The Independent Patient Choice and Procurement Panel was established under the PSR to provide non-binding rulings on the application of the regime and also elements of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012.

The Panel's first decision was handed down in May 2024 and concerned whether Direct Award Process C could be used to award a new contract to the incumbent provider. The Panel concluded that Direct Award Process B must be used under the circumstances of that procurement.

Last month, the Panel published its second and third case review reports and they are proving to be clear, concise and consistent with many of the principles we are used to in procurement law as a whole. So far, we understand that the NHS bodies concerned have chosen to adhere to the decisions of the Panel and that is to be welcomed. It will be interesting to see how these rulings are used to guide practice and as non-binding precedent going forward.

Second Panel decision - Same Day Urgent Care Unit using the Competitive Process

In April 2024, Liverpool University Hospitals NHS Foundation Trust (“LUHFT”) launched a PSR competitive process to award a contract for Same Day Urgent Care Unit services. The winning bidder, Primary Care 24 ("PC24"), received a score of 69.6 out of 100, compared to ID Medical Group Limited (“IDMG”)'s score of 66. Following correspondence between IDMG and LUHFT, in which IDMG asked for further information to explain the scores against the award criteria, LUHFT upheld its decision to award to PC24. In July 2024, IDMG referred its complaints to the Panel.

The Panel considered similar issues to those found in claims under the Public Contracts Regulations 2015 ("PCR"); i.e. the equivalent of "manifest errors" in scoring and unequal treatment during clarification and presentation processes. The Panel's decision demonstrates that public bodies must apply the same level of rigour and detail to the preparation of PSR procurements as they do to PCR procurements; as they will be held to the same standards of fairness, equal treatment and transparency throughout the process.

Issues in consideration

The Panel was asked to consider four issues in its review:

1. the way in which IDMG’s CQC registration status was evaluated in its response to Question 7.2;
2. the clarifications and resubmissions relating to IDMG’s and PC24’s pricing proposals;
3. PC24’s understanding of the Provider Service Model and LUHFT's evaluation of its response to Question 7.2; and
4. the role that bidders’ presentations played in LUHFT’s evaluation of their proposals.

In relation to the first issue, the Panel found that LUHFT did not act fairly by taking account of IDMG’s CQC registration for an unrelated service when evaluating IDMG’s response to Question 7.2. Clarification responses had confirmed that CQC registration was not required for the services because this was held by LUHFT. As a result, the Panel found that LUHFT had breached its obligations under the PSR regulations.

In relation to the second issue, the Panel found that LUHFT did not act fairly in its handling of the clarification and resubmission of the bidders’ pricing proposals because: (i) LUHFT did not provide IDMG with the same opportunity that it gave PC24 to clarify and resubmit its pricing proposal in relation to non-clinical staffing costs; and (ii) PC24's revised pricing proposal made changes beyond the matters on which LUHFT was seeking clarification.

On the third issue, the Panel considered that PC24 did not submit a service model with the incorrect level of staffing, nor was it inconsistent with the requirement set out in the service specification. As a result, the Panel found that LUHFT’s evaluation of PC24’s response to Question 7.2 did not breach its obligations under the PSR regulations.

On the final issue, the Panel considered the bidders' scored answers and concluded that PC24’s presentation was taken into account in the evaluation of its proposal, notwithstanding that this was not part of the evaluation process described in the procurement documents. Additionally, the Panel could not find a scoring methodology for presentations in the procurement documents that would enable LUHFT to evaluate presentations in a consistent way. The Panel therefore found that LUHFT did not act fairly or transparently in its treatment of bidder presentations and, as a result, breached its obligations under the PSR regulations.

Outcome and lessons learned

The Panel advised that LUHFT, as a minimum, should go back a step and invite responses again from IDMG and PC24, ensuring that the information and requirements are clear and accurate. However, it was for LUHFT to consider whether to abandon the current provider selection process if it deemed that this would be necessary to ensure a fair provider selection process for the service.

It's clear that the Panel will give high regard to the principles of transparency, fairness and proportionality as required by Regulation 4 of the PSR regulations. There is no express obligation of equal treatment in the PSR but the Panel found here that by not giving IDMG the same opportunity to resubmit its pricing proposal (i.e. by not complying with equal treatment principles), LUHFT had acted unfairly.

