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Procurement - get ready for the Provider Selection Regime

on Thursday, 25 January 2024.

The Provider Selection Regime (PSR) is a new set of rules for arranging public healthcare services in England and came into force on 1 January 2024.

What is the PSR?

 The PSR is set out in the Health Care Services (Provider Selection Regime) Regulations 2023 (the Regulations) and replaces the current procurement regime. It has been designed to foster collaboration, integration and flexibility by removing the need for competitive procurement in every case.

The award processes

 Under the PSR, commissioners can follow one of five different processes when awarding contracts for healthcare services.

There are a number of direct award processes which allow commissioners to make awards without the need for competition, including the following:

  • If there is an existing provider which is the only provider able to deliver the services in question, the commissioner may be able to follow Direct Award Process A to award the contract to that existing provider.
  • If the commissioner wishes to replace an existing contract approaching the end of its term and they believe that the existing provider is likely to sufficiently satisfy the new contract, it may be able to make a direct award under Direct Award Process C, but this is subject to financial and other limits. This ability to 'roll over' contracts has been much discussed in advance of publication of the PSR. It will be interesting to see how frequently it is used.

The PSR also sets out a 'most suitable provider process'. This may be used if the commissioner believes that it can identify the provider that is most suitable without the need for a competitive process and believes that the other specified criteria are satisfied.

In addition to the award processes set out above, a competitive process does still exist under the PSR, and this must be used by commissioners in certain circumstances, including when they wish to conclude a framework agreement.

How can decisions be challenged?

 Under the PSR, the review process involves two levels. In the first instance, a bidder can make representations to the commissioner within a set time period. When reviewing decisions, where possible, the commissioner should ensure that an individual not involved in the original decision undertakes the review, however, (worryingly) this is not mandatory.

If a bidder is unsatisfied with a commissioner's response to their representations, they can make a request for the involvement of the PSR review panel within a set time period. The review panel has been established to provide independent expert advice to commissioners. The panel may consider the commissioner's compliance with the PSR and give (and publish) advice to the commissioner. The commissioner can then choose to make a further decision to replace its previous one.

If a bidder remains unhappy with the commissioner's decision after exhausting the review process, it may need to consider judicial review, potentially on an urgent basis.

Given the strict time limits for raising any review request, it is essential that any bidder with concerns about a procurement process seeks early specialist legal advice.

If you intend to bid for healthcare contracts in future, you will need to keep on top of the new rules and guidance as and when they come into force.  We will be rolling out training to healthcare organisations in relation to the PSR and new procurement regime in the coming months.

We are happy to discuss the implications of the PSR for your organisation or any concerns you may have about a specific procurement process, including your options for challenge, please contact Rachel Crean in our Healthcare team on 07387 025 973, or Stephanie Rickard in our Procurement team on 07384 251 896. Alternatively, please complete the form below.

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