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How the Government sourced PPE - an inside view

(19 Posts)
YouShouldKnow Wed 12-Aug-20 15:49:13

If you've been horrified by how PPE contracts were awarded, by the sheer waste of public money and the croneyism that has diverted funds from where they were most needed into the pockets of the wealthy, please take a moment to read the following. It could have been so different. People tried to help. The UK could have been at the head of the queue and had the most favourable prices. They chose instead to award contracts to inexperienced companies and their friends and advisors. You have every right to be angry. It's worse than you thought.

That the UK was woefully ill prepared to provide PPE to NHS staff and Key Workers during the pandemic is in itself a national shame. With the details that are now coming to light about how contracts were awarded, who benefited and how those contracts have been fulfilled, it is elevated to the level of monumental scandal.

Based on what is now known about stockpiles of unusable masks, contracts awarded to governments advisers and the sheer waste of money and resources, opposition MPs are calling for inquiries, campaigners are asking for accountability and legal challenges have been launched. This response is, in part, based on guesswork and supposition given the lack of transparency in how these emergency orders were effected. The reality is even worse than feared.

The vast majority of the world’s PPE is manufactured in China where I have lived and worked for the past decade. Images of NHS workers in makeshift masks and wearing bin liners in a desperate attempt to protect themselves were truly distressing. We have very personal reasons to be thankful to the NHS – it’s the one time when saying “they saved my life” is not an exaggeration. We had time on our hands, extensive local knowledge and a wide-ranging network of friends and connections that we could call on to assist, so we decided to take action.

My daughter and I spearheaded an effort utilizing China based trading companies with export licenses and experience of customs documentation, procurement agents and shipping companies (who generously offered to ship PPE for free) and we mobilized an army of our staff and friends to hit the phones and track down production capacity and pricing on the items that were needed. Armed with good intentions, we amassed a considerable skill set of experienced business professionals ready to put their skills to use. Moreover, and importantly, we were on the ground in China (which closed its borders to foreigners on March 23rd) so we were able to negotiate in Mandarin and in person.

The situation in the early months, March and April, was difficult but not impossible – certainly not impossible if you spoke Mandarin and actually knew what you were doing! There were horror stories during the earliest weeks of the pandemic but the Chinese government swiftly enacted laws to close down the new rogue factories that had sprung up, to ensure that only genuine shipments were passed through customs, and verify both the certification status of local suppliers and the companies that were importing to other jurisdictions. From April onwards, given the laws passed here, the phrase Let the Buyer Beware was never more appropriate – if anyone was burned on a contract, it was due to their own inexperience, greed or stupidity.

We found factories making certified products with established reputations, who had production capacity and who were, in line with government orders, offering detailed production schedules and, relative to circumstances, reasonable prices. We verified each one and negotiated delivery times and price and then armed with this information, we began to contact the UK: direct emails to the Cabinet, the department of Health, Education, Transport, NHS management, Science Advisors, Health Trusts, care homes – anyone who might be in need of PPE and was finding it difficult to source. We offered:

•Factory Prices – we viewed this as a humanitarian effort not a profit making scheme
•Constant monitoring and renegotiating of prices as they were changing daily
•Quality Assurance – we had staff who were used to over-seeing factory production in all of the major manufacturing bases
•Pre-Shipping checks through a bonded warehouse – we could check the orders before any payments were made to the factories
•Customs Documentation and Clearance – getting shipments through the ports remains to date a bureaucratic process subject to delays
•Free Shipping – one of the major shipping companies offered to donate free transport and shipping to hospitals and medical personnel.
•ON THE GROUND SUPPORT – China has been closed to foreigners since March 23rd. We were here, able to inspect factories and visit customs offices personally
•Our services would cost NOTHING –

And we heard NOTHING…

The only direct response we had was a call from a lovely lady from the NHS (Slough from the phone number) who had been tasked with making calls. She was clearly overwhelmed, exhausted and entirely frustrated with having been tasked to call numbers in Asia. She seemed relieved to find someone with whom to speak English and my daughter and I spent a while telling her our story and how we wanted to help. We repeated our offer to put our resources at her disposal – to use our local knowledge to source direct from factories at local prices. We also added that if she needed help, she could call or email us and we could make the calls for her, given the language barrier and time difference. We had contacts all over China who could help her. She was genuinely grateful and thankful and said how much of a difference this could make – given that her colleagues were still waiting for supplies.

