Decision ref
0093 2023/24
Decision date
03/04/2024
Portfolio
Wellbeing, Culture & Heritage
Wards
All wards
Title
Proposed Direct Award C process - Update to re-commissioning Integrated Sexual Health Services.
Summary
1.1 The decision to re-commission Integrated Sexual Health Services, and associated expenditure, was approved by Cabinet on 27 September 2023. A competitive tender was originally proposed for procurement. However, from January 2024, new Provider Selection Regime (PSR) Regulations came into force. The legislative changes make provision for a direct award option in certain circumstances. The decision proposed is to follow a Direct Award C process and award the contract to the incumbent provider.
Purpose
3.1 The purpose of this report is to present the impact of the new Healthcare Services - Provider Selection Regime (PSR) Regulations 2023 on the Council’s proposed procurement of Integrated Sexual Health services.
3.2 As the legislative changes have been introduced since Public Health had submitted their previous report to Cabinet, this report will outline how the transition may influence/ change the procurement process that was proposed previously.
3.3 The new rules introduce a more “flexible and proportionate process” for procuring healthcare, which allows for collaboration across commissioning and care systems.
3.4 Five process options for provider selection are accommodated within the new regulations, with clear criteria for when each may be used:
• Direct Award Process A
• Direct Award Process B
• Direct Award Process C
• Most Suitable Provider Process
• Competitive Process
3.5 Procuring authorities are required to comply with defined processes, to evidence their decision-making rationale regarding which process is to be selected, and to maintain clear record-keeping to support transparency.
3.6 This report clarifies which process options may be applied to our proposed procurement and presents the rationale for the process selected.
Background
4.1 The new Healthcare Services Provider Selection Regime (PSR) Regulations 2023 will govern procurement of healthcare services in England from January 2024. They are introduced as legislative changes that followed the Health and Care Act 2022.
4.2 PSR legislation removes the procurement of healthcare services from the scope of the Public Contracts Regulations (PCR) 2015 and revokes NHS (Procurement, Patient Choice and Competition) (No.2) Regs 2013.
4.3 PSR will now apply to all procurement of healthcare services by relevant authorities. These are defined as being NHS England, Integrated Care Boards (ICBs), NHS Trusts, and Local Authorities (LAs).
Conclusion
6.1 The advantages of a direct award outweigh any potential advantages of a competitive process, primarily because we are satisfied generally that the Trust is delivering the contract to a sufficient standard. Although the new contract specification includes some changes, these are relatively minimal when compared with the current specification and so do not exceed the allowable change thresholds.
6.2 Public Health commissioners consider that a continuous improvement programme which is developed in collaboration with the provider would be a more cost-effective and sustainable way of improving sexual health outcomes in St Helens than a cycle of competitive procurement processes. Continuing to contract with the incumbent provider via a direct award would be a proportionate way to plan service developments and assure service continuity with minimal disruption.
Risk Implications
There are a small number of risks identified with the proposal for a direct award of contract, as follows:
There is a risk that the direct award process may be delayed if an aggrieved potential provider / bidder were to submit a ‘representation’ challenging the authority’s decision to apply a direct award process under PSR instead of following a competitive process. Given that the Healthcare Services - Provider Selection Regime (PSR) regulations only came into force in January 2024, those providers who might have anticipated a tender may not be fully conversant with new regulations and therefore may question the decision for direct award which is a new option within the PSR regulations. Whilst this is a possible risk, we have clarified with legal colleagues that we are applying new PSR regulations appropriately for our proposal.
A saving has been applied to the contract meaning it is offered at a reduced financial value compared with the current contract. There may be a risk that the incumbent provider are unable to deliver the full specification under these terms and may seek to negotiate the terms of the direct award. Whilst we have clarified that the value of the contract award is not negotiable (nor would it have been in a competitive tender), we may need to agree action to manage and mitigate the possible impacts of the budget reduction. The incumbent provider has engaged positively with providers during the existing contract period to accommodate budget savings in a way that minimises impact on service delivery.
Measures to Redress Risk
We have maintained excellent records to support the decision making process for proposing a direct award and have consulted with the Council's lawyer to ensure that we have applied the new Healthcare Services: Provider Selection Regime (PSR) regulations (2023) correctly for this procurement.
Declarations Of Interest
None
Equality Impact Assessment
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More information
Please contact Diane Bolton-Maggs on 01744 671058
