Tories seek probe into £1bn contract awarded to consortium with members convicted of corruption

Martin Shipton

The Welsh Conservatives have written to Cabinet Secretary for Health Mabon ap Gwynfor calling for further scrutiny of a decision to award a near-£1bn construction contract to a consortium that includes two firms convicted of bid-rigging offences.

Earlier this week Nation.Cymru reported how Velindre University NHS Trust had refused to release the legal advice it had received saying it was lawful to award the contract to build a new cancer centre in Cardiff to the Acorn Consortium.

Members of the Sacyr group have been fined for infringing competition law by bid rigging in Portugal (Sacyr Neopul S.A. in 2018, fine of 360,000 euros) and Spain (Sacyr Construcción SA on 7 July 2022, fine of £16.7m).

Bid rigging is a serious competition infringement and one specifically aimed at distorting or removing competition in the procurement process and thus increasing costs to the taxpayer.

Kajima Corporation was also found guilty of bid rigging in a criminal prosecution in Japan on 1 March 2021.

Both Sacyr and Kajima have appealed these rulings, but according to the latest update the appeals are still pending.

It is understood that legal advice from the global law firm DLA Piper gave the go-ahead to awarding the contract to Acorn on the basis that the convictions did not represent the “final binding judgement” in the corruption cases.

However, the campaign group Colocate Velindre has its own advice from specialist barrister Simon Taylor, who argues that the convictions should have disqualified Acorn from securing the contract because procurement regulations were breached.

‘Deeply concerning’

Welsh Conservative health spokesperson Natasha Asghar said: “Public confidence in how NHS money is spent is vital, especially as services continue to come under pressure.

“That is why it is deeply concerning that a near £1 billion Velindre Cancer Centre contract was awarded to a consortium that includes companies previously found guilty of bid-rigging offences, raising questions about potential loopholes in the process of awarding public contracts.

“I have written to Plaid Cymru’s Health Minister seeking clarity and further scrutiny over how this decision was made.”

Fines

In her letter to the Cabinet Secretary, Ms Asghar states: “I am writing to you today to express serious concern regarding the decision by Velindre University NHS Trust to withhold the legal advice relied upon, in awarding the near £1bn contract for the new Velindre Cancer Centre to the Acorn Consortium.

“As you will be aware, the consortium includes companies previously found guilty of bid-rigging offences.

“Members of the Sacyr Group have faced substantial fines in relation to anti-competitive bid-rigging practices in Spain and Portugal, while Kajima Corporation was found guilty in criminal proceedings in Japan relating to bid-rigging offences.

“These are clearly serious matters directly relevant to public procurement and public confidence in the integrity of major public contracts.

“The Trust has stated publicly that the procurement process complied with the regulations in force at the time and has argued that the relevant convictions remained subject to appeal.

“However, legal opinion obtained by the Colocate Velindre campaign group from barrister Simon Taylor suggests that there are ‘reasonably good arguments’ that Velindre/NHS Wales may have made errors in their interpretation of the Public Contracts Regulations 2015, particularly in relation to the meaning of a ‘final binding judgment’ and the treatment of competition law infringements.

“Given the scale of the contract involved, the importance of maintaining confidence in public procurement, and the apparent differences in legal interpretation now in the public domain, I believe there is a strong public interest in ensuring that this matter is subject to further scrutiny.

“I would therefore ask that the Welsh Government investigates and considers:

* Whether the procurement process was conducted fully in accordance with the relevant legal and regulatory framework;

* Whether the interpretation relied upon by the Trust created an unintended loophole allowing companies found guilty of serious anti-competitive conduct to remain eligible for major public contracts pending the exhaustion of appeals; and

“Whether further transparency, including publication or independent review of the legal advice relied upon by the Trust, is now necessary in the public interest.

“Public confidence in NHS procurement depends not only on legal compliance, but also on the highest standards being applied to the awarding of public contracts.”

Velindre University NHS Trust maintains that the contract was awarded to Acorn Consortium lawfully.