A company linked to controversial Peer Michelle Mone is being sued by the UK Government for more than £122million.
The Government has issued civil legal proceedings against PPE Medpro, a firm at the centre of a row over the supply of personal protective equipment during the coronavirus pandemic.
The firm said the case over the supply of sterile gowns would be "rigorously defended" and accused the Department of Health and Social Care (DHSC) of a "cynical attempt to recover money from suppliers" who acted in good faith. The DHSC said it had issued breach of contract proceedings over the 2020 deal on the supply of gowns.
A statement issued by the firm said: "PPE Medpro will demonstrate to the courts that we supplied our gowns to the correct specification, on time and at a highly competitive price.
"The case will also show the utter incompetence of DHSC to correctly procure and specify PPE during the emergency procurement period. This will be the real legacy of the court case and it will be played out in the public arena for all to see."
The company has been at the centre of a Westminster controversy, with Tory peer Baroness Michelle Mone taking a leave of absence from the Lords following allegations linking her to it.
Reports - denied by Lady Mone - have suggested the peer may have profited from the firm winning contracts worth more than £200 million to supply equipment after she recommended it to ministers in the early days of the coronavirus pandemic.
Following the reports Mone announced she was taking a "leave of absence" from the Lords with Prime Minister Rishi Sunak urged to remove the whip from the Tory Peer.
It's believed the dispute relates to the contract price of the gowns - reported to be £122 million - plus the cost of storing and disposing of them.
But PPE Medpro claimed the department was fighting over "contract technicalities" such as whether gowns were single or double-bagged because it had "vastly over-ordered" protective equipment. The firm said it had made "numerous attempts at mediation with DHSC" but "they didn't want to settle".
The PPE Medpro statement said: "Over a two month period, July through to end of August 2020, PPE Medpro supplied DHSC with 25 million sterile gowns.
"The gowns were manufactured to the correct quality, standards and specification set out in the contract, delivered on time and at a price that was 50 per cent of what DHSC had been paying at the time."
But "by the end of 2020 it was clear that DHSC has vastly over ordered and held five years supply of PPE across the seven major categories including gowns" and because of limited lifespans for products "it was clear that the DHSC would never be able to use all the PPE they procured".
"Consultants were then brought in to pick over all the contracts and fight product not on quality but on contract technicalities that were never envisaged at the time of contract.
"For example, PPE Medpro's contract never specified double bagging of gowns. Yet it became clear in late 2020 that all the gown manufacturers who had correctly produced single bagged gowns were being unfairly challenged by DHSC.
"Despite numerous attempts at mediation with DHSC, it is clear they didn't want to settle.
"Too many gowns and other PPE items that will never enter the supply chain. That's why DHSC currently have 174 disputes with suppliers to a value of £4 billion. Most of this product will be incinerated or given away."
A DHSC spokesman said: "We can confirm we have commenced legal proceedings in the High Court against PPE Medpro Limited for breach of contract regarding gowns delivered under a contract dated June 26, 2020. We do not comment on matters that are the subject of ongoing legal proceedings."
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