An e-auction for contracts to supply fresh produce into the School Fruit & Vegetable Scheme had to be scrapped last week after one firm underbid all of its rivals on every contract. The company was subsequently banned from the enforced re-run.

“We did have an issue during the e-auction and one company was asked not to take part when we did a re-run this week,” said Mike Tiddy, category manager at NHS Supply Chain.

He was unable to confirm the name of the company, but FPJ sources singled out Boston-based FW Gedney. Tiddy did, however, say that the ban only applied to this week’s re-run and not future tendering processes.

It is understood that Gedney’s mistakenly underbid every other company on every contract, throwing the entire e-auction into disarray. “We don’t believe there was any skulduggery involved; this was purely a misunderstanding by the company. E-auctions seem to be the way of the future [for public sector tendering], but people have to understand them and we can see why people misunderstand them.

“We have made a conscious decision that we do not award these contracts on price alone,” said Tiddy. “We work closely with Defra on the sustainable food and farming project and the price factor is only 25 per cent of the marking process.”

He acknowledged that, particularly when the bidding takes place online, it is possible for companies to overlook that fact, but added: “Price is not the over-riding priority. It can’t be - otherwise people could quote any price even if they couldn’t do the job.”