Written evidence submitted by Management of PPE Contracts
Tecman is an advanced manufacturing and engineering firm based in Royal Leamington Spa, founded in 2014. It is a leading manufacturer and converter of advanced materials and employs more than 20 highly skilled staff. The company works across several sectors including automotive, energy, electronics and aerospace.
In May 2020, when the UK Government faced significant issues with PPE procurement, Tecman set up a separate company, Tecman Advanced Healthcare Products, to manufacture and distribute sustainable PPE within the UK and meet this emergency demand. Every product is designed, manufactured and shipped from Tecman’s West Midlands HQ, providing short supply chains and responsive post-sales support.
Reason for contributing to this Inquiry
Tecman is archetypal of a small but innovative SME that sought to play a part in the national effort to produce the products and devices needed by the NHS at a time of crisis. The company’s working assumption was that if high quality, fully certified, cost-effective PPE products could be made in the UK and promptly shipped to NHS organisations to solve supply issues, the Department for Health and Social Care (DHSC) would seek to negotiate contracts at speed to match a problem with an immediate solution.
Tecman’s experience did not validate this assumption. The reason for submitting evidence to this Public Accounts Committee (PAC) Inquiry is to highlight to the Committee examples of how the procurement process and contract management by DHSC failed to work effectively at a time of crisis, in the hope that this experience sheds light on some of the issues being examined by the Committee and that measures can be put in place to prevent the errors highlighted in the Committee’s Call for Evidence from happening again.
Tecman’s offer of help to DHSC
Tecman attempted to supply DHSC with reusable face shields, following media reports of shortages of supply and public announcements of the extraordinary demand within the NHS.
In May 2020 Tecman had several conversations with the DHSC team working on the UK Make route about PPE production capacity, as the Department sought to secure supply. On Friday 5 June Tecman had a commercial meeting with representatives from DHSC, NHS England and Deloitte, at which current capacity of around 750,000 units per week and the ability to ramp up production was discussed. DHSC officials pushed Tecman to reconsider total capacity and deliver as much as possible in June and July because of the shortage.
Tecman spent the following 48 hours working on a plan to ramp up production to meet the huge demand. By liaising with suppliers and partners around the clock, a plan was drawn up to ramp-up production to deliver 1.5 million units of PPE a week by July. A total of 68 million units was committed to be delivered from Tecman’s UK manufacturing facility by September. DHSC immediately agreed to fast track a contract and purchase order for the 68 million units.
On Monday 8 June, DHSC confirmed the final quantity to be ordered was being clarified. On Tuesday 9 June DHSC sent Tecman two emails apologising for the delay in putting a contract in place and reassuring the company that it was being fast tracked. On Wednesday 10 June a representative of DHSC called Tecman to inform them there was no need for any PPE as they had secured enough from international sources.
Incompetent contract management meant that DHSC wasted significant time negotiating with a UK supplier on favourable terms, only to then decide to procure internationally from various sources, many of which have since emerged to have shipped faulty, non-compliant PPE.
Tecman raised concerns with Warwick and Leamington Member of Parliament, Matt Western MP, who submitted a written question (UIN 76845) on 20 July, to which the Minister replied that the Department had a robust process to ensure which quality products met commercial due diligence. This process has since transpired to have been ineffective.
The DHSC approach to procurement and contract management
The juxtaposition of the national PPE emergency with an uncoordinated response from DHSC was both surprising and alarming. To meet the scale of demand for PPE and to support the national effort many companies were making, Tecman made significant capital investment in new machinery in anticipation that a high quality, globally competitive British manufacturer would be an ideal NHS supplier. The way DHSC managed offers of help, as well as PPE negotiations and contracts, meant Tecman was forced to explore alternative customers outside of the UK in order to keep the business viable.
Tecman has since gone on to achieve significant export success, both directly and through distributors. These international orders are testament to the fact that Tecman face shields are extremely price competitive, despite their outstanding sustainability credentials and being UK made.
Chaotic contract management by DHSC meant these easy wins were missed despite Tecman’s approaches, resulting in PPE manufactured in Warwickshire being shipped out of the UK to international customers, at a time when the UK was in desperate need.
In a national emergency, DHSC could be forgiven for negotiating less than competitive contracts with a range of suppliers, but for the Department to agree to international contracts that entailed long supply chains or astronomical shipping fees while not engaging with others, even when faulty PPE was being discovered, raises serious questions that the Committee will no doubt explore when it questions officials on 20 April.
Management of PPE supply and quality
Despite DHSC not receiving some of the goods it had ordered from other suppliers and receiving some goods that were not up to standard, Tecman received no request for PPE supplies and no further enquiry as to capacity or product specification. This is important to point out to the Committee because it meant that while NHS staff were not receiving the PPE items they needed to work safely, previously identified UK firms with PPE capacity were not engaged to remedy this problem.
Unfortunately, the attitude to contract management and procurement has not changed now that the emergency phase of the pandemic has passed. Tecman are still in contact with the DHSC about reusable face shield options, but there seems to be no additional weighting given to sustainability or domestic supply, despite the discovery of unreputable suppliers and of senior Departmental and political discussion of the importance of a net-zero NHS and domestic supply chain security.
Significant staff turnover within DHSC has also had a negative impact. Joint projects were not handed over correctly and no progress is being made on several sustainability trials. This is a specific example unique to Tecman but speaks volumes about the efficiency and effectiveness of project management within the Department vis-à-vis PPE.
The Department has ordered PPE from UK based manufacturers as well as international suppliers – that is not in question. However, the Department’s haphazard approach to the contract management and procurement process, as illustrated in the previous examples, highlights several significant problems likely to have impacted many firms.
The UK went through a period of failing to source enough PPE that met a defined quality standard. These failings were in part due to inefficient contract management that meant that some sources of supply were not exploited effectively. Poor internal coordination and the failure to prioritise domestic supply over international supply meant that situations involving lengthy delivery times, increasing storage costs and unsuitable products could have been mitigated.
Now that the supply emergency has abated, the Department has still not adjusted its procurement and contract management approach and is failing to ensure the PPE it does procure meets other priorities like sustainability. Tecman has found officials to be underinformed on issues like recyclability and there to be a lack of strategy within the Department for how to manage different sources of PPE effectively.
Tecman hopes that by shining a light on situations like those listed in this submission, the PAC will be able to help improve the way the Department manages its relationships with suppliers and avoid the costly mistakes that the National Audit Office report has already identified.