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Government’s position has consistently been that Ministers had no role in PPE procurement decisions. That, as we show below, is just not true. Good Law Project has evidence that Ministers – Cabinet Ministers – and a close adviser to the Prime Minister actively helped favoured bidders win PPE contracts.
The question is, why? Why did they go out of their way to help these middlemen?
The bare facts of what Good Law Project has learned about the Pharmaceuticals Direct contracts – two have so far been published, for £28.8m and £102.6m – are extraordinary. Matt Hancock’s position, as set out in legal documents provided to Good Law Project, is ‘nothing to see here’: his lawyers say that PDL made offers to supply PPE through the public portal.
But we hold documents showing or suggesting that:
Good Law Project has published – in a link at the bottom of this piece – the majority of those documents in a form redacted to hide the identities of junior civil servants or of our sources. The documents come from multiple sources.
Good Law Project also holds evidence – which we will publish shortly – that other Cabinet Ministers were helping Mr Jassal and Shergill through the contracting process.
On 27 March 2020 Surbjit Shergill wrote to the Prime Minister’s political adviser and Director of the Number 10 Policy Unit, Munira Mirza, at her personal Number 10 email address, and copied Mr Jassal:
“Thank you for your call and taking the time to speak with me,” he said. “We are keen to support the Party and the nation through this turbulent time.” His email offered her the chance to buy masks and ventilators and asked her to put him in touch with the relevant procurement personnel. Hours later he had a response from a senior civil servant, CS.
The email correspondence between the two continued. Mr Shergill thanked CS for speaking with “Munira” but on the morning of 30 March he wrote again to Ms Mirza, copying Mr Jassal, complaining “As per our discussion please see correspondence below but we have not heard back from anybody.” He congratulated her on the “fantastic job” Government was doing and thanked her for the assistance she had provided thus far “because I can see you have gone above and beyond for us in this situation.”
Eleven minutes later Ms Mirza replied in writing: “Thanks Surbjit, I’ve contacted them and hopefully they will respond.” Mr Shergill kept Ms Mirza informed of progress and was, the next day, contacted by EK who has described himself as a policy adviser to the Cabinet Office.
On 2 April, Mr Shergill again wrote to Ms Mirza:
And later that day he wrote to EK thanking him “for speaking with Munira” and attaching details of the stock they hold.
Priti Patel and the £28.8m contract
On 4 April, a civil servant at MOD sent an email to Samir Jassal saying he understood “your organisation may be in a position to help provide supplies, thank you for your offer of support”.
Hancock’s lawyers assert that the email responded to an offer of support submitted by PDL. However, the email does not name PDL – it refers to an unnamed “organisation”. Indeed, it is only later that Jassal introduced PDL as the person for whom he says he acts. We believe the facts point to Ms Mirza asking the civil servant to contact Mr Jassal.
Mr Jassal responded from his email address at samirjassal.co.uk introducing Mr Shergill and PDL and offering a range of PPE including KN95 masks.
Good Law Project holds no documents explaining what followed but on 19 April 2020 Mr Shergill was sent “documents in order for the purchase to be facilitated” and then an Order Form for almost £58m of PPE, mostly KN95 face masks, but with some goggles and face shields too. On 24 April PDL issued an invoice for 30% of a total order value of almost £69m of PPE and delivery, including VAT.
That contract was cancelled very late in the day – when a decision was made centrally to stop buying KN95 masks.
PDL was highly aggrieved about the “detrimental financial impact on the company” and on 1 May, Mr Shergill complained to the civil servants. He copied in EK (from the Cabinet Office who, it will be recalled, had been speaking to Ms Mirza about Mr Shergill and Mr Jassal) and Matt Hancock. More will follow on Mr Hancock at a later date.
Mr Shergill also emailed the Home Secretary, Priti Patel. He began by thanking her for speaking to Mr Jassal and ended with “I am so grateful for your intervention.”
Several days later Priti Patel wrote to Michael Gove – the Cabinet Office Minister – with reference to the face masks contract:
A series of further letters and emails between Mr Shergill and Priti Patel concluded, on 14 May 2020, with Mr Shergill writing to Priti Patel “as a result of your intervention, we are now in discussions to offer another product which may help to mitigate our losses”: that product was the “BYD Type IIR Fluid Resistant Surgical Mask”.
On 15 May, Priti Patel replied saying: “I understand your frustration with what has happened and also your desire to secure new contracts with the Government. The Cabinet Office is involved in cross-Government procurement and I have drawn t (sic) their attention your email and the products you can source. I have also forwarded the email to the Secretary of State for Transport for his Department to consider as well.”
Six days later, PDL signed a £28.8m contract for 60m IIR face masks at a price of 48p each. The contract, according to a letter Good Law Project has received from Government was for “BYD type IIR masks,” i.e. the same masks Mr Shergill had offered to Priti Patel days earlier.
The price paid was higher than Government’s internal benchmark price at the time according to leaked Government’s internal analysis, which shows a price closer to 42p. Each penny on 60m face masks represents a cost of £600,000 more to the taxpayer.
The £102.6m contract
The story doesn’t end there. PDL received (at least) one other contract – this time for £102.6m.
Lawyers for Matt Hancock say the process began when Mr Shergill emailed DHSC with a quotation for Meixin 2016V FFP3 facemasks on 26 June 2020. That quotation is said to have been emailed to DHSC by Mr Shergill with Mr Jassal following up with emails and phone calls.
However, they failed to provide any copies of those emails or any record of Mr Jassal’s phone calls or who they were with. You may wonder why.
What is indisputable is that it took a remarkably short period of time, only four days, for a recommendation to be tabled on 30 June to approve that £102.6m purchase at a price of £5.13 per mask.
