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How contracting and procurement disciplines helped the UK avoid vaccine supply problems

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Last December, 90-year-old Margaret Keenan became the first person in the UK to receive a COVID-19 vaccination.

Fast-forward to April 2021 and, according to NHS data, over half of the UK’s population of roughly 66 million have had their first dose.

The NHS has rightly praised staff and volunteers helping administer the vaccine. But also worthy of praise is the government’s Vaccine Taskforce, which has secured and distributed the much-needed supplies.

In total, the taskforce, under the auspices of the Department for Business, Energy and Industrial Strategy, secured early access to 457 million doses of eight of the world’s most promising vaccines. In contrast, the EU’s vaccine roll-out has been hit by delays, supply constraints and wavering political support. This culminated in the EU launching legal action against AstraZeneca for allegedly not respecting its supply contract.

Flexibility and pragmatism

Procurement expert Peter Smith, a former procurement director in government and private sector, says forward planning was critical. “There was correct analysis of what was important in supplier negotiations,” he says. “There was an understanding that conventional procurement processes would lead to a less-good outcome. We procurement types love competition and taking time to negotiate terms and conditions. But the UK was more flexible and pragmatic. It didn’t spend too much time worrying about the odd £50m when negotiating the price.”

Smith says there was a recognition that speed was critical and “that a lot would be gained by securing supply quickly”.

Richard Wilding, professor of supply chain strategy at Cranfield School of Management, agrees that the government “procured for resilience not cost”.

In addition to securing supplies from overseas, including India and Belgium, it has invested £300m in manufacturing vaccines in the UK, including at sites in Oxford and West Lothian. This cash was crucial, as, according to the Financial Times, at the start of the pandemic, the UK had only one vaccine manufacturing plant.

“A big issue was a lack of ‘fill and finish’ capacity, which the government sought to procure very early on,” Wilding says. “There was a trend for onshore, near-shore and multi-shoring manufacturing. If one location was shut down, there would be other sources of supply.”

Working at pace and understanding risks

Part of the government’s investment was £100m spent on upgrading an existing animal vaccines facility to create a vaccine manufacturing and innovation site in Braintree, Essex.

Mark Graham, lead project manager at the Vaccine Taskforce, helped find the site. “We work on setting up the infrastructure securing manufacturing plants for developers. We look for the best and most secure sites, people and equipment,” he explains.” The main challenge has been doing everything at pace and putting a lot of effort into understanding what our risks are, such as supply chain bottlenecks, so we could manage it.”

He says strong partnerships with drug developers have helped the overall roll-out.

“We were upfront with suppliers, stating that we would help with their regulatory approval and placing single-source contracts conditional on approval,” he says.

Jon Broome of Leading Edge Project Consulting and APM’s Contracts and Procurement SIG adds that the partnerships approach saw the UK government extending civil liability protection in the event of vaccines going wrong.

“It was part of the UK breaking this project down into chunks through small contracts. They chose their suppliers early, backed them with money in early drug development, gave financial grants to factories and, I imagine, put in ‘first call’ preferential supply terms,” he says. “The EU’s procurement procedures are bureaucratic and in a world that is moving fast, not being able to match that delays the benefit.”

Another complication was logistics, particularly the need to store and transport the vaccines to centres. The most challenging drugs were Pfizer’s and Moderna’s, which need to be stored at very cold temperatures.

The NHS supply chain has leaned on its third-party logistics service provider Unipart Logistics, as well as other firms such as Relay Technical Transport moving freezers to NHS central storage sites and regional hubs.

“At the beginning, there was limited infrastructure for ultra-cold temperatures, but the system adapted,” says Wilding. “With Pfizer, it moved from large packs of drugs to smaller packs moved in temperature-controlled and GPS-tracked containers. They recognised that securing the cold chain was one of the bigger risks and knew precisely where things were.”

What can we learn from the roll-out?

Broome says one key lesson is ‘getting a contract right’.

“With the EU’s AstraZeneca supply contract, there is a declaration of ‘best, reasonable’ efforts. Now lawyers will tell you never to sign a contract with ‘best efforts’ in it because it means you must drop everything to fulfil it,” he says. “‘Reasonable efforts’ means to do whatever is commercially sensible. I don’t know what ‘best, reasonable’ means. The wording is so important.”

Wilding says more ‘open’ contracts are needed.

“If you are very specific with your contract then it gives people little flexibility and stifles innovation. You need a vision of what you are trying to achieve. Don’t get too bogged down on service-level discussions,” he says.

Smith agrees: “Procurement and project managers like to work to our own timescales. But we need to see that speed is part of the benefit delivery picture. We need to get the balance between speed and rigour right and get on and do it!”

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