And again, we heard NOTHING…

In retrospect, it seems very clear that the government set up procurement websites in order to appear to be operating fairly and with transparency. It now seems that contracts were awarded for many reasons but fiscal responsibility and transparency never came into the equation.

The failure to understand the situation on the ground here has led to some disastrous decisions. If the government had been aware of the regularly changing requirements and daily changing pricing, they would NEVER have awarded contracts for a year. Firstly, companies that offered production from new manufacturers in March, would be entirely unable to fulfill those contracts on the basis offered from April once the Ministry of Commerce finalized their new policies.

Prices changed DAILY – this was Wall Street not Walmart! In April/May there was a buying frenzy and N95/KN95 masks were available from the factories at $1.45 to $2.10 (approx. £1.10 to £1.60 at current exchange rates) By the end of May, early June this was tumbling to around $1.20 (92p). Today those same masks are available for less than 60 cents (46p).

Last month, Nitrile medical grade gloves were c. $9 per box of 100 (£6.90). Today they are less than £5. Are the government locked into yearlong contracts at the top end of the market pricing???

The Good Law Project which currently suing the government for its mismanagement quote a statement from the government (Liz Truss’s department). The government denies that surgical masks were available from 39p to 46p at the height of the bidding frenzy and insists that the prevailing market price was 64p.

THIS IS CATEGORICALLY UNTRUE: FACTORIES were selling IIR 3 ply surgical masks with full CE and FDA certification at this point for 35 cents (27p) for medical grade and 27 cents (21p) for civilian use at the height of the pandemic. I have dozens of price quotations to prove it.

These same masks are now available at over 10 cents per unit less.

Are the Government/PHE locked into contracts with fixed pricing? Fixed at the point of highest demand and lowest supply? Will there be a downward movement now that prices are falling?

An interesting point to note, is that anyone familiar with China’s export regulations and the Ministry of Commerce announcements during March and April, would know that a Hedge Fund, a Confectionary Company and a Pest Control Firm, would not legally have been able to export PPE from China. Only companies with a history in the industry and importers with a verified end-user (ie not for re-sale) objective were actually permitted to export. Those regulations remain in force. That being the case, how are these contracts being fulfilled and is the hedge fund simply taking a cut for sitting in the middle???

Who is vetting the factories with whom these companies made hasty deals?
Moreover, who funded the 30-50% deposits that factories require to commence production. Certainly the Pest control and confectionary companies seem to lack the resources to do so, as did Andrew Mills Prosper Mills Company. So again, if the government were bearing the full weight of payment and liability, what were these middlemen actually doing to earn their very large share?

The UK government funds trade missions in China, but the consulates have not been staffed since March. Even the Embassy in Beijing maintains only a skeleton staff and calls are diverted to the FCO. Could those staff not have made a phone call or two? Surely they would have the experience and language skills to understand the situation and procure PPE. We offered to do it for free – to put our own resources and staff at the government’s disposal and source PPE at factory prices. Our offer was not even acknowledged. Could that be because, having removed the element of profiteering from the equation, no one in a position of power or influence could actually gain financially from the transaction? Scammers, opportunists the most corrupt have all sought to profit from this pandemic. We’ve encountered horror stories and seen the worst in people. We’ve also seen kindness, humanity and people genuinely motivated to help. Where does the UK Government’s handling of the billions of pounds of taxpayer resources fit into that scale? We may never know given that they have broken their own rules regarding publishing contracts and awards, preferring to keep the details hidden.

It’s a question that needs to be answered as a matter of urgency and national interest.

