ICB told to scrap contract after string of errors

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Panel tells SSOT ICB to scrap contract award or risk further challenge
Review comes after firm complained ICB awarded contract to MPFT unfairly
First panel review of where a provider has used Most Suitable Provider process

An integrated care board made several errors in the way it contracted an NHS trust to manage Continuing Care services without a full competition, regulators have found.

The Independent Patient Choice and Procurement Panel recommended Staffordshire and Stoke-on-Trent ICB scrap the arrangement in a judgement issued this week.

In June, the ICB selected Midlands Partnership University Foundation Trust to run some of its “all age continuing care services”.

Its continuing care work was before largely delivered by Midlands and Lancashire Commissioning Support Unit. But — with a background of tight finances — it decided to bring some of it in-house, and newly contract other parts of the “gateway” services, which involve assessment and arranging care packages.

The ICB said it had used the “most suitable provider” process to award the contract. Under the “provider selection regime” introduced this year, the MSP approach means a commissioner “assesses the potential providers and chooses, taking into account the key criteria and applying the basic selection criteria, the most suitable provider”, but “without running a competitive process”.

In a decision published yesterday, the panel outlined a string of what it said were errors in how the contract was awarded. This included both its decision to apply the provider selection regime in the first place; and its decision to use the MSP approach; and how it was then applied (see box below and full judgement for details).

The panel said the ICB’s breaches of the procurement regulations “had a material effect on SSOT’s selection of a provider”, and told it to “abandon the current provider selection process”.

Its judgements are not binding, but if a commissioner doesn’t act on them it is likely to be open to legal challenge.

The PSR regime – a set of rules for procuring NHS healthcare services – came into force on 1 January, and the panel was set up under the previous government to oversee how it is used. Healthcare-specific regulation of procurement and competition, previously carried out by Monitor, was gradually wound down then scrapped over previous years.

The panel’s judgement on the SSOT ICB case said: “Many commissioners are still gaining experience in using the MSP process, and the panel hopes that this report will assist by providing additional clarity in areas where there may be uncertainty.”

A spokesperson for SSOT said the ICB was reviewing the panel’s findings and could not comment further due to legal and governance processes.

The procurement and panel’s findings

In early May, the ICB invited interested providers to express interest, and received nine submissions. On 28 May, its assessment panel decided MPFT was the only provider to pass all its basic criteria. All other interested providers were eliminated for not passing the basic criteria.

Xyla, part of Acacium Group, was one of the unsuccessful providers, and it complained to the IPCPP on 2 August — the first time the panel has been asked to review the awarding of a contract using the ”most suitable provider” approach.

SSOT ICB said Xyla, an integrated healthcare company, failed in its response to the basic criteria in answering a question about its Care Quality Commission registration.

But after the 28 May meeting, SSOT’s assessment panel discussed with its legal advisers plans to request further information from MPFT, and was advised Xyla should be reinstated as it had only failed to meet basic criteria as a result of a “technical error”.

On 7 June, the ICB’s assessment panel proceeded with requesting further information from MPFT and on 11 June it met and considered Xyla’s response to its key criteria.

On 18 June, the assessment panel reviewed the further information from MPFT and on 20 June, on the panel’s recommendation, SSOT approved the award of the “all age continuing care” contract to MPFT.

In its review, the IPCPP considered three main issues: the applicability of the PSR regulations to the AACC service; whether SSOT’s decision to use the MSP process complied with the PSR regulations; and whether SSOT’s conduct of the MSP process complied with its obligations under the PSR regulations to act transparently, fairly and proportionately.

On the first issue, the panel said it had “doubts” about whether the PSR regulations are applicable to the AACC. But it said it was not necessary to issue a finding on this aspect because of other findings in its review.

With regards to the second issue, the panel found that SSOT did not breach its obligation to act with a view to improving the efficiency in the provision of services by using the MSP process to select a provider for the AACC service.

SSOT did not take into account likely providers and all relevant information in its initial decision to use the MSP process nor did it do so at any point thereafter while conducting the MSP process.

As a result, SSOT’s decision to use the MSP process was in breach of the PSR regulations.

On the third point, the panel found that SSOT did not act transparently, fairly or proportionately in carrying out the MSP process to select a provider for the AACC service.

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