Commissioners urged not to take ‘light touch’ procurement regime lightly

8 May 2018

Health commissioners should not be lulled into a false sense of security around procurement by the title ‘light touch regime’.

That was the key message from Hempsons partner Deborah Ramshaw when she addressed a recent PCC workshop in London.

Ramshaw told participants that although the new regulatory regime, which came into force in April 2016, is less prescriptive than the full regulatory regime, commissioners and their NHS partners still face the very real threat of legal challenge if they fail to act reasonably and transparently. The situation isn’t helped, she suggested, by the government’s failure to deliver guidance on the new regime. This was expected following the transition period for health commissioners which has come and gone.

“The full regulatory regime is very detailed. The light touch regime does tell you what you have to do at the beginning (advertise in OJEU) and the end (place a contract award notice in OJEU). But what you do in the middle is entirely up to you. The only thing the regulations say is that you have to be compliant with the Treaty (of Rome) principles by being transparent and by treating bidders equally – even when you have an incumbent provider.”

The regulations and the transparency requirement do mean that commissioners involved in procurement need to keep – and make available to unsuccessful bidders if requested – clear evaluation sheets with a full audit trail and also avoid contract variations that substantially alter the contract.

The light touch regime does however mean commissioners can now take into account ”any relevant considerations” – including, continuity, accessibility, comprehensiveness of the services and the involvement and empowerment of users.

“You can think outside the box a bit more than with fully regulated procurement but remember that some aspect of the regulations will still apply,” Ramshaw said.

Commissioners relying on exemptions from having to run a tendering process - such as there being only one suitable provider - should test the market if they have any doubts, Ramshaw suggested.

She cautioned that unsuccessful bidders are increasingly likely to challenge procurement decisions.

“Procurement has become a lot more contentious for a range of reasons. This is still a fairly new regime without any case law. Bidders are getting more information on why they lost a contract and there is court guidance saying they expect you to provide complainants with information if a complaint is made. The tougher economic climate is also making each bid more important to bidders and bidders are far more clued up than they used to be.”

She warned commissioners that courts could impose severe financial penalties based on the potential profits a complainant may have made and order a re-run of all or part of the process.

This reflected a growing perception that the integration agenda – which often conflicts with procurement law and tendering requirements – is not necessarily a Trojan horse for privatisation.

“From the private provider’s perspective it can seem just the opposite – especially if services that the private sector has traditionally provided are suddenly wrapped up in a bundle with services where the public sector has the expertise and experience. Putting all your acute and community services together could be seen as artificially limiting the range of bidders even though it is also promoting integration.” Therefore thinking carefully about the justification for that “bundle” is key.

Topics & resources Procurement and the market Case Studies

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