• National NHS logistics tender documents published
  • Contract worth up to £730m
  • Service is part of Department of Health’s new procurement model

Organisations are set to bid for a contract worth nearly three quarters of a billion pounds after the Department of Health published a tender as part of its new national procurement model.

The contract is for the provision of a logistics service to the NHS, and is the penultimate invitation to tender issued under the DH’s “Future Operating Model” for procurement.

Worth up to £730m over five years, the logistics service is the largest of the five contracts published so far by the DH for the various elements of the model.

It will replace part of the contract for the NHS Supply Chain held between the NHS Business Services Authority (BSA) and DHL, which expires in autumn next year.

Under the new contract the logistics provider will:

  • Manage existing logistics services including warehouses, transport, inventory, customer services, and site facilities;
  • Provide “in-bound logistics and inter-depot trunking service” at a site to be decided by the winning bidder and the BSA;
  • Provide support for an expansion of logistics services to meet “projected demand increases”.

In addition, the winning bidder must provide delivery services for continence products to residential homes, care homes, domestic premises, and any NHS-funded providers of community healthcare services.

The contract is scheduled to last for three years, with the potential to twice extend on a 12-month basis.

In the tender documents it is said the BSA “welcomes tenders from potential providers collaborating as a group of economic operators or sub-contracting elements of their obligations”.

Tenders must be submitted by 9 October, and intention to award notices will be issued in late February.

The contract is scheduled to go live on 1 October next year, as the NHS Supply Chain contract formally ends on 31 September.

Tenders for new contracts have been published for all but one of the other elements of the FOM.

The other elements are the 11 procurement category towers (worth up to £190m in total), which have been separated into two tranches (medical and non-medical), and ICT systems and services (worth up to £250m).

In addition consultants EY will be paid up to £20m to help set up the body which will oversee the model and liaise with NHS trusts, known as the “intelligent client co-ordinator”.

The tender for the final segment of the Future Operating Model, transactional services, will be published around November.

The first procurement category tower to go live is “office solutions”, which will be run by the Crown Commercial Service.

Winning bidders for the ten other towers have not yet been named by the DH. The DH has not publicly confirmed the identities of any bidders, but HSJ has reported that an academic health science network is among them 

In July Jim Craig, deputy director of the DH’s procurement transformation programme, said the scheme was running ahead of its savings plan.

The DH hopes more than £600m can be saved every year through the Future Operating Model by increasing the amount of centrally-purchased goods and services within the NHS from 40 per cent to 80 per cent.

Lord Carter backed the DH’s programme that committed the acute sector to saving 10 per cent of non-pay costs by April 2018.