Watchdog criticises UK government for COVID procurement amid "chumocracy" claims

* UK handed out COVID contracts worth 18 bln pounds

* Lack of transparency, adequate documentation: watchdog

* Government says had to act urgently to get vital equipment

* Critics accuse ministers of cronyism

By Michael Holden

LONDON, Nov 18 (Reuters) - The British government did not
properly document key decisions nor was it open enough about
billions of pounds of contracts handed out during the COVID-19
pandemic, its spending watchdog has said, as critics accuse
ministers of running a "chumocracy".

The National Audit Office (NAO) said on Wednesday there had
been a lack of transparency and a failure to explain why certain
suppliers were chosen, or how any conflict of interest was dealt
with, over 18 billion pounds ($24 billion) in procurement deals
made between March and the end of July, often with no
competition.

The report comes amid growing criticism some multi-million
pound contracts were awarded during the coronavirus crisis to
companies with links to ministers, lawmakers and officials.

"While we recognise that these were exceptional
circumstances, it remains essential that decisions are properly
documented and made transparent if government is to maintain
public trust that taxpayers' money is being spent appropriately
and fairly," NAO head Gareth Davies said.

"The evidence set out in our report shows that these
standards of transparency and documentation were not
consistently met in the first phase of the pandemic."

Cabinet Office Minister, Julia Lopez, said they had faced an
unprecedented pandemic and had "robust processes" in place to
get critical equipment while ensuring value for money.

"We needed to procure contracts with extreme urgency to
secure the vital supplies required to protect frontline NHS
workers and the public and we make no apology for that," she
said.

The NAO said that by July 31, Prime Minister Boris Johnson's
government had awarded 8,600 contracts in response to the
pandemic, with the vast majority for personal protective
equipment (PPE). Of these contracts, 10.5 billion pounds was
awarded without any competition.

"HIGH PRIORITY"

The watchdog said a "high-priority lane" was set up to
assess potential PPE leads from government officials,
politicians and senior health staff. While one in 10 suppliers
from the high-priority lane got contracts, just one in 100 from
the ordinary lane did.

The NAO examined 20 contracts and found departments had
failed to document decisions such as why a supplier was chosen
or whether risks such as potential conflicts of interest were
considered.

It highlighted one 550,000-pound contract awarded to Public
First, a company that delivers focus group and communication
services, that had links to senior minister Michael Gove.

"We found a lack of documentation recording the process for
choosing the supplier, the justification for using emergency
procurement, or any considerations around potential conflicts of
interest," the NAO said, adding there was no evidence Gove had
been involved in the contract's award.

In recent weeks, newspapers have accused the government of
running a "chumocracy" with contracts, including for the
purchase of what turned out to be unusable PPE, and appointments
made to those with family or business connections to those in
power.

Keir Starmer, the leader of the opposition Labour Party,
told parliament last week there was "a real question about the
way that contracts are being awarded".

The NAO said the Cabinet Office had asked for an internal
review of six PPE contracts that had attracted media attention
and found "there were some gaps in the documentation, such as
why some suppliers which had low due diligence ratings were
awarded contracts".

But the report added: "We found that the ministers had
properly declared their interests, and we found no evidence of
their involvement in procurement decisions or contract
management."
(Editing by Stephen Addison)