Procurement Regulations

2024 is set to be a big year for Public Sector Procurement with two major changes to the way that Goods, Works and Services are procured by the Public Sector.

On 1 January 2024 the Health Care Services (Provider Selection Regime) Regulations 2023 were implemented which are designed to:

  • introduce a flexible and proportionate process for deciding who should provide health care services
  • provide a framework that allows collaboration to flourish across systems
  • ensure that all decisions are made in the best interest of patients and service users.
  • The Provider Selection Regime must be used by Relevant Authorities when procuring Health Care Services.

The second change expected in 2024 is the implementation of the Procurement Act 2023 which is planned to take place in October.  The Procurement Act is a significant focus of the Transforming Public Procurement Programme and replaces the following four sets of regulations:

  • The Public Contracts Regulations 2015
  • The Utilities Contracts Regulations 2016
  • The Concessions Contracts Regulations 2016
  • The Defence & Security Public Contracts Regulations 2011
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Provider Selection Regime

Provider Selection Regime (PSR)

PSR is only applicable to Relevant Authorities in England.  Relevant Authorities are defined as:

  • NHS England
  • Integrated care boards (ICBs)
  • NHS trusts and NHS foundation trusts
  • Local authorities and combined authorities.

Organisations identified as Relevant Authorities must use the PSR regulations when procuring Health Care Services, or mixed procurements where the main element of the requirement is Health Care Services. Whether or not a Service is in scope of PSR will be determined by the Common Procurement Vocabulary (CPV) code that the service is aligned with. The regulations include the list of CPV codes that are included. There is no value threshold to the application of PSR so all in scope requirements will need to follow the regime.

If you are a Relevant Authority, seeking to procure a service within the PSR codes you will now need to apply the PSR regulations instead of the Public Contracts Regulations 2015 (PCR).  The PSR Regulations and Statutory Guidance provide details of how PSR should be applied.  NHS England have also developed toolkits and have provided webinars to help embed the regime.

We take a look below at some of the key elements of PSR and what it means for Relevant Authorities.

Selection Processes (Regulation 6)

PSR offers three provider selection processes.

  • direct award processes (direct award process A, direct award process B and direct award process C)
  • most suitable provider process
  • competitive process

If your requirement fits the criteria for direct award processes A or B then you must use the relevant process.  You may choose to use direct award C if you met the criteria but you don’t have to.

The most suitable provider process may be used if you meet that criteria but you don’t have to, you could opt to run a competitive process.

The structure provided with these processes may require amendments to current governance processes, with consideration for recording and reporting how the decision or requirement to follow the selected route has been arrived at.

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Standstill Period (Regulation 12)

The standstill period for PSR allows any provider that is aggrieved by the decision and believes that there has been a failure to comply with PSR regulations to make a written representation articulating their opinion.  The regulations and guidance provide a good level of detail on the standstill period which allows eight working days for a representation to be made but the timescale must be very carefully applied – see our spotlight on applying the standstill period.

If a representation is made, there are further obligations and specified timescales in terms of reviewing your decision and responding so when planning a procurement, it’s important to consider the potential timescales required to respond to any representations received.

Transparency

PSR requires the publishing of notices at specified times during a procurement.  The notices must be published on Find a Tender Service (FTS) and a guide is available to ensure you use the right notice and provide the correct information to meet the transparency requirements.

Annual Summary and Monitoring Requirements (Regulation 25)

PSR requires Relevant Authorities to maintain records of decisions made when applying PSR and requires the publication of an annual summary relating to the use of PSR within the previous year. It will be critical to be aware of the requirements of the annual summary and maintain relevant records in order to fulfil this obligation.

Framework Agreements

Wondering if you can still utilise NHS SBS’s wide range of healthcare service framework agreements now that the PSR is live? The answer is YES.

The PSR recognises that there are existing framework agreements established under the PCR 2015 which deal with the procurement of health care services, therefore, such framework agreements remain a compliant route to market under the PSR until their expiry date.

Call-off guidance can be downloaded below. For more information on which framework agreements are in scope, please contact the team: nsbs.health@nhs.net

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Spotlight On...

Standstill hotspot

‘The standstill period starts the day after the publication of an intention to award a contract. Representations must be received before midnight on the eighth working day after that day.’

In practice, this means that the standstill period will take up a full two weeks unless you publish your notice on a Friday, as the regulations allow the standstill period to start on a non working day. The following example shows the effect of publishing a notice on a Monday or on a Friday

 

Monday  Publish Notification Friday  Publish Notification
Tuesday  Standstill starts Saturday  Standstill starts
Wednesday  Day 1 of 8 Sunday Non-working day
Thursday  Day 2 of 8 Monday  Day 1 of 8
Friday  Day 3 of 8 Tuesday  Day 2 of 8
Saturday  Non-working day Wednesday  Day 3 of 8
Sunday  Non-working day Thursday  Day 4 of 8
Monday  Day 4 of 8 Friday Day 5 of 8
Tuesday  Day 5 of 8 Saturday  Non-working day
Wednesday  Day 6 of 8 Sunday  Non-working day
Thursday  Day 7 of 8 Monday  Day 6 of 8
Friday  Day 8 of 8 Tuesday  Day 7 of 8
Saturday  Non-working day Wednesday  Day 8 of 8
Sunday  Non-working day Thursday Proceed
Monday  Proceed

Procurement Act 2023

The Procurement Act 2023 gained Royal Assent in October 2023 and is anticipated to commence in October 2024.  The Act is designed to improve the way Public Procurement is regulated in order to:

  • provide simpler and more flexible routes to market.
  • improve access to Public contracts for new entrants such as small business and social enterprises.
  • support tougher action on under performing suppliers and those who pose unacceptable risk.
  • Increased transparency of Public spending.

Full details of the regime are available at Transforming Public Procurement – GOV.UK (www.gov.uk) and a range of resources are available to spread the message in order to prepare buyers and suppliers for the upcoming changes.

Knowledge Drops are available for contracting authorities, suppliers and Small Medium Enterprise / voluntary, community and social enterprises to introduce the Act. Suppliers may have received the Procurement Act Supplier Letter and we encourage all suppliers to review this and commence preparations for the transition.

Final Statutory Instruments are anticipated in April 2024, which will start the six month preparation period.

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