Head of NHS Wales “misinterpreted procurement law to let convicted firms be part of £885m hospital contract

Martin Shipton

Campaigning doctors have accused the CEO of NHS Wales of misinterpreting procurement law by allowing two construction firms with criminal convictions to build an £885m cancer centre.

The Colocate Velindre group, run by two doctors, argues that it makes no sense to build a standalone centre in Cardiff, instead saying it should be adjacent to a district general hospital.

In addition, the group has raised serious concerns about the inclusion in the Acorn consortium, due to build New Velindre, of two firms convicted of bid rigging – a crime where firms bidding for a contract collude with each other to fix the contract’s price. They say that under procurement law, Spanish firm Sacyr and Japanese firm Kajima should be excluded from the consortium.

NHS Wales CEO

In a letter to Mark Isherwood MS, chair of the Senedd’s Public Accounts and Public Administration Committee, NHS Wales CEO Judith Paget wrote: “[Both] companies are still engaged in their respective legal cases. [Former Plaid Cymru leader Adam] Price stated that the Kajima case had reached sentencing in March 2023, and that the case has ended. Having checked further, we can confirm that this is not the case, as proceedings were escalated to the Supreme Court in Japan, and as of Monday May 13, a hearing date has still not been set.

“Similarly, the Sacyr case is still in appeal, and a suspension on all sanctions is still in place … Both organisations have undertaken to inform Velindre University Trust of any changes in these legal cases.”

But doctors Roy Kearsley and Penny Owen of Colocate Velindre have written a rebuttal of Ms Paget’s argument, saying it is clear that the two firms should not be participating in the project.

Their rebuttal, sent to Mr Isherwood, states: “The customary UK pattern for exclusions from procurement is well established and there is a stubborn resistance to it evident in the CEO’s letter.

“At Pre Qualification Questionnaire (PQQ) stage the supplier has to answer truthfully whether it has had a conviction for offences and, if it has, it is excluded. This question is not a mere formality or dead letter. What these offences are, as agreed by everyone, are relevant to Kajima and Sacyr. They are serious.

“In both their cases, as we’ve shown for many months, the questionnaire answer about having had a recent conviction should have been answered yes, not no, by the two Acorn companies. They are consequently in a scenario where they should have been precluded from tendering, unless they could further show at tendering itself that they’d already undergone ‘self-cleansing’ or, to put it another way, the rule is that they are out until they can get themselves back in.

“Either by a favourable appeal (usually too long to wait for) or by ‘self-cleansing’, presented at the PQQ stage. They are ineligible for the contract if they did not do this self-cleansing. Doubly ineligible for giving misinformation in the questionnaire.

“The CEO has doubled down on contradicting what was said by her deputy on May 8 2024 and returned to her earlier stance in May 2023. What she, Velindre (and the suppliers?) are doing is turning the usual practice inside out and claiming Kajima and Sacyr are in until they get put out, conveniently, by a long slow appeal court. Convicted, yet still somehow innocent until found guilty over and over.

“Extraordinarily, these companies have managed to pass themselves off as still innocent for the purpose of procurement. Many felons will admire that achievement.

“Also, to match the CEO’s claims, the questionnaire should have asked: Have you had all your appeals turned down all the way to the appeals court? But it asked no such thing. It asked if they had been convicted at the completion of a valid trial. And, with respect, the CEO’s case seems to rest on an amateurish handling of the words ‘final judgement’. So, somehow, Velindre and the Welsh Government/NHS Executive have declared the companies innocent until proven guilty repeatedly until the end of long appeal processes!

“It has obviously been hoped by the suppliers that they could opt out of actually being regarded as guilty of cartel activity and, emboldened to dig in with the works (literally), as if innocent until proven guilty – now someone else’s problem, not theirs. This way, the legal clock works entirely in their favour and the slower it goes the better.

“But the principle the questionnaire actually works with is: if convicted in any court the supplier is now in the court’s eyes guilty until found innocent on appeal. But, backed by an elaborate misconception, the suppliers in their questionnaires replied no to having a conviction, when in fact they both did have one. It is jaw- droppingly blatant but well massaged.

“Rather, the two companies should have been eliminated from tendering until such time as they were somehow found innocent. But quite enough time has passed for that. Bluntly, they should not have been allowed to get away with this inversion of the normal assumptions.”

‘Robust procurement process’

However, a spokesperson for Velindre NHS Trust said: “The new Velindre Cancer Centre is being developed under the Welsh Government’ sMutual Investment Model policy which supports additional investment in social and economic infrastructure projects and improves public services in Wales.

“All contractors associated with the development of the new Velindre Cancer Centre are appointed following a robust procurement process. The new Velindre Cancer Centre construction and maintenance will need to comply with all the required standards.

“The development of the new Velindre Cancer Centre is vital in safeguarding the provision of crucial cancer treatment and care for the 1.5 million people of southeast Wales over the coming decades. It will support the region in improving the quality of care, patient experience and outcomes. The development of the new Velindre Cancer Centre allows us to keep pace with increasing demand as the number of people referred to us with cancer grows every year.”

A Welsh Government spokesperson said: “Velindre NHS Trust has followed procurement law. We have been assured there are no grounds that would have resulted in the Acorn consortium being excluded on a procurement basis.”