The NHS Provider Selection Regime (PSR)
The regime aims to create a more flexible and collaborative approach to procurement, focusing on quality, value, and the ability to meet the needs of the local population.
Under the PSR, NHS organisations, such as NHS England, Integrated Care Boards (ICBs), and NHS Trusts, will have more flexibility in how they procure healthcare services. The regime introduces three main procurement processes:
- Direct award: NHS organisations can award contracts directly to a supplier without competition, if they can demonstrate that the supplier is the most suitable provider.
- Competitive award: NHS organisations can run a competitive procurement process to select the most suitable provider.
- Direct award with call for competition: NHS organisations can award a contract directly to a supplier, but must also publish a notice inviting other suppliers to compete for the contract.
When making decisions, authorities must consider five key criteria:
- Quality and innovation
- Value
- Integration and collaboration
- Access, inequalities, and choice
- Service sustainability and social value
Transparency is a cornerstone of the PSR. Authorities must publish notices about their decisions and maintain records of the process. This openness enables proper scrutiny and accountability. The PSR applies to healthcare and public health services arranged by relevant authorities, regardless of the provider type. It does not cover goods or non-healthcare services unless they are part of a mixed procurement.
By providing more flexibility in provider selection, the PSR aims to support the development of stable partnerships and integrated care delivery. This aligns with the broader goals of transforming health and care services to meet increasing demand, deliver better outcomes, and ensure financial sustainability.
Suppliers looking to provide healthcare services to the NHS in England will need to adapt to the new Provider Selection Regime.
Key points for suppliers to consider include:
- Demonstrate value: Suppliers should focus on demonstrating how their services can provide value for money, improve quality, and meet the specific needs of the NHS organisation and the local population.
- Align with selection criteria: Suppliers should ensure that their offerings align with the selection criteria used by NHS organisations under the PSR, such as quality, value, integration, and patient choice.
- Stay informed: Suppliers should monitor the Find a Tender Service (FTS) for contract notices and award notices to stay informed about potential opportunities.
- Be prepared for different procurement processes: Suppliers should be prepared to engage in different procurement processes, such as direct awards, competitive awards, and direct awards with call for competition.
- Know your rights: Suppliers should be aware of their rights to challenge procurement decisions if they believe the PSR has not been followed correctly.
Provider Selection Regime: Practical Tips
Key Criteria and Decision-Making
The PSR emphasises the importance of five key criteria in decision-making: quality and innovation, value, integration and collaboration, patient access and inequalities, and social value. Relevant authorities must consider these criteria when selecting providers, with the relative importance determined by the specific circumstances and objectives of the procurement.
Transparency and Record-Keeping
Transparency is a core principle of the PSR. Relevant authorities must publish notices on the Find a Tender Service (FTS) portal at various stages of the procurement process, including contract award notices and annual summaries of their PSR application. They must also keep internal records of decisions and decision-making processes, and publish any conflicts of interest and how they were managed.
Reviewing Decisions and Challenges
Providers can make representations during the standstill period if they believe the PSR has been misapplied in direct award process C, the most suitable provider process, or the competitive process. Unsatisfied providers may submit a representation to the PSR Review Panel. Any PSR decision may potentially be challenged via judicial review on grounds such as incorrect application of regulations, improper management of conflicts of interest, or deviations from procurement documents in the competitive process.
Framework Agreements and Contract Modifications
Framework agreements must be concluded using the competitive process and are limited to four years, with exceptions for longer terms justified by the subject matter. Contracts can be awarded under a framework agreement using the competitive process or without competition, as provided in the framework's terms and conditions.
The PSR allows for contract modifications under certain circumstances, such as when clearly provided for in the original contract or when necessitated by external factors beyond the control of the relevant authority and the provider. Relevant authorities must comply with PSR provisions and specific contract terms when extending or modifying contracts.
Implications for Commissioners and Providers
The PSR represents a significant shift in how healthcare services are procured in England. Commissioners (relevant authorities) must familiarise themselves with the new rules, ensure robust record-keeping and transparency practices, and make well-justified decisions based on the key criteria and specific circumstances of each procurement.
Providers should proactively engage with commissioners to showcase their capabilities, demonstrate alignment with the key criteria, and build collaborative relationships. They should also be aware of the opportunities to challenge procurement decisions and the grounds for doing so.
During the transition period, both commissioners and providers may face challenges and complexities, such as the need for staff training and the handling of procurements that span the transition date. Thorough preparation, planning, and seeking legal advice when necessary can help mitigate these challenges.
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The Provider Selection Regime applies to a wide range of health care services, including:
- Hospital services (surgical, medical, gynaecological, obstetrical, rehabilitation, psychiatric, etc.)
- Medical practice services (general practitioners, specialists, dental, etc.)
- Miscellaneous health services (midwives, nurses, home medical treatment, paramedical, ambulance, residential health facilities, etc.)
- Services provided by medical laboratories, blood banks, sperm banks, and transplant organ banks
- Medical analysis, imaging, and optician services
- Pharmacy services (excluding community pharmacy services under specific regulations)
- Community health services delivered to individuals
- Family-planning services provided to individuals for sexual and reproductive health support
- Rehabilitation services for individuals tackling substance misuse or mental/physical health issues
Tips for Providers to Win Contracts through PSR
Understand the PSR Framework
- Familiarise yourself with the statutory guidance, selection processes, and key criteria.
- Highlight how your services meet the PSR’s focus areas (e.g., integration, value, and social impact).
Prepare for Transparency and Record-Keeping:
- Ensure clear documentation of how your services align with the PSR’s objectives.
- Maintain compliance records that could be reviewed during the standstill period.
Focus on Key Criteria:
- Emphasise quality, innovation, and social value in your proposals.
- Address how your services will reduce health inequalities and improve access.
Engage with Relevant Authorities:
- Monitor opportunities through NHS England resources such as the Find a Tender Service (FTS).
- Participate in webinars or outreach programmes to align with procurement expectations.
Strategise for Non-Competitive Awards:
- Demonstrate unique capabilities or continuity benefits for direct award scenarios.
- Position your organisation as the “most suitable provider” by aligning with PSR priorities.
Leverage Mixed Procurement Opportunities:
- If applicable, combine in-scope healthcare services with other services or goods under one contract, ensuring alignment with PSR principles.
Adapt to Transitional Arrangements:
- Understand the implications for ongoing contracts initiated under previous regulations.
- Highlight how your offerings fit within both existing frameworks and new PSR processes.
Take a look at Tendering Steps for NHS Suppliers.
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