The purchase was pushed through by the Cabinet Office despite concern about pricing from Health Department officials. An email from “Finance Operations” notes: “average price +25% is £3.36 including delivery charges. The price per unit is above our 25% tolerance” and another email notes “this is well above the average we are currently paying of £2.69 per unit… the unit price for this deal look[s] too expensive even in these circumstances. Can you please explore further price reductions and/or justify to the AO why the price here is so much higher than the most recent deal?”
The price difference between buying 20m masks at £5.13 per mask and at £2.69 per mask is about £50m.
The questions raised by “Finance Operations” are good ones.
Good Law Project holds correspondence between DHSC and an alternative supplier offering to supply exactly the same face masks in materially identical quantities at exactly the same time. That alternative supplier was sent an order form by DHSC for those face masks but was told on 2 July – before the PDL deal had been signed off – that DHSC had sourced the supply it needed from someone else: “as of last night we are no longer looking to purchase MX2016v FFP3 models” and “DHSC now has sufficient supply arrangements in place to meet requirements over the coming months”.
That was on 2 July. Contrast it with what the Accounting Officer (the ultimate decision maker) was told four days later on 6 July. He was told there was a desperate shortage of the very same masks: “there was a current acute shortfall” and “stock-out is anticipated at mid-July”.
The Accounting Officer was not told of the existence of the alternative supplier. And nor was the alternative supplier asked to beat the price the Cabinet Office was pushing to be paid to PDL.
The alternative supplier complained vigorously to DHSC that, as soon as the MX2016vs it was offering passed NHS technical triage, the manufacturer received an alternative approach for the same product from an unnamed different UK company. Technical triage was passed just a few days before Mr Shergill supposedly emailed his quotation on 26 June.
The evidence suggests – and Good Law Project holds other examples too – that insiders in the process were keeping an eye out for bidders whose product had passed technical triage. Details of ‘their’ contracts were passed by those insiders to those with political connections who went on to win the contracts.
It’s a bit like having a friend at the National Lottery who tells you where to go to buy the winning scratch card tickets.
Good Law Project holds evidence that Surbjit Shergill charged PDL £16.37m plus VAT for his services.
In the second half of 2020, invoices totalling that sum were raised by “Dymon Cap Limited/Surb Shergill” for payment by PDL.
Dymon Cap Limited only had one officer, Mr Shergill, and was wholly owned by another company called Brooklands Investment Group Limited. Brooklands only officer, too, was Surbjit Shergill. And the people with ‘significant control’ were Surbjit Shergill and Gurleen Kaur Shergill, both at the same address. We can see from records filed at Companies House that its assets climbed from £200 in March 2020 to £9.9m in February of this year.
One possible or probable explanation for its extraordinary change in fortunes – and the lack of any change in the fortunes of Dymon Cap – is that certain of the sums received by Dymon Cap were hived up to Brooklands.
The timing of the invoices – along with other emails that Good Law Project plans to release in due course – suggests Mr Shergill may have done further lobbying for PDL. We do not believe the invoices relate exclusively to the contract for FFP3 face masks.
Responding, a Number 10 spokesman said:
“These allegations of an improper intervention in the procurement process are false. All PPE contracts were awarded through official procurement channels and followed the usual procurement process.”
A Cabinet Office spokesperson said:
“Ministers have no involvement in deciding who is awarded contracts. Decisions on whether a contract is awarded ultimately sits with the Department’s accounting officer once the offer had cleared seven previous checks including clinical acceptability and financial due diligence. We take these checks very seriously.”
A spokesman for Priti Patel said:
“The Home Secretary rightly followed up representations made to her about the vital supply of PPE. During a time of national crisis failure to do so would have been a dereliction of duty. Ministers have no involvement in the procurement process.”
PDL pointed out, fairly, that it is part of a group with experience supplying face masks. It says that Mr Shergill was “an independent contractor” which it engaged “on a wholly contingent, success basis” which it says is a “common industry standard.” It says that it has “no contractual or financial relationship with Mr Jassal” who it understands to have been engaged by Mr Shergill.
Neither Mr Jassal or Mr Shergill could be contacted for comment.
There is more to come
Buried in the papers Government has so far handed over is a revealing line. The civil servants have identified the MX2016v. But instead of buying it from the factory they decide – for reasons which are not identified – to “select an intermediary” to buy it.
Why did Government buy via intermediaries rather than directly from factories? It meant (often vast) profits to those lucky enough to be chosen. And it meant we swapped the ‘covenant’ – the ability to get your money back if the product was faulty – of a large Chinese factory for the covenant of a UK company with (very often) no real assets at all.
But buying via intermediaries – and Good Law Project has other evidence that this was how PPE was sourced – had other, more sinister problems, too.
If the product you were getting was the same, and all you were really doing was selecting who to buy it from, you created a world in which political connections mattered. Well connected fixers could charge a fortune to put your name in front of the decision maker. Decision makers could deliver fortunes by choosing the right intermediary. And fixers were incentivised to influence the decision makers.
But don’t take it from me. The Government’s own Counter Fraud Function has said there was a high risk of fraud in the procurement of PPE.
We have no evidence of criminality. But we certainly have questions. Why did Munira Mirza, Priti Patel and others bend over backwards to help Samir Jassal and Surbjit Shergill win contracts for PDL? What was in it for them?
Good Law Project holds evidence – which we will publish shortly – that Jassal and Shergill got help from another Cabinet Minister. And the evidence is that the services Shergill and, indirectly, Jassal provided to PDL went beyond these published contracts.
You can contribute to the costs of our judicial review of the Government’s decision to award these contracts here.
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