There is considerable flexibility available to commissioners in the way they conduct procedures for the procurement of light touch regime contracts over the EU threshold of £589,148 (€750,000). The aim of the light regime is to ensure that the opportunity to compete for a light regime contract is advertised in the OJEU and that the procurement is conducted in a manner which complies with the principles of transparency and equal treatment. Beyond that, specific procedural requirements are arguably limited, leaving commissioners with room to design and conduct procedures which are appropriate to their particular procurement taking into account, where appropriate, desired patient outcomes.
This Commissioning Byte 3 outlines the statutory procedural requirements for above threshold NHS contracts which are subject to the light regime and the NHS (Procurement, Patient Choice and Competition (No.2) Regulations 2013. We look at the procurement process, pick up on some areas of uncertainty and consider the issue of how best to emphasise desired patient outcomes.
The statutory procedural requirements which apply to above threshold light regime contracts are, in summary, to:
- advertise the opportunity in the OJEU
- include in the advertisement information about conditions for participation, time limits for contacting the contracting authority and the award procedures to be applied
- run a procedure which is compliant with the principle of transparency and equal treatment and imposes reasonable time limits on economic operators for responding
Contracting authorities may take into account "relevant considerations" in relation to award of contracts – which are discussed further below
Above threshold procurements should be advertised in the OJEU, using either an OJEU notice or a prior information notice as a call for competition (PIN). There is a standard form notice (standard form 21) available from the Simap website. If you use an e-procurement provider or e-portal then your provider should have uploaded or created an appropriate form for you to use.
As mentioned above, you are required to include information in the OJEU advertisement about the conduct of the process. You must include information on:
Below the light regime threshold, the Directive takes the position that unless there are concrete indications to the contrary, values below that threshold will typically not be of interest to providers from other Member States. However, the contracting authority should still consider whether there is cross border interest in each particular case.
After OJEU advertising
- There is a large degree of flexibility at this stage. Regulation 76(7) explains that contracting authorities may apply standard procedures (e.g. the restricted procedure, competitive dialogue), but do not have to if they choose to design their own procedure.
- If contracting authorities do choose to design their own procedure, it is clear that a transparent, equal and competitive procedure should be run and while there is no specific light regime regulation requiring written tenders, it is usually necessary to request tenders from bidders before awarding the contract in order to ensure that a competitive, transparent process has taken place.
- It is possible for contracting authorities to run the equivalent of an open procedure. The open procedure as set down in the Public Contracts Regulations 2015 specifies certain time limits, however these do not apply to the light regime and therefore the main considerations for contracting authorities include ensuring that time limits set are reasonable, proportionate, and determined in accordance with the nature and complexity of each procurement.
- Alternatively, a contracting authority could run a selection process and would have the flexibility to decide how that works. If this is the case, the principles of transparency and equal and fair treatment must be adhered to, as is the case in all procurements.
- In terms of the design of any potential dialogue or negotiation stages, this can again be freely chosen by the contracting authority, who could borrow procedural structures from either the Competitive Dialogue procedure or the Competitive Procedure with Negotiation (while bearing in mind that authorities should not disclose sensitive or confidential information from bidders).
- There is some inconsistency and lack of clarity in terms of which provisions apply to the light regime. The Crown Commercial Service, in their guidance on the light regime from October 2015, distinguish between mandatory requirements (which apply to the light regime) and other requirements which are not mandatory.
- The Crown Commercial Service lists the requirements below as mandatory:
- OJEU advertising and contract award notices
- Compliance with Treaty principles of transparency and equal treatment
- Conduct of the procurement in conformance with the information provided in the OJEU advertisement
- Reasonable and proportionate time limits
- The Crown Commercial Service also lists other rules and gives a view on whether they apply or not, as follows:
- Regulation 6 Aggregation rules – does apply
- Regulation 12 Public: public – does apply
- Regulation 46 Division into lots does not apply
- Regulation 53 Availability of procurement documents – does apply
- Regulation 67 Award criteria – does not apply
- Regulation 84 Record keeping and reports – does apply
- In terms of the mandatory and discretionary exclusion grounds in the Public Contracts Regulations 2015, government guidance recommends that the grounds for exclusion are adopted, using the rationale that the prescribed grounds of exclusion address most of the potential concerns and risks which may arise.
- Regulation 76(8) refers to a range of relevant considerations which may be taken into account by contracting authorities in evaluating tenders. Particular award criteria are not specified, such that contracting authorities have some degree of flexibility on this aspect of the procurement.
- The range of relevant considerations which Regulation 76(8) refers to are:
- (a) the need to ensure quality, continuity, accessibility, affordability, availability and comprehensiveness of the services;
- (b) the specific needs of different categories of users, including disadvantaged and vulnerable groups;
- (c) the involvement and empowerment of users; and
- (d) innovation.
- These criteria headings could be used to ensure that the process is quality driven and focussed on improving the services for patients, and should also link in with any direct quality obligations which you would want to see in the contract. What local quality criteria do you intend to use, and how will these be assessed? Once you know that you can ask the bidders how they would seek to deliver them, and incorporate the successful bidder's proposals into the contract. If you are looking towards an outcomes based contract this is particularly important, as while the contract may impose financial penalties for failing to reach the outcomes targets, the CCG should be looking to appoint the provider most likely to deliver the targets.
- In terms of assessing responses, contracting authorities could use the best price/quality ratio, or they could use the lowest-price award criteria if useful. Additionally, government guidance recommends that using the best price/quality ratio is particularly advantageous in circumstances where service quality is important, such as in social care situations, where it may be possible to set a minimum quality standard, after which the lowest cost bid which also meets that standard could be accepted.
Award decision and standstill period
- In terms of whether standstill obligations apply to light regime procurements, we recommend that, wherever possible, in the interests of transparency and equal treatment, authorities should operate a standstill period prior to awarding a contract.
- Other obligations which should be observed include the publication of contract award notices in the OJEU, to notify who the contract has been awarded to. Additionally, Regulation 84 prescribes specific record keeping and reporting obligations throughout the procurement process, which contracting authorities should observe.
For more information, please contact:
Emily Heard, Partner
David Owens, Partner
Fran Mussellwhite, Associate
Catherine Maddox, Solicitor