OP’s posts: |
Barbie222 Wed 12-Aug-20 16:03:54

It's a fucking disgrace, and I've already supported the crowdfund for the Good Law Project. Did you apply through the procurement website? I hope this topples Johnson in the end.

YouShouldKnow Wed 12-Aug-20 16:22:44

We tried everything to get attention - the procurement website, which was a joke - but also sent hundreds of personal emails direct to cabinet ministers and department heads. I explained why we owed the NHS a huge debt and why we genuinely wanted to help.

Good for you for supporting Good Law. They, EveryDoctor and a few brave journalists are the only ones trying to hold these people to account.

I know exactly what factories were actually charging for masks, gloves and gowns on which dates and none of this adds up. Hundreds of millions if not billions have either disappeared or been wasted.
The government's own rules state that details of contracts and awards should be published. They're keeping these hidden. Wonder why???

OP’s posts: |
IloveJKRowling Wed 12-Aug-20 16:51:59

Thanks for posting you

There should be more about this in the media in general.

goodlawproject.org/news/the-ppe-fiasco/

IloveJKRowling Wed 12-Aug-20 16:57:35

An interesting point to note, is that anyone familiar with China’s export regulations and the Ministry of Commerce announcements during March and April, would know that a Hedge Fund, a Confectionary Company and a Pest Control Firm, would not legally have been able to export PPE from China. Only companies with a history in the industry and importers with a verified end-user (ie not for re-sale) objective were actually permitted to export. Those regulations remain in force. That being the case, how are these contracts being fulfilled and is the hedge fund simply taking a cut for sitting in the middle???

This is interesting / horrifying.

How on earth can anyone in government have thought these companies could deliver? Either incompetence on a grand scale (and people should lose their jobs) or a deliberate attempt to transfer money from state to private hands (i.e. stealing from the taxpayers ).

Raphael77 Wed 12-Aug-20 19:02:56

OMW - the depth of this corruption is mind-boggling. The poor nurses and care workers who were desperate during the very worst of the lock-down was heartbreaking enough but knowing that there were people like yourself working tirelessly to provide solutions and that you were ignored by so many just makes me angry.
I completely understand that there are processes and procedures that need to be adhered to for the supply of medical related items but to know that random companies were being awarded contracts, who had no previous exposure to the HC sector is just bonkers!
The question is now- how do we expose this wider?
Do you still have these connections? Is there a way that you/we can assist in getting these supplies to the front-lines of countries who would actually appreciate them? Not sure how NGO's operate but of anybody has a contact, perhaps some good could come out of your incredible work.

MyPersona Wed 12-Aug-20 19:11:35

the depth of this corruption is mind-boggling. The poor nurses and care workers who were desperate during the very worst of the lock-down was heartbreaking enough but knowing that there were people like yourself working tirelessly to provide solutions and that you were ignored by so many just makes me angry.

These serious allegations of corruption are being made anonymously on a forum. No one reading knows who this OP is or what their agenda is.

@YouShouldKnowif you have something to say why don’t you go to the press and take ownership of your accusations?

Clavinova Wed 12-Aug-20 19:58:03

From April onwards, given the laws passed here, the phrase Let the Buyer Beware was never more appropriate–if anyone was burned on a contract, it was due to their own inexperience, greed or stupidity.

I thought the European Commission was rumoured to have skilled negotiators;

14 May 2020
"European Commission says legal action would be taken if needed after Poland and the Netherlands complain about quality."

"The European Commission said on Thursday it has suspended the delivery of 10 million Chinese masks to member states and the United Kingdom after two countries complained about the poor quality of the batches they received" ...

"The whole stock of masks was purchased from a Chinese provider via an EU fund. It was set to be distributed in weekly instalments over six weeks."

www.aljazeera.com/news/2020/05/europe-halts-delivery-10-million-poor-quality-chinese-masks-200514132353534.html

lljkk Wed 12-Aug-20 20:05:34

How to reconcile OP's story with the global shortage of PPE in March-June 2020. Is OP saying that EVERY country was corrupt giving illusion that there was a PPE shortage?

