NHS Procurement and Subcontractor Exclusion — House of Commons, 2019-07-04
Topic: Domestic Commerce
Stephen William Hammond (Conservative, Centre-right): As I said earlier in my remarks, each principal supply chain partner must make sure that their internal policies and procedures align with the requirements of the framework, but it is not for the Department to tell each principal supply partner how to set out their criteria, nor the specific processes they should use. The hon. Gentleman rightly made the point that is my Department’s responsibility to ensure that the policy is correct. I hope he is hearing that my Department ensures that the right procedures and processes are in place and that the individual principal supply chain partner must choose the most appropriate one for the right framework it is on. I hope he will accept that I was just about to refer to the issue of the three overseas companies that were chosen and the sanctions that were imposed on them. As I said earlier, I am aware that the French authorities imposed the fine on the three companies at the end of 2017, but those convictions were imposed after the preferred supplier list was established. Clearly, the Department does not have sight of the contractual agreements between the supply chain partners and the suppliers. The supply chain partners are not within the scope of the Public Contract Regulations 2015 The hon. Gentleman asked whether I could assure him that Kier would be instructed to add Halstead to the list as a matter of urgency. He will know, obviously, that it is not within my remit or my ability to instruct private sector organisations to engage with specific companies, but I can reassure him that Halstead is currently bidding as part of the refresh of the Kier supplier list and its application will, I know, be scored on the merit of the criteria set. I hope that that reassures him. I want to turn briefly to how the Department supports and encourages small and medium-sized enterprises and subcontractors more generally. Clearly, we have been dealing with some very specific issues, and that underlines the complexity of the procurement landscape. The understanding of who exactly subcontractors are, and the work that they undertake, is, by its very nature, not well understood unless it is for a very major significant construction project. NHS organisations would usually expect the Crown Commercial Service or the regional procurement solution to identify and track the supply chain of the suppliers providing the goods, works or services. However, there is currently a limited understanding of the suppliers on locally negotiated contracts The Public Contract Regulations 2015 clearly allow public sector organisations to permit subcontracting within supply chains as long as the subcontractors meet the minimum standards set out, and the hon. Gentleman knows that I have just set those out. Where issues in subcontractor performance arise, the regulations also allow for the subcontractor to be excluded The Department’s SME action plan for 2019-20 highlights the actions that we are taking to make it easier for SMEs to work with the whole of the health supply system. The Department has a target of 23% of our direct and indirect spend with SMEs by the end of March 2022.