Procurement in a Nutshell: Provider Selection Regime (‘PSR’) – Competitive Process
4th December, 2023
The Department of Health and Social Care recently published the draft Provider Selection Regime (PSR), set out in the Health Care Services (Provider Selection Regime) Regulations 2023, which is intended to come into force on the 1st January 2024.
The PSR intends to remove the procurement of health care services, when procured by relevant authorities under the PSR, from the scope of the Public Contracts Regulations 2015 (the PCR). In doing so, the PSR seeks to give the relevant authorities, to which it applies, more flexibility in selecting providers for health care services, with an aim to promote greater collaboration, reduce the bureaucracy associated with the current rules, and enable the development of stable partnerships. As such, it is hoped the PSR will ensure all decisions are made with a view to securing the needs of patients, improving the quality of the services, and improving the efficiency in the provision of the services.
This new regime will apply to NHS England, Integrated Care Boards, NHS Trusts, NHS Foundation Trusts, local authorities and combined authorities when they are procuring healthcare services.
The procurement processes under the draft PSR include:
-
- Direct Award Process A
- Direct Award Process B
- Direct Award Process C
- Most Suitable Provider Process
- Competitive Process
What this Nutshell covers
This Nutshell will analyse the Competitive Process, explaining its scope and procedural requirements.
Applicability
This process is applicable when the relevant authority seeks to hold a competition for the procurement of healthcare services. The Competitive Process must be utilised when concluding a Framework Agreement (Regulation 6(8)).
Information relating to Framework Agreements will be examined in a separate Nutshell.
Process (Regulation 11)
The relevant authority must first determine the contract award criteria, taking into account the key criteria (Regulation 5) and applying the basic selection criteria (Regulation 19).
The relevant authority must then submit for publication, on the UK e-notification service, a notice inviting offers, including the information set out in Schedule 8.
The relevant authority should then assess any offers received, in accordance with the contract award criteria, and decide to whom to award the contract. Relevant authorities may engage in dialogue or negotiate with all bidders prior to determining who to award a contract, provided they do so in a fair and proportionate manner.
Once the successful provider has been chosen, the relevant authority must promptly inform, in writing
- the successful provider that their offer has been successful and the relevant authority intends to make an award
- each unsuccessful provider that their offer has been unsuccessful, including the information in Schedule 9.
The relevant authority must then submit for publication, on the UK e-notification service, a notice of intention to make an award to the chosen provider, including the information in Schedule 10.
The standstill period (Regulation 12) will begin the day after the publication of the notice of intention to make an award. If no written representations are made during the standstill period, then the relevant authority may enter into the contract (after the standstill period has ended). The relevant authority must submit for publication, on the UK e-notification service, a notice of the award of the contract, including the information in Schedule 11.
The requirements expected of relevant authorities when representations are made during the standstill period, under Regulation 12, will be examined in a separate Nutshell.
Records
Each relevant authority is required to keep certain records (Regulation 24), including the reason for any decision made under the PSR.
When the Competitive Process is utilised, relevant authorities must record the way in which the key criteria was taken into account, how the basic selection criteria was assessed and how the contract award criteria was evaluated when reaching a decision.
In addition, each authority must publish online an annual summary (Regulation 25) which must include the number of contracts awarded where the Competitive Process was followed.
What this means
Under the PSR, the process for competitive tendering is more flexible than current regulations. Relevant authorities are now able to negotiate with bidders more freely, which is hoped to improve the quality of healthcare services and strengthen the partnership between providers and authorities.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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