Barbie222 Wed 12-Aug-20 20:24:23

These serious allegations of corruption are being made anonymously on a forum. No one reading knows who this OP is or what their agenda is.

They are currently going through the courts and the documents are freely available on the good law project link up thread. The Guardian has run an opinion piece on this too.

Leaving the quality issue aside, it does rather seem as though a few hastily- assembled companies thought that they could be the middlemen and make a few quid here.

The procurements were made under Gove's department and he's had previous form for this kind of thing, it seems.

https://www.theguardian.com/commentisfree/2020/jul/15/coronavirus-contracts-government-transparency-pandemic

MRex Wed 12-Aug-20 20:25:32

There were a great many quality issues, stock gaps and pricing issues at the time. There is also a 5-7 week delivery time from China unless there are special flights, which limit the amount on delivery, so goods ordered in Marchwould fix an issue in early May (then add extra manufacturing time, because that always occurs). OP claims to have wanted to be a middleman, based in China, who had no existing NHS contracts and no experience of the quality standards required. I'm sure there were plenty of mistakes made by NHS procurement, and there have been loads made, but hiring OP would certainly have been another.

**The UK government funds trade missions in China, but the consulates have not been staffed since March. Even the Embassy in Beijing maintains only a skeleton staff and calls are diverted to the FCO.

Very unusual comment for someone who doesn't work for the Chinese government to make.

YouShouldKnow Wed 12-Aug-20 20:48:06

Debate is healthy, as is questioning motivation and agenda. My post details my own personal experiences and the questions that these have raised. Over the past few months I have amassed hundreds of price quotations from countless factories here and so can confidently state that quoting 64p for an IIR 3 ply surgical mask is incorrect. At that time the average quotation was 32-35 US cents FOB ex Shenzhen.

The medical groups, legal professionals and journalists who are currently investigating the award of contracts are doing so largely in the dark, given that the government are, contrary to their own guidelines, not revealing details of these accounts. They are also hindered by not knowing what factories were actually charging at various points over these months. If anyone needs that information, I am more than happy to share what I have.

Regarding defective PPE in Europe in May, this is precisely why the Chinese Government enacted the strict controls that it put in place at the end of March and early April. Shipping time to Europe is c. 30 days on the water under normal conditions with an additional 1-2 weeks for clearance at the ports. (The backlog has meant lengthy waiting times as customs accommodated new legislation and documentation prices).
Allow 15-30 days for production time, depending on the quantity in question and those consignments must have been ordered in March at the height of the frenzy.

There were horror stories. I have friends in the US who received a consignment of "masks" - to find containers full of old halloween masks. I have another friend who purchased from a factory, only to have a scammer intercept the shipment having spoofed a courier company website and decorated a truck with the company livery. Garment factories were quickly retrofitted to produce masks and CE/FDA certification was faked. This is precisely why the government swiftly enacted legislation to limit exports only to companies with a Chinese Medical License and verified certification for the country of destination.
All in all the situation has improved as a result, and shipments are moving out of the country. But without experience of how to achieve this, due diligence, quality assurance and customs clearance experience, it's always going to be a lottery at best.

This is precisely why people are now looking at how contracts were awarded and asking pertinent questions about how and why certain decisions were made. The government already had an established PPE supply chain and many of these companies have complained that they were completely over-looked in favour of new and seemingly inexperienced suppliers - a hedge fund, a confectioner and a pest control firm among them. Under the circumstances, asking why seems eminently reasonable.

OP’s posts: |
KenDodd Wed 12-Aug-20 21:03:56

I think you're on a losing team expecting the electorate to be angry about this OP.
Over the last few years the scales have fallen from my eyes, there is NOTHING Boris and co can do to turn his Brexit supporters against him. It seems even killing your relatives doesn't lose him the support of his voters, BJ and Cummings know this, they know they can do what they want consequence free.

underneaththeash Wed 12-Aug-20 21:05:27

OP - yes that was realised quite early on and the DOH took over PPE purchasing directly rather than individual CCGs.

