

As I conclude in the FT piece, Cummings has not fully set out the specification of the problem, let alone procured a solution.

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