Procurement in a Nutshell: Provision of a Financial managed services, DRAR and Caretrack Licences for AACH
6th March, 2026
One of the first legal challenges under the new Procurement Act 2023 has emerged. The challenge relates to NHS Dorset Integrated Care Board (ICB's) proposed award of a software contract.
The proposed contract has a fixed two-year term and a total value of £755,864 inclusive of VAT. The proposed supplier is Xyla and the ICB published a transparency notice on the Find a Tender Service on 8 December 2025.
The Transparency Notice
ICB appear to rely on the ‘switching to direct award’ provisions in section 43 of the Procurement Act 2023 (PA 2023). Section 43 PA 2023 outlines that a contracting authority may award a public contract directly to a supplier if:
- The authority has invited suppliers to submit tenders,
- It has not received suitable tenders, and
- It considers under section 19 it is not possible in the circumstances.
Section 19 PA 2023 states a contracting authority may award a public contract to the supplier that submits the most advantageous tender in a competitive tendering process.
Direct award justification
The tender justification is as follows:
“Competitive procedure abandoned and Direct Award to incumbent provider approved as this approach will provide NHS Dorset with the flexibility to align its future digital solution with wider Cluster arrangements, supporting long-term strategic objectives, productivity, and efficiency gains in line with the NHS 10 Year Plan and ICB cluster blueprint. Awarding a contract as a result of the current procurement would not now be feasible. Delays in the process and decision-making mean it is no longer possible to mobilise and implement a new system by 31 March 2026, when the current contract expires”.
It is notable that there is no reasoning as to why the authority considers that it received no suitable tenders as described in section 43. The Procurement Regulations 2024 require the reasoning to be set out in the Transparency Notice. The Notice merely says that the procurement was abandoned, which seems a little light for the purposes of the Regulations.
Challenge
MCB Software Services Limited has submitted a legal challenge that prevents the direct award from progressing. While details of this challenge are not yet available, it will be interesting to see whether the new Transparency Notice regime for direct award under the Procurement Act 2023 will result in more such awards being subject to legal challenge.
You can access the Notice here.
For further information please contact Melanie Pears or Tim Care in our Public Sector team.
Procurement and public law update
Our in-person Procurement and Public Law Update covers the new procurement rules and their increased transparency requirements.
This seminar will look at what those changes have meant in practice since both the new Act and the new NHS regime came into force. We will give practical tips on how to manage procurements now and how to deal with the risks of challenge when the timescales are so tight.
Register here to join this free session with procurement law experts Tim Care and Matthew Brady.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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