NHS Procurement: The Provider Selection Regime – Further Panel Decisions: Part 1

Competitive Process

It has been six months since the Independent Patient Choice and Procurement Panel (“the Panel”) published its second and third decisions in respect of a provider selection process under the Health Care Services (Provider Selection Regime) Regulations 2023 ("the PSR Regulations").  

The Panel published two further decisions last month which both relate to competitive processes:

• Review of a proposed contract award for Drug and Alcohol Services by Bath and North East Somerset Council published 6 February 2025 (available here); and 
• Review of a proposed contract award for liaison and diversion and RECONNECT services for Lancashire and Cumbria made by NHS England North and West published 19 February 2025 (available here).

We examine the first decision below and provide our thoughts on the key points. You can find our comments on the second decision in Part 2.

Decision 1: Drug and Alcohol Services in Bath and North East Somerset

Bath and North East Somerset Council had sought to bring a number of drug and alcohol services in the area (currently provided by a number of different providers, GPs and pharmacies) under one contract.  That contract was awarded to Turning Point Services following a Competitive Process (under Regulation 11 of the PSR Regulations).  
 
Developing Health & Independence Limited (DHI) a charitable organisation, was a bidder in the Competitive Process and was also an existing provider of certain of those services under a sub-contract (the prime contract was jointly commissioned by the local Integrated Care Board and the Council and held by HCRG Care Group covering a wider range of public health and social care and housing services).  Following correspondence with the Council regarding the award decision DHI escalated its complaints to the Panel.

The Panel review took account of seven issues.    

Evaluation and scoring of bids

Four of those issues related to the evaluation and scoring of the bids received.  This included in respect of errors in the calculation of scores, failure to take proper account of and exclude the winning bidder for low social value scores, the scores awarded not aligning with the feedback and the evaluators having insufficient knowledge of the service.  The Panel found that the Council had not breached the PSR Regulations, and in particular its obligation to act fairly, on these issues.

Choice and design of the provider selection process

The other three issues related to the choice and design of the provider selection process itself.  The Panel found that there had been no breach of the PSR Regulations by the Council in this respect.  In particular:

• Stakeholder engagement: DHI had concerns regarding the level of stakeholder engagement in formulating the award criteria.  However, the Panel noted that whilst commissioners are expected to develop and maintain their knowledge of relevant providers as part of their planning work there is no specific stakeholder engagement requirement when formulating the criteria to be used in a Competitive Process.  
• Choice of process:  DHI considered it was open to the Council to award the contract to it under Direct Award Process C and that the Council choosing the Competitive Process instead of Direct Award Process C was inconsistent with the core principles and objectives of the provider selection regime.  However, the Panel agreed with the Council’s assessment that Direct Award Process C was not available on the basis that the existing contract was wider in scope than the tendered contract and because DHI did not hold that prime contract (it was merely a sub-contractor).
• Service and provider sustainability: DHI had raised concerns that the award decision would have a very significant impact on the charity, placing it in a precarious position which could affect its ability to deliver other community detox and supported housing services.  The Council had an obligation to consider service sustainability (as part of the key criteria which must be considered in following the Competitive Process). The Panel’s view was that the evidence showed that the Council had considered the potential impact on other services and on providers as part of its decision-making

Key points

What is apparent from this review is the importance of the commissioner’s audit trail.  It can be inferred from the content of the review that the Council was able to evidence and so explain its processes and decision-making to the Panel.  For example, the evaluation process was not free from error, but the errors had been managed and documented.  

Further the Council was able to explain its rationale for not applying Direct Award Process C and to evidence through its assessment of risks and business case for the new contract that consideration had been given to the relevant key criteria around service sustainability.  It seems likely that the issues encountered by the Council in identifying whether Direct Award C was available (i.e. whether there is an existing contract that covers the full extent of the services which are required) are likely to be grappled with by other commissioners and the Panel’s comments around consideration of the contracting parties and scope are helpful.  Similarly, consideration of service sustainability including whether and how provider selection decisions might impact on the stability and sustainability of the NHS locally is likely to be an area which challenges commissioners.  The points raised in the review around the type of considerations which need to be factored into that analysis (including in respect of the potential to destabilise providers) and the Council’s approach to doing so are likely to assist.

Ultimately, maintaining a good quality record of decision-making at every stage will help to ensure that the necessary considerations are taken into account in decision making at the appropriate stage and that reasons for decisions are captured and can be relied upon if questions are raised.