Multinational companies including G4S and arms manufacturer Lockheed Martin are among those that have expressed interest in a £1bn contract to run GP support services outsourced by NHS England, HSJ has learned.
NHS England issued a contract tender notice last week appealing for bidders to run primary care support services. The authority decided to outsource the functions last summer.
With a contract value of £1bn over 10 years, the tender is one of the highest value single deals ever offered by the NHS.
HSJ has learned that NHS England hosted a meeting in recent weeks for organisations interested in bidding for the contract. It was not attended by a single NHS owned organisation.
However, among the companies that did attend were the weapons manufacturer Lockheed Martin, which makes the F-35 Joint Strike Fighter and the Royal Navy’s Merlin maritime helicopter, as well as supplying what their website describes as “ingenious IT solutions” to public sector clients including the Welsh government, the Metropolitan Police Service, and Golden Jubilee National Hospital in Scotland.
Other organisations that attended the meeting included Anglian Community Enterprise, an employee owned social enterprise formed out of the former North East Essex Primary Care Trust, along with KPMG, Serco, and US based law firm DLA Piper.
Another firm also known to have attended is private security giant G4S, whose handling of the 2012 London Olympics security contract attracted severe criticism.
HSJ understands that NHS commissioning support units, which specialise in back office support services for NHS commissioners, will not be able to bid for the contract. This is because CSUs are currently part of NHS England, so the decision to award the contract to them could be challenged under procurement law once the units become autonomous in 2016.
NHS England’s tender notice states that, following a pre-qualification questionnaire, either three or four bidders will be invited to negotiate for the final contract.
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The £1bn 10 year deal is worth more than the current running cost of the services, which employ around 1,600 people and cost £92m in 2013-14. The cost is forecast to reduce to around £85m a year by the end of 2014-15, and NHS England has said it wants it to reduce to £60m in 2015-16. Bidders have been told they will have to invest in new technology and close offices. Sources believe the winning firm will also have to bear significant redundancy costs.
The contract will be awarded in March next year.
The services going out to tender include back office functions which are essential to the functioning of NHS primary care. They include maintaining practice lists, administrating prescription payments, pensions and medical records, and running screening programmes.
Unison national officer Nick Bradley said: “This huge privatisation of essential backroom services to the NHS is an absolute disgrace. For several months the staff and the trade unions that represented them were involved in detailed discussions to modernise and reorganise these services.
“The contract has been advertised in a way that means that no NHS body can bid for the work… Only a huge private company able to raise funds or have funds to pay for redundancies and reorganisation can possibly bid for the work.”
NHS England has been approached for comment.
Update 20 November 10am
NHS England have responded. A spokeswoman said it would be “inappropriate” to issue a full list of attendees at the bidders meeting, which took place in October, and that they will not know whether there have been any expressions of interest from NHS organisations until the pre qualification questionnaire stage of the tender has closed.
The spokeswoman added: “For the OJEU advert we have to give an estimate of the total contract value. This represents an upper ceiling. As we are going out as a framework, we need to include in this estimate not only anticipated spend by NHS England but also potential spend from organisations that may be interested in the framework in the future. If no other organisation wants to join the framework then it will clearly be less than £100 million a year. The estimate represents a maximum value of the contract and does not commit NHS England to spend to that level.”