Government ready for £8bn lateral flow test bonanza

The government has earmarked £8bn to spend on lateral flow tests over the course of the year as it recently established its new dynamic purchasing system to meet its ongoing supply of additional COVID-19 lateral flow tests.

In a tender notice published on Friday, the government revealed that the total sum of the contract award could be worth £8bn; commencing on 07 April 2021 through to 06 April 2022.

This tender notice essentially reads as the DHSC having something of a blank-check; noting there will be different lots on offer based on various characteristics.

It added that even if a potential company can’t meet the 07 April 2021 deadline, then it will be potentially eligible for a share of the £8bn so long as it meets the required criteria in future.

While the criteria is yet to be crystalised, it is loosely expected to be based upon the following areas:

“For those procurements within the DPS, DHSC envisage using the following criteria which may, where appropriate, be formulated more precisely in the Invitations to Tender for those procurements and may differ depending on Lot and the requirements of the procurement:(A) Cost;(B) Selected elements of the Specification;(C) Performance Requirements;(D) Terms & Conditions; and(E) Social Value.”

Lateral Flow – Dynamic Purchasing System (DPS)

Our View

This is promising news for investors in the so-called ‘COVID’ stocks – budgeting £8bn is clearly a sizeable number.

However, it is also important to be cautious; as we’ve seen with previous tender notices, these sums can often mean little in reality and are not a guarantee that £8bn will be spent!

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