Insight Paper – The Provider Selection Regime

What is the Provider Selection Regime?

The Provider Selection Regime (PSR), which came into force on 1st January 2024, provides a new set of rules that all relevant authorities must follow when procuring certain healthcare services in England.  Implemented under the Health and Social Care Act 2022, the PSR looks to transform healthcare services by encouraging fair and transparent procurement processes, to enhance service quality, optimise efficiency and drive innovation within the sector.  Overall, the aim is to improve the quality and delivery of patient care.

In this insight paper we look at what services are affected, deconstruct the new procurement processes and look at how they will impact healthcare providers.  We also look at how the Contracts Advance software can prove a valuable asset in this new environment.

Services Affected

The PSR applies to the healthcare sector only and specific services within the sector.  Services that are in scope are those provided by hospitals, community facilities, mental health institutions and primary care establishments. Additionally, public health services (including substance use support, sexual and reproductive health) and health visitors are included. Services that are out of scope include non-health care services (such as capital works and business consultancy), goods such as medicines/medical equipment, and social care services unless integrated into a contract for healthcare services.  There is also flexibility to engage in “mixed procurement” where out-of-scope services can be procured alongside in-scope services, allowing for an integrated approach.


New Provider Selection Regime Processes

The new processes provide a more flexible, balanced and streamlined approach to procurement.

Awarding Tender Contracts

The PSR offers various methods for awarding contracts, each tailored to specific scenarios:

  • Direct Award Process A: used when there is an existing service provider with exclusive capabilities, making them the sole suitable candidate.
  • Direct Award Process B: applied when multiple providers are available and the relevant authority imposes no restrictions on numbers.
  • Direct Award Process C: employed when an existing provider effectively fulfils the original contract and is likely to meet the requirements of the new contract without substantial changes to the services.
  • Most Suitable Provider Process: allows the relevant authority to identify the most suitable provider without engaging in a competitive selection process.
  • Competitive Process: chosen when the relevant authority opts for a competitive exercise or seeks to conclude a framework agreement.
  • Urgent Process: reserved for situations demanding quick action, allowing the relevant authority to award or modify the contract urgently with a strictly necessary time constraint or a maximum of 12 months.
  • Contract Modification Process: utilised when external factors such as a corporate takeover/merger or changes in service user volume necessitates the modification of an existing contract.

For Direct Award Process C, the Most Suitable Provider Process and Competitive Process, the primary criteria includes; quality, innovation, value, integration, collaboration, service sustainability, improvement of access, reduction of health inequalities, facilitating choice and social value.

With this new approach to awarding contracts, the Contracts Advance software becomes even more valuable.  With the new Direct Award Processes, healthcare providers will need to know what contracts are coming up for renewal to enable pre-bid engagement.  This is crucial to highlight relevant services and strengths, while also discouraging the direct awarding of contracts to the incumbent through Direct Award Process A or C, especially if a better or equivalent service is available.

The Contracts Advance software has two powerful features to support this process.  The Active Contracts feature provides comprehensive visibility of upcoming opportunities to build a strong bid pipeline.  The Market Analysis feature provides valuable insight on both buyers and competitors, simplifying the analysis and understanding of the competitive landscape, ensuring pre-bid engagement is highly effective.

Transparency and Record Keeping

Along with a more flexible approach to awarding contracts, there is a requirement to provide greater transparency and improved record keeping.  Transparency notices are now to be published when contracts are awarded and, in some of the processes, before the contract awards are made. Relevant authorities must keep detailed evidence of their decisions and the decision-making process to show their due diligence (which they may also have to share with providers).  In addition, Prior Information Notices (PINs) must be released for the Most Suitable Provider Process and are an option for the Competitive Process.  Also, PINs may occasionally be released for a Direct Award Process.

With greater transparency having one source of information can save precious time.  The Contracts Advance software will continue to provide all the information you need, capturing all new notices and highlighting in daily alerts when these are available.  This includes Contract Award Notices (confirmation, F03) and Corrigendum Notice to Contract Award Notices (intention to award, F14).  Having visibility of these in the Contracts Advance software holds significant value as, from this point there is an 8 day standstill period in which to query the decision.  If written representation is received within this timeframe, the standstill period may be extended until resolution, potentially involving revisiting earlier process stages, re-evaluation or even transitioning to a Competitive Process, reopening the opportunity.

In conclusion, the PSR will foster healthy competition through new procurement processes, to ensure overall the highest quality services for healthcare patients.  The Contracts Advance software, with its unrivalled insight on buyers and competitors, as well as its comprehensive visibility of tender opportunities, becomes an even greater asset to stay one step ahead of the competition and maximise opportunities. For more support on your procurement journey, take a look at our bid training and bid management services.

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