YouShouldKnow Wed 12-Aug-20 21:06:55

@MRex, not sure why you would assume that I work for the Chinese government - the consulates here are closed. The Embassy in Beijing has a skeleton staff and their calls are mostly diverted to the FCO in the UK. The point was, they have staff experienced in China, who would know how to process customs documentation and would be able to negotiate production schedules and pricing and most importantly speak Mandarin. That was what was really needed at the time if they seriously wanted to source and successfully export PPE. It seems strange that those resources were not mobilised, just as it seems equally strange that established suppliers were not considered for contracts.

As the border has been largely closed to non-Nationals from March 23rd, we realised that skills and experience on the ground here could actually make a difference to how quickly and cheaply PPE could be sourced and guided through customs. We tried to help - no good deed, eh?

OP’s posts: |
Clavinova Wed 12-Aug-20 21:33:00

a Pest Control Firm, would not legally have been able to export PPE from China.

The pest control company, Pestfix, is named by the Good Law Project in the link. I've just looked at their twitter account - to a lay person they have quite an impressive side-line in PPE procurement, as well as co-ordinating PPE donations to care homes and other front line services. For example:

May 13 -
...we are excited to have millions of nitrile gloves arrive in our warehouse. If you need any then please call the team!

May 1 -
*UPDATE *
Masks manufactured and either in stock or in transit to our warehouse.
300,000 medical #masks and 1,000,000 #type11R and 150,000 #FFP3

Apr 30 -
People are hiking #mask prices and giving excessive lead times.
PestFix have shipped 2,000,000 to NHS and front line #keyworkers
We have 1,000,000 TYPE11R arriving by 07/05 will maintain our price, no inflation.

April 9 -
Details of our current medical PPE products and their EU Conformity Data...

April 8 -
We've a plane booked and can deliver stock next week.
GC111 Surgical Face 3 Ply
GC112 FFP2 Respirator EN149:2001≥ 95% BFE
GC113 FFP3 Respirator EN149:2001 ≥ 98% BFE
Respirators also in Fluid Resistant variants
#ffp2 #ffp3 #mask #respirator

April 6 -
We are chartering flights specifically to keep up with the demand for facemasks FFP2, FFP2-R, FFP3 & FFP3-R

April 1-
5000 x FFP2 N95 Surgical Face Mask - Ear Loop - 50 Pack
5000 x FFP3 Respirator Mask Disposable - Single Use CE MDD 9342EEC EN 14683+2005
Please email pestfix.co.uk for bulk order masks.

March 24 -
In demand products arriving in stock:
P2 Surgical Masks
N95 Charcoal Masks...

SpeedofaSloth Wed 12-Aug-20 21:36:08

www.hse.gov.uk/safetybulletins/use-of-face-masks-designated-kn95.htm

So how can we interpret your post in the context of this statement? I am curious.

Clavinova Wed 12-Aug-20 21:40:48

just as it seems equally strange that established suppliers were not considered for contracts.

6th March;
"French protective mask manufacturer scraps NHS order to keep masks in France."

"[The French Government] has forced a face mask manufacturer to cancel a major UK order as the coronavirus-inspired scramble for protective gear intensifies."

"The National Health Service ordered millions of masks from Valmy SAS near Lyon earlier this year as COVID-19 threatened."

"We are facing a big problem: who to prioritise" explained company director Nicolas Brillat."The requisition does not allow any wiggle room for us to deliver to the NHS, but it is complicated because the NHS was the first client to order and uses our masks all year long."

www.euronews.com/2020/03/06/coronavirus-french-protective-mask-manufacturer-scraps-nhs-order-to-keep-masks-in-france

StormzyinaTCup Wed 12-Aug-20 22:00:18

www.theguardian.com/world/2020/jul/20/revealed-nhs-denied-ppe-at-height-of-covid-19-as-supplies-sent-to-china-coronavirus

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