New guidance for NHS Commissioners on procurement of healthcare services

The Department of Health has published a guidance note The Public Contracts Regulations 2015 and NHS Commissioners summarising the main requirements of the Light Touch Regime (LTR) of the Public Contracts Regulations 2015 (PCR 2015) and highlights the changes to commissioners and those supporting them (Commissioning Support Units NHS Trusts and NHS Foundation Trusts) with their procurement of healthcare services. The guidance should be read in conjunction with regulations 74-77 of the PCR 2015 and the Crown Commercial Services' guidance on the LTR for health social education and certain other services.

Five areas for commissioners to be alert to

  • The new provisions of the PCR 2015 relating to the award of clinical services came into force for clinically commissioned work within the NHS on 18 April 2016. Any new healthcare services contract procurement procedure that commences on or after that date will need to comply with the requirements of the PCR 2015.
  • Under the PCR 2015 health social and other specific services are subject to the LTR where the value of the contract is in excess of 750 000 Euros (£589,148 at current exchange rates).
  • Under the LTR the PCR 2015 includes some additional requirements including the requirement to advertise in the OJEU either by a contract notice or a prior information notice the intention to award a public contract with a lifetime value of 750 000 Euros (£589,148) or more except where there is a reason for using the negotiated procedure without prior publication; and that any variation to the procurement process must comply with the principles set out in Regulation 76(4) of the PCR 2015.
  • Under the LTR commissioners have the freedom to determine the procurement procedure to use when awarding a contract provided that they satisfy the principle of transparency and equal treatment of providers.
  • The guidance note provides that the 'PCR 2015 regime is not a barrier to the integration of care services where this make sense for the local community.' - this being a key priority in the NHS Five Year Forward View. Indeed points out the guidance the 'light touch regime' specifically states that commissioners may use certain award criteria that are highly relevant to patient care when designing and running their procurement processes including the needs of vulnerable users and ensuring the quality comprehensiveness and continuity of patient services.

What to take away

The introductory section of the guidance states that 'The PCR 2015 - contain a number of flexibilities that where justified can be used by commissioners to dispense with the need for open competition.' It is important not to read this as suggesting that it is possible to dispense with the need to advertise in the OJEU if the value of the contract is over the threshold. It is true that an over-threshold LTR procurement need not follow one of the formal procurement processes provided that the principles set out in Regulation 76 are followed but the requirement to advertise cannot be avoided if the contract is over the threshold.

That said as touched on above this advertisement need not be made via OJEU Contract Notice; it is instead possible to use a Prior Information Notice (PIN) as a call for competition provided that the PIN meets the requirements in Regulation 75(1)(b). We have recently seen NHS England use PINs to call for competition for around £15 billion of specialised services contracts and has stated in the PINs its intention to award the contracts for 2017-19 to the incumbent providers unless expressions of interest are received from alternative operators triggering a competitive process. The latest guidance draws out the point that commissioners could use the negotiated with notice procedure set out at Regulation 32 provided that the grounds for its use are met. One of these grounds is the situation where in an open/restricted process (for which there has been a call for competition) has yielded no suitable tenders or requests to participate.

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