Third Panel decision - All Age Continuing Care using Most Suitable Provider Process

In August 2024, Xyla asked the Panel to advise on the selection of a provider by Staffordshire and Stoke on Trent Integrated Care Board (“SSOT”) for its All Age Continuing Care services (“the AACC service”) in accordance with the Most Suitable Provider ("MSP") process.

The MSP process is perhaps the most controversial of the PSR; it is not a "direct award" process as such, but rather involves the identification of the "most suitable provider" by reference to pre-drafted key criteria and basic selection criteria. Note, the aim is to find the most suitable organisation to deliver the services, not the best tender - because the process does not involve either a request for, nor formal evaluation of, tenders but considers the providers themselves. In order to use this process, the Authority must be satisfied that it is likely to be able to identify the most suitable provider by "taking into account likely providers and all relevant information available to the relevant authority at the time". So, query, how do Authorities do this without calling for submissions from providers? What standard of detail applies to "all relevant information" and how does one acquire it?

This third panel decision provides very helpful guidance indeed as to how this process is intended to operate and, crucially, the difference between the gathering of information to enable a decision to be made, as opposed to inadvertently seeking tenders.

In May 2024, SSOT had published a Prior Information Notice (PIN) and invited potential providers to express an interest. SSOT received nine submissions with potential providers answering 31 questions on the basic criteria and 29 questions on the key criteria.

The assessment panel met and agreed that Midlands Partnership University Foundation Trust ("MPFT") was the only provider to pass all of the basic criteria and that all of MPFT’s responses to the key criteria were of a sufficient standard to be assessed as “meets requirements”. All other interested providers were eliminated from the provider selection process for not passing the basic criteria. Xyla’s response to the basic criteria failed due to a “technical error” in answering a question about its CQC registration, however, the assessment panel were advised that as Xyla had only failed the basic criteria as a result of a technical error, Xyla’s participation in the provider selection process should be reinstated and its response to the key criteria should be evaluated.

The assessment panel processed to request further information from MPFT and considered Xyla’s response to the key criteria. The assessment panel found that Xyla “did not meet requirements” in relation to several key criteria and, as a result, Xyla was again eliminated from the provider selection process. The assessment panel reviewed the further information from MPFT and, on the assessment panel’s recommendation, SSOT approved the award of the AACC contract to MPFT.

Issues in consideration

The Panel was asked to consider three issues in its review:

1. the applicability of the PSR regulations to the AACC service;
2. whether SSOT’s decision to use the MSP process complied with the PSR regulations; and
3. whether SSOT’s conduct of the MSP process complied with its obligations under the PSR regulations to act transparently, fairly and proportionately.

In relation to the first issue, the Panel considered that the PSR may not be applicable to the AACC service at all given the nature of the services being provided and the absence of any analysis by SSOT that showed the PSR applied. The Panel, however, considered that a finding on this issue was not necessary given the other findings in their review.

On the second issue, the Panel determined that SSOT did not breach its obligation to act with a view to improving the efficiency in the provision of services by using the MSP process to select a provider for the AACC service. However, the Panel found that SSOT did not “take into account likely providers and all relevant information” in its initial decision to use the MSP process nor did it do so at any point thereafter. SSOT failed to demonstrate it had taken steps to monitor and understand the supplier landscape and appeared to be driven largely by the fact that the MSP process would be quicker. As a result, SSOT’s decision to use the MSP process was in breach of the PSR regulations.

In relation to the third issue, the Panel found that SSOT did not act fairly, transparently or proportionately due to: (i) its preference for MPFT as the provider of the service; (ii) the requirement that potential providers should be registered with the CQC: (iii) questions on the key criteria and the methodology for evaluating submissions; (iv) the evaluation of the MPFT and Xyla submissions; and (v) the lack of feedback following its submission. Consequently, the Panel found that SSOT had breached its obligations under the PSR regulations.

Outcome and lessons learned

The Panel advised that SSOT should abandon the current provider selection process and could not return to an earlier step in the provider selection process. The Panel also recommended that in any future procurement for the AACC service, SSOT robustly assures itself that it falls within the scope of the PSR regulations.

This third decision by the Panel is a reminder to carefully consider the scope of the procurement and whether it falls under the PSR or PCR at the outset (noting the concept of "mixed procurements" in Regulation 3); and to ensure that sufficient market research is undertaken to ensure that the Authority can confidently conclude that the MSP process is the correct process to use under the PSR. As with the second decision, the importance of transparency and a robust audit trail are clear.

For any questions or concerns on the application of the PSR to your procurements, please contact the DACB Procurement Team.