Six contracts worth a total of 15 million pounds to carry lateral flow kits to the UK at short notice are disclosed in documents.
In the face of concerns that the UK is being “ripped off” for the coveted tests, airlines like British Airways were paid £ 15 million to fly in Covid test kits from China at short notice.
Documents published on New Year’s Eve show BA received £ 2.7 million under a deal granted by the Department of Health and Social Care for air freight services (DHSC).
According to five other freshly issued contract notices, another £ 12.35 million went to Air Charter Service (ACS), which is operated by a private equity company.
Documents accompanying the contracts, awarded at the end of November, show BA and ACS were paying to transport lateral flow kits for Covid-19 used for rapid testing.
The annex to the contract states, ‘Given the very high global demand, the supply of these latest test kits is currently limited, and hence it was appropriate to contract for the supply […] of a product produced in China in order to secure the required quantity of product and prevent gazumping.’
On a ‘ex-works’ basis, DHSC bought the kits, ensuring that the supplier did not have to worry about exporting the kits to the UK.
If a product has to be procured on a ‘ex-works’ basis, it is important to transfer this product as quickly as possible to prevent it from being sold to higher bidders,”When a product must be procured on a ‘ex-works’ basis, it is imperative that this product be moved as quickly as possible to prevent it from being sold to higher bidders,”
Without open bidding, the six contracts, worth a total of 15 million pounds, were awarded under special powers which can be used in emergencies such as a pandemic.
It is unclear how many flights were sold for the money or whether any benefit was made by the companies.
Separate contract disclosures showed that because of the widespread cancellation of passenger flights, which usually also carry freight, the government has observed “dramatic cost inflation” in the air cargo industry.
BA said, “We’re proud to have done our part to help during the pandemic by flying more than 12,000 tons of medical equipment to where it was desperately needed.”
By cutting seats, the carrier has converted two 777-200 aircraft into freighters and has flown a total of 445 return flights since the pandemic broke out.
Together, BA and Virgin Atlantic have secured contracts worth over 150 million pounds to transport medical supplies from abroad, such as face masks and medical gowns.
ACS has earned almost £68 million worth of UK government contracts. Alcuin Capital Partners, which also co-owns the Groucho Club, a celebrity club in the Soho district of London, owns the firm.
Released on Dec. 31, the new contract announcements are the first to detail the role of airlines and aviation brokers in supplying the United Kingdom with test kits.
The reference to “gazumping” also highlights the degree of concern among officials that if they obtain a better bid, suppliers will tear up contracts.
The government has spent more than £ 1 billion on lateral flow test kits since the end of October, according to publicly available contract records.
For comment, The Guardian reached out to DHSC and ACS.