Procurement Update:Written statement - HLWS300

Cabinet Office
Made on: 22 June 2020
Made by: Lord Agnew of Oulton (Minister of State)

Procurement Update

My Rt Hon. Friend, the Chancellor of the Duchy of Lancaster (Rt Hon Michael Gove MP) has today made the following Written Ministerial Statement:

I previously provided a Written Ministerial Statement on 29 April 2020 in relation to indemnities granted for IP infringement, in respect of the designs, and against product liability claims against the manufacturers of Rapidly Manufactured Ventilator System (RMVS) products through the Ventilator Challenge. I also laid a Departmental Minute before Parliament setting out the detail of these indemnities.

The Ventilator Challenge has been a resounding success, with four designs in production and over 7,500 devices delivered to the NHS. The Cabinet Office intends to grant similar indemnities in letters with other parties involved in the BlueSky Ventilators consortium. The contents of these letters is still under negotiation in the majority of cases.

It is normal practice, when a government department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Department concerned to present to Parliament a Minute giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until fourteen parliamentary sitting days after the issue of the Minute, except in cases of special urgency.

Due to the urgent need to finalise the letters and release payments due to designers and manufacturers, it is not possible to allow the required 14 days’ notice prior to the liabilities going live. Any delay would result in an unacceptable delay in payments due to designers and manufacturers who are supported by a largely SME supply chain.

The precise commercial terms which have been negotiated for each supplier are, and will remain, commercially confidential. While it is difficult to estimate the potential liability exposure, it could exceed £300,000. For this reason, I am informing Parliament of these arrangements.

On this basis, I have today laid before Parliament a Departmental Minute setting out what these indemnities are.

The Treasury have approved these liabilities. However, any concerned Member of Parliament can contact the Cabinet Office who will be happy to provide a response.

Departmental Minute (PDF Document, 75.18 KB)
This statement has also been made in the House of Commons: HCWS306

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