National Audit Office finds serious failings in procurement process of contract between UK Trade and Investment and PA Consulting

Hayley Kirton
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The contract saw PA being paid £18.8m for the first year alone (Source: Getty)

The National Audit Office (NAO) has today slated both the government department and the consulting agency involved in a contract which saw the government being questionably charged for services.

Among the report's criticisms are that UK Trade and Investment's (UKTI) governance of the procurement process for its contract with PA Consulting was weak, that the government department did not keep an adequate paper trial for the process and that its handling of the process breached good practice.

In addition, the NAO found that PA should have been more transparent and did not clearly set out a number of charges it was planning to levy on UKTI.

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"It is clear that, on this contract, both UKTI and PA have fallen well below the standards expected in managing public money," said Amyas Morse, head of the NAO. "UKTI should have been in control of the procurement and understood the pricing; PA should have been more transparent in its dealings with UKTI.

"There are serious lessons to be learned on both sides."

UKTI had in place a three-year contract with PA Consulting for the outsourcing of sector specialist services, for which PA was paid £18.8m for the first year alone. The contract started in 2013-14.

After spotting inaccuracies in a spreadsheet PA provided, UKTI called in auditors RSM to investigate in 2015. RSM's audit concluded that PA had "consistently made incorrect and misleading representations" to UKTI.

UKTI has since terminated the contract and agreed a settlement with PA in May.

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A statement for PA notes that the company remains "proud of the results of the work delivered" and points out that the NAO itself highlights areas where the specialists performed well, such as supporting more than £6.3bn of UK exports in 2015-16.

The PA statement also stresses that an independent review by law firm Baker Botts confirmed that the firm's invoices were in accordance with the contract.

Meanwhile, a UKTI spokesperson said: "As soon as UKTI identified problems, we took decisive action to resolve them and conducted a forensic review as well as notifying the NAO and Cabinet Office.

"This was an isolated incident which took place over two years ago and UKTI has made significant improvements to its commercial practice since then."

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