Analysis: Increase in procurement and competition challenges

Experts say the number of procurement and competition challenges is increasing as NHS organisations become more familiar with the regulations introduced in April last year. 

Andrew Taylor, a former chief executive of the Co-operation and Competition Panel, said trusts were becoming more willing to take action. “I suspect it’s becoming more pronounced because the rules have been around for a little bit longer so people are more familiar with them and more comfortable with using them,” he said. He also suggested financial pressure could “drive” trusts into using the rules.

Mr Taylor cited a recent investigation by Monitor in Greater Manchester as an example of increased confidence in using the regulations. University Hospital of South Manchester and Stockport foundation trusts referred NHS England to the regulator over its approach towards the commissioning of specialist cancer services. The case was recently closed when NHS England said it would develop a new service specification.

Several providers are opting to mount legal challenges against commissioning decisions.

Procurement lawyer David Owens, a partner with Bevan Britten, said: “Certainly at the moment we are seeing a growth in activity in the procurement type challenges both from public sector and private sector organisations.”

The chief executive of one organisation bringing a legal challenge against a commissioning decision told HSJ that as there was only a 30 day window to lodge legal claims, and Monitor would not complete an investigation within that timeframe, legal challenges were the best approach.  

“There’s no other effective mechanism to challenge a procurement decision unless Monitor become much more rapid in their responses,” he said.

A spokesman for Monitor said it had received 166 enquiries about the choice and competition rules “from a wide range of different organisations” since last April.

“The vast majority of these enquiries are handled without launching a formal investigation or using our enforcement powers, only three formal cases have been undertaken by Monitor in respect of choice and competition since April 2013,” he said.

“Monitor’s decision on whether to take formal or informal action will take into account the individual circumstances and its decisions are based on what is in the interests of patients.”

Jeremy Roper, a partner in the health commercial team at DAC Beachcroft LLP, predicted increasing numbers of challenges. “There used to be a view - particularly for private providers - that they wouldn’t challenge because they would get a bad name in the NHS and that would make it more difficult for them to win work in the future,” he said.

While Monitor is currently only formally investigating one case it has recently closed several investigations into challenges brought by both private and NHS providers.

Mr Roper said the “vast majority” of challenges did not get to court or become the subject of a Monitor investigation because “either the concern was unjustified or, where it is justified, the procurers say they’ll go back a stage or they will re-run the procurement process.”

He added: “For those who are procuring it’s easier to go back a stage or even re-run the procurement in its entirety than find yourself at the wrong end of litigation or a Monitor investigation.”

In an HSJ survey conducted in January with 93 providers responding, 38 per cent said they might challenge a procurement process in the next six months.