Mark Fitzgibbon explains how the new Public Contracts Regulations are affecting NHS professionals involved in procurement
The Public Contracts Regulations 2015 were finally implemented on 26 February.
This article outlines the key changes for NHS professionals who are involved in procurement.
Part A and B
The distinction between part A and part B services has disappeared, replaced by a new classification of “social and other specific services”.
Where such services are being procured above a value of £625,050, a contract notice must be used to advertise the opportunity but a “light touch” regime will apply.
Equally significant is the removal of the catch all “other services” category. The presumption is that services that do not fall within the light touch regime will be subject to the full scope of the regulations.
The commissioning of healthcare services for the purpose of the NHS has been excluded from the 2015 regulations until 18 April 2016, although this does not apply to non-health services procurements. This creates a two tier system in the short term.
The 2015 regulations clarify that the higher “subcentral contracting authority” threshold of £172,514 should be applied by foundation trusts in public services procurements. This gives FTs slightly more flexibility than NHS trusts, which continue to apply the threshold of £111,676.
The “innovation partnership procedure” is introduced for use where an authority has identified a need for an innovative product, service or works that cannot be met by purchasing products, services or works that are already available on the market.
A new “competitive procedure with negotiation” is implemented, which is similar to the former “negotiated procedure”. It carries with it pre-conditions for use that are now aligned with those for the “competitive dialogue procedure”.
Codification of case law
Various concepts that were previously covered by case law have now been included within the regulations. These include Teckal (the “in-house exception”), Pressetext (material variations to a contract) and Hamburg Waste (public/public shared service arrangements).
Turnover threshold limit
To allow greater access to public contracts for small and medium sized enterprises, a cap on turnover is introduced as a selection criterion: an authority cannot require a tenderer to have a minimum yearly turnover that exceeds twice the estimated contract value (over its lifetime).
What has stayed the same?
The processes for other procurement procedures are largely unaltered, as is the remedies regime, which remains as it was since its introduction in 2009.
The changes are intended to make procurement simpler and quicker, which ought to reduce the risk of challenges and promote best practice.
Mark Fitzgibbon is a partner at Hill Dickinson