VTN - Contract for Potentially Fraudulent COVID Loan Application Investigation (open cases)

Following a Request for Proposal, Submission, Review and Negotiation DBT intends to direct award a contract to NATIS (The National Investigation Service) to continue to deliver an enforcement function for DBT in relation to Bounce Back Loans. During the Covid-19 pandemic, DBT (formerly BEIS) guaranteed ~£46bn through the Bounce Back Loan Scheme (BBLS) via the British Business Bank. Ministers are keen to see action taken to recover the fraudulently taken loans.

Natis currently provide the service and DBT is looking to award a new contract from expiry of the current one 31st March 2025 to NATIS to ensure continuation of the services in respect of cases which are already open. This contract will not include submitting new cases to NATIS. Options in respect of new cases or cases where investigations have not yet begun are being considered by DBT. The requirement covered by the new contract will be for 3 further years activity (plus 3 options of 6 month consecutive extensions).

There are 169 open cases, some of which include Serious Organised Crime (SOC). DBT requires NATIS to continue with the existing caseload and recover funds that have been fraudulently obtained in the BBLS.

This procurement is for a contract to cover a three-year service provision (plus 3 options of 6 month consecutive extensions) for continuation of investigations into cases already opened (169) of potentially fraudulent COVID loan applications.

The service provided by NATIS under this requirement constitutes the following activity sets:

• Assessment of high graded potentially fraudulent loans to identify potential for investigation • Investigation of those loans, including forensic accounting, private investigation and compilation of cases with evidence to support a prosecution (or identify no fraud) • Submission of cases identified as fraudulent through the investigations to the Crown Prosecution Service • Support cases through court • Report on outcome of court cases • Receive money due as a result of court instructions • Issue Account Freezing Orders as required. • Undertake POCA confiscation activity for cases which end in a guilty verdict, where appropriate • Share intelligence with other government departments and law enforcement agencies as necessary to support wider disruption.

Additional information: DBT proposes to award the contract to NATIS, a department of Thurrock Council using the Direct Award with Negotiation procedure without prior publication of a contract notice under regulation 32(2)(b)(ii) of the Public Contracts Regulations 2015 because competition is absent for technical reasons.

DBT considers that it is able to rely on this ground for the following reasons:

• NATIS is key to the enforcement of wrongdoing for Bounce Bank Loans; they build evidence for CPS-led prosecutions of people who are suspected of committing fraud on BBLS, including a focus on Serious Organised Crime.

• The provider of the required services needs to be listed in Schedule 1 of The Proceeds of Crime Act 2002 (References to Financial Investigators) (England and Wales and Northern Ireland) Order 2021 limiting the pool of providers available.

• DBT reasonably believe that there are no alternative suppliers listed in Schedule 1 with the capability or capacity to deliver this requirement which relates only to cases where investigations have already started

• DBT informally approached a number of the Schedule 1 organisations who confirmed they would not be able to deliver the required services because of the risks involved in taking on live cases part way through the enforcement process.

• Acceptance of cases for prosecution by CPS is less likely with interrupted or transferred lines of investigation as would be the case with the introduction of a new supplier.

• DBT reasonably believes that a new supplier would need to recommence investigations from zero in order to establish continuity of investigation which would impact delivery of service and recovery of the fraudulent loans.

Having consulted the Public Sector Fraud Authority and others DBT is of the view that introducing a new supplier at this stage would carry serious risk to the continuity of evidence and risks serious difficulties in DBT and/or NATIS complying with its legal obligations under the disclosure regime under the Criminal Procedure and Investigations Act 1996. If case failures were to take place the Department is at financial risk of paying compensation claims for restrained or frozen accounts and adverse legal costs in failed or otherwise impacted prosecutions (including wasted costs). DBT consider these technical reasons to justify the use of the Direct Award with Negotiation procedure without prior publication of a contract notice under regulation 32(2)(b)(ii)