NHS Procurement: The Provider Selection Regime – Further Panel Decisions: Part 2

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 second decision below and provide our thoughts on the key points. Take a look at Part 1 for our comments on the first decision.

Decision 2: Liaison & Diversion and RECONNECT Services for Lancashire and Cumbria

NHS England North West (“NHSE NW”) currently contracts with Lancashire and South Cumbria NHS Foundation Trust (“LSCFT”) for the provision of Liaison & Diversion Services, RECONNECT Services, Enhanced RECONNECT Services and Mental Health Treatment Requirement Services in Lancashire and Cumbria.

NHSE NW commenced a Competitive Process to re-procure those services in three separate lots. Lot 1 was the Liaison & Diversion Services and RECONNECT Services. There were three bids, including one from LSCFT. Practice Plus Group Health and Rehabilitation was the winning bidder. LSCFT subsequently requested that the Panel review the provider selection process.

The panel considered eight potential breaches in total. Five of those were found not to be breaches of the PSR Regulations. This includes in respect of the decision to fragment the existing service, the setting of weightings for questions, the due diligence in respect of past contract performance and the evaluation and scoring of two specific questions (whether the scores were manifestly incorrect or unreasonable).

Treating providers fairly

The Panel found that there were breaches of the PSR Regulations in respect of fair treatment arising from LSCFT position as incumbent. In particular that the mobilisation question was such that LSCFT understood that it had to explain its exit strategy from the existing contract within the word count (which other providers would not have to do) and in respect of the workforce question NHSE NW had not shared the up to date TUPE schedule provided by LSCFT meaning the other bidders had a misleading impression of the current workforce position.

Provision of information

The Panel found a number of failings in respect of the provision of information to LSCFT.

Firstly it found that the tender outcome letter did not accurately reflect the evaluation panel’s reasons why the successful provider was successful and why the unsuccessful provider was unsuccessful. The Panel considered that it was in principle possible to provide a summary of the feedback in order to meet the requirements of Regulation 11 of the PSR Regulations. However, it must accurately reflect the reasons given by the evaluation panel.

It also found that NHSE NW had breached the obligations in respect of managing LSCFT’s representations including the obligation contained in Regulation 12(4)(b) of the PSR Regulations to promptly provide information requested by an unsuccessful bidder and the obligation in Regulation 12(4)(a) in respect of affording LSCFT a further opportunity to explain or clarify its representations.

Key points

The Panel emphasised that the fact that the Provider Selection Regime offers more limited recourse to the courts obliges commissioners and providers to take a more open, collaborative approach to resolving disputes about provider selection processes. It also highlighted that complying with the obligations in respect of tender outcome letters and information requests and taking a constructive approach to representations will help to minimise the likelihood of matters escalating to the Panel.

Both this decision and the first decision covered in Part 1 therefore serve as a reminder that while the Provider Selection Regime does offer a more flexible and proportionate process for selecting providers for healthcare services, the requirements of transparency and fairness continue to underpin decision-making.