Procurement in a Nutshell – Provider Selection Regime: Independent Panel Decision
2nd May, 2025
This Nutshell will evaluate the Panel's decision relating to the award of a contract by a relevant authority utilising the competitive process.
To access the full decision please click here.
The Provider Selection Regime (PSR), set out in the Health Care Services (Provider Selection Regime) Regulations 2023, came into force on the 1st January 2024.
The PSR removes the procurement of health care services from the scope of the Procurement Act 2023, which came into effect from the 24th February 2025.
The PSR applies to NHS England, Integrated Care Boards, NHS Trusts, NHS Foundation Trusts, local authorities and combined authorities when they are procuring relevant healthcare services.
Background
The Independent Procurement Panel (the Panel) provides advice under the PSR to relevant authorities in circumstances where a provider is aggrieved by an award decision, and the provider believes the PSR Regulations have not been complied with.
The role of the Panel is to provide independent expert advice (as referred to in Regulation 23 of the PSR Regulations) and publish this advice for each review it undertakes.
Relevant authorities should note that, while the advice of the Panel is not legally binding, it is highly persuasive.
The Facts
Lancashire and South Cumbria NHS Foundation Trust (the Trust) asked the Panel to review NHS England North West’s (NHSE) decision to award the Lot 1 contract for Liaison & Diversion Services to Practice Plus Group Health (PPG). The Trust had been the incumbent provider of the services under a contract due to expire on 31 March 2025. NHSE decided to re-procure these services under the PSR, splitting the contract into three separate lots.
Following a competitive process, three bids were received for Lot 1. The Trust was ranked third, and PPG was selected as the preferred provider. As a result, the Trust challenged various aspects of the procurement process. The issues raise by the Trust are detailed below.
The Mobilisation Question:
The Trust, as incumbent, was required to address not only how it would mobilise the new service, but also how it would exit its current service. It argued that this imposed an unfair additional burden compared to other bidders, limiting its ability to focus on future mobilisation plans within the word limit.
TUPE Staffing Information:
The Trust further contended that NHSE failed to share revised staffing (TUPE) information with all bidders. The Trust had submitted updated TUPE data during the process, revealing additional staff costs not originally disclosed. NHSE chose not to issue the updated information to bidders, believing the new data was unreliable, which the Trust argued undermined a fair competition.
Evaluation of Social Value Responses:
The Trust also challenged the evaluation of its answers and those of PPG, alleging inconsistent scoring particularly on questions concerning information governance and social value. It believed PPG had received unjustifiably higher marks despite identified weaknesses in its responses.
Communication of Outcomes:
The Trust raised concerns about the transparency of NHSE’s feedback, arguing that NHSE failed to provide full evaluation records, offered misleading summaries of why PPG had succeeded, and denied the Trust the opportunity to clarify its concerns during the standstill period.
Service Fragmentation:
Finally, the Trust objected to NHSE’s decision to split the existing integrated service into three lots, raising concerns about the risk of service fragmentation and loss of continuity of care.
The Decision
The Mobilisation Question:
The Panel found that the wording of the tender question led LSCFT reasonably to believe that additional requirements were imposed on it. This inequity could have constrained LSCFT’s response within the set word count and adversely impacted its scoring. The Panel concluded that NHSE NW had breached its duty of fairness under the PSR.
TUPE Staffing Information:
The Panel agreed with the Trust that by failing to share the corrected TUPE data, NHSE denied all bidders a fair and transparent understanding of the staffing liabilities they would inherit, amounting to a breach of the PSR’s requirements for fairness and transparency.
Evaluation of Social Value Responses:
The Panel reviewed the evaluation process and noted that NHSE had used a structured multi-agency panel approach, with clear scoring guidance. While feedback comments did acknowledge some limitations in PPG’s answers, the Panel found that the scores awarded were reasonable and within the evaluators’ margin of discretion. Therefore, no breach of the PSR regulations occurred in these respects.
Communication of Outcomes:
The Panel identified multiple breaches by NHSE in its communication with the Trust:
- The Tender Outcome Letter inaccurately summarised why PPG had succeeded, omitting significant negative evaluator comments and thereby presenting a misleading picture. This breached Regulation 11(8) requiring transparency about reasons for success or failure;
- NHSE failed to provide the Evaluation Panel’s final agreed feedback, breaching Regulation 12(4)(b) and Regulation 24, which impose obligations to share recorded decision-making information; and
- NHSE also denied the Trust a proper opportunity to clarify its representations during the standstill period, contrary to Regulation 12(4)(a), misconstruing its duty to actively engage with and consider further clarifications where appropriate.
Service Fragmentation:
The Panel found that NHSE had undertaken appropriate market engagement and had valid reasons to separate the lots, including funding differences and service developments. There was no breach of the PSR’s duties to act to secure service user needs, improve quality, and enhance efficiency.
The Panel concluded that the breaches discussed above were material, and ultimately affected the final contract award decision.
The Panel advised that NHSE, at a minimum, invite the three original bidders to resubmit proposals, revising the mobilisation question and providing updated TUPE information. Alternatively, the Panel stated that NHSE could abandon the procurement altogether.
What does this mean?
The Panel’s findings highlight that contracting authorities must take particular care when designing tender questions, especially where incumbent providers may be placed at a disadvantage.
Further, where updated material information comes to light during a procurement, contracting authorities must ensure it is shared equally with all participants. While the Panel stressed that it is for bidders to undertake due diligence, authorities must not inadvertently mislead or withhold material facts that could shape bid strategies or pricing.
The decision also underlines the critical importance of providing comprehensive and faithful feedback to unsuccessful bidders. Outcome letters must not selectively omit evaluator concerns or present an incomplete picture of the reasons for awarding the contract. Furthermore, when bidders raise concerns during a standstill period, authorities must engage meaningfully and afford a proper opportunity for clarification.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team
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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