02/12/2015

New procurement rules – what you need to do now

The Public Contracts Regulations 2015 will come into force for NHS commissioners in relation to healthcare on 18 April 2016. This may seem a long way ahead, and significantly after next year's contracts should have been settled, so at one level CCGs could take the view that it is not today's problem. However, the impact of the new Light regime which replaces the old part B services for health and social care means that the award of new contracts will need to be on the basis of a published, fair, open, non-discriminatory and transparent procedure. This may not require formal compliance with a full OJEU process, but the problem for the NHS is that it on the face of it excludes the comfortable approach of just rolling contracts forward if there is no positive reason to change.

How then should the commissioners react to this? At the very least you probably need to start planning now for the procurement exercise to award contracts to come into effect on 1 April 2017, or indeed prepare to face the challenges if you do not.

We would suggest that a better way to approach this issue would be to review your portfolio of contracts for clinical care and consider:-

  • Which services are essentially fixed points – these may be services where the only facilities capable of meeting the needs for your population are owned by the current provider, such as emergency care, ICUs etc. This may also apply to some individual care placements where it would be wrong to move the patient.
  • Which services the CCG anticipates putting out to the market either next year or shortly thereafter
  • Which services may be more suited to a framework approach, such as some community therapies

Where there are services in the first category, CCGs should consider agreeing a longer contract to commence in April 2016 or extending current contracts; the 15/16 technical guidance suggested that where services were not tendered the CCGS should consider carefully before issuing a contract of longer than 3 years. You may also wish to make provision for an extension of the contract subject to performance. This may require more thought to be given to service development plans and how the CCG wants to see the service develop over the lifetime of the contract. Length may also be affected by the extent to which the Government delivers multi-year allocations for CCGs to give greater certainty over the budgeting process for the next few years. Consideration may also need to be given to more flexibility to accommodate requirements for service change. CCGs need to be translating their ambitions from Better Care, Health and wellbeing strategies and their commission plans into their contracting.

More detailed consideration will need to be given to the processes where a post April 2016 procedure is to be adopted. We will be following up on this, and in particular looking at how a 'most capable provider' process may need to be adapted to meet the requirements of the light regime.

Matters become more complicated where there are Vanguard proposals, which may in future wish to use new forms of contract, and which in some cases may be at present insufficiently worked up to allow the award of a contract for an extended period at this point. We are in discussions with NHS England about the procurement issues raised by the Vanguard programme, and will keep you abreast of developments.