The Department for Business, Energy and Industrial Strategy has used emergency procurement rules to award a £1m contract for emergency financial advice to help it deal with the collapse of energy suppliers sparked by the ongoing energy crisis.
BEIS signed a contract with PJT Partners, an investment bank, for “finance support on the energy supplier insolvencies” eight days after Foreign Office minister James Cleverly refused to rule out a bail-out for companies that failed.
It came as ministers held crisis talks with energy firms after a global surge in gas prices forced some smaller suppliers out of business. Wholesale gas prices soared by 250% between January and September.
Cleverly said in September that ministers were looking at how to protect customers from price hikes, and how to protect the supply of energy. "Exactly how we do that will be up for discussion,” he said.
A heavily-redacted contract document shows BEIS’s Energy Security, Networks and Markets Directorate sought out financial advice to support its response using the same emergency procurement rules departments used to award coronavirus contracts.
It awarded the contract without a competitive tender. Regulation 32(2)(c) of the Public Contract Regulations 2015 means departments can bypass the tender stage for “reasons of extreme urgency” caused by events they could not have foreseen.
BEIS did not respond to a query as to how PJT Partners was chosen to fulfil the contract. The bank does not appear to have been awarded any major government contracts in the past, according to procurement records, but sits sit on the CCS corporate framework agreement and so holds the requisite credentials for the work.
PJT provides a “comprehensive range of advisory and capital raising solutions to achieve our clients' strategic objectives”, according to its website.
The company has signed a non-disclosure agreement covering commercially-sensitive information, the contract for financial advice indicates.
Almost all details of the work involved are redacted from the published document, save from the fact consultants will be required to attend progress meetings and provide weekly reports to BEIS staff.
The deal runs for six months from 28 September until the end of March. The department will have the option to extend the contract twice, for six months at a time, if needed.
A government spokesperson said: "This work needed to start urgently to inform the government’s response to the current issues in the energy market, so the contract was awarded in accordance with the Public Contract Regulations."