• Last of five contracts published for future NHS procurement model
  • Contract worth up to £47m
  • Winning bidder expected to work from NHS Supply Chain offices

Procurement leaders hope to improve the way the NHS handles transactions with a contract for financial management worth nearly £50m that has gone to the market.

The Department of Health, under its future operating model for NHS procurement, has published a tender for “transactional services” with an estimated value of £47.1m.

The contract is scheduled to last three years with an option to extend for a further two.

It is the fifth and final service within the future operating model for which a tender has been issued, as the DH prepares to replace NHS Supply Chain with a new procurement system.

NHS Supply Chain, run by DHL on behalf of the NHS Business Services Authority, will be dissolved at the end of September 2018.

Under the model, the procurement of everyday hospital consumables, common goods, high value healthcare consumables and capital items will be provided by organisations across 11 different categories.

The NHS spends £5.7bn annually on these services and goods, which do not include medicines, but only 40 per cent of this is channelled through NHS Supply Chain.

Through its procurement transformation programme, the DH hopes to improve this to 80 per cent.

The intention of aggregating spending in this way is to deliver savings worth £600m by 2021-22.

Most of the services covered in the transactional services contract are provided by DHL.

The services sought by DH include:

  • providing consolidated monthly invoices to the NHS;
  • cash and treasury management;
  • savings tracking and reporting;
  • administration, configuration and improvement of financial systems; and
  • customer service for invoice queries.

The supplier must also “provide a flexible platform capable of dealing with increases in transactional activity in line with anticipated growth”, the tender documents said.

The DH expects the winning bidder to work from the current NHS Supply Chain locations in Alfreton, Normanton and Leeds.

These sites will be shared with other organisations that provide procurement services under the model. They will be managed by one of the other future operating model service providers.

A management body, being established by EY, will oversee the new procurement model, and tenders for logistics and IT services have been issued.

This body will also include “nurse advisers” who will provide clinical assurance on the products that the procurement organisations buy on behalf of the NHS.

The clinical assurance team was last week described as “the voice of clinicians” by Howard Blackith, the procurement transformation programme lead for the DH.

The only confirmed organisation to run one of the 11 procurement categories is Crown Commercial Service, which started buying office products for the NHS this month.

Winning bidders for the six medical categories are set to be announced this month.

HSJ has previously reported that DHL, NHS Collaborative Procurement Partnership and the Oxford academic health science network are involved with bids for these categories.

The transactional services contract is expected to be awarded on 23 March 2018.