NHS Procurement and Subcontractor Exclusion — House of Commons, 2019-07-04
Topic: Mixed Topics
Stephen William Hammond (Conservative, Centre-right): It is a pleasure to respond, and I thank the hon. Member for Bury South (Mr Lewis) for securing this debate to highlight an issue about which he rightly feels very strongly, as it affects a company in his constituency The title of this debate highlights the two things the hon. Gentleman wants to raise. The first is the specific issue and, as I have some time, I will talk a little about procurement processes with subcontractors in general, too. He highlights an issue with a specific framework contract that, as he rightly says, is managed by my Department The specific issue the hon. Gentleman raises is on the use of subcontractors in the flooring industry under the construction framework ProCure22. The issue was originally raised through the Government public procurement review service, hosted by the Cabinet Office, back in December 2018. A response was provided by officials at the time and is on the Government website The hon. Gentleman asked a number of direct questions, which I will tackle later in my speech. I hope to satisfy him but, if not, I will, of course, be very happy to write to him The issue, as the hon. Gentleman says, is that one of the suppliers under the P22 framework is using three companies based in the European Union and that a supplier in his constituency is not being used. He is not seeking to suggest that suppliers be excluded for unlawful reasons, but he is suggesting that the supplier in his constituency has been excluded because there was not a fair competition. That is the essence of what he said On the competition question, the hon. Gentleman will know that my Department and the Cabinet Office provided a response saying that, although we have some influence over subcontractors under the ProCure22 framework, this only relates to certain tier 1 subcontractors that are primary supply chain members. They are required to pass a certain series of checks with the authority before they can be registered. Those checks are limited to organisations undertaking certain roles and do not extend to the suppliers of flooring products. The principal supply chain partners have been selected through an appropriate procurement process, in line with the Public Contracts Regulations 2015. Those companies are then free to build their own supply chains, which is where the company in the hon. Gentleman’s constituency is at odds. The company leading the supply chain is not always bound by public sector procurement regulations. I am obviously aware of the French authorities imposing a fine on the three companies at the end of 2017, and I want to address some of his remarks on that in a moment Officials in my Department have met supply chain partners on a regular basis, and we seek wherever possible to encourage the use of UK-based SME subcontractors. As the hon. Gentleman said, we have a duty to the public sector to deliver value for money. It is for our supply chain partners to demonstrate that that is the case with each of their products I think the hon. Gentleman is concerned that my Department has not replied to a letter from Halstead—the aggrieved company in question—of January this year. I can confirm that the Department received the letter from DWF lawyers, acting on Halstead’s behalf. The letter was addressed to me on 16 January, and my Department has a record of a reply being sent on 13 February, referring DWF to the response that had been published on the public procurement review service that I referred to earlier. If the hon. Gentleman does not have a copy of that reply, or if he finds when he speaks to Halstead that it does not have a copy or the lawyers have not passed it on, I will be happy to sort that out Officials in my Department have engaged with Halstead directly—that engagement started in March 2018—to explain how the framework operated. I hope that the company will be able to confirm to the hon. Gentleman that officials have responded fairly promptly to any questions that have been raised. I understand that Halstead has used that feedback and is currently bidding to form part of the supply chain. The hon. Gentleman asked a large number of very specific questions, and given that the House has a little bit of time tonight, I thought I might try to respond to them now rather than writing to him.