Procurement in a Nutshell: Provider Selection Regime – Independent Panel: Decision CR00016-25
4th July, 2025
This Nutshell discusses the Panel's assessment of Humber and North Yorkshire Integrated Care Board's (the ICB) decision to award a contract utilising Direct Award Process C under the PSR.
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
The ICB sought to award a new five-year, £82 million, contract for Non-Emergency Patient Transport Services (the Services). The incumbent provider was Yorkshire Ambulance Service (YAS) who held three separate contracts for the Services, which were due to expire in March 2025.
The ICB opted to directly award a single new contract to YAS, consolidating the three existing contracts, using Direct Award Process C.
A relevant authority may utilise Direct Award Process C when it is of the view that the existing provider is satisfying its existing contract, will likely satisfy the new contract to a sufficient standard, and the proposed contracting arrangements are not changing considerably from the existing contract (Regulation 6(5)).
Following publication of the notice announcing ICB’s intention to award the new contract to YAS, EMED Group raised a challenge before the Standstill Period ended. The ICB affirmed its decision to award the contract to YAS despite the challenge, and so EMED made a referral to the Panel.
The Panel was asked to consider whether:
- The ICB’s decision to utilise Direct Award Process C was justified and thus legally compliant with the PSR;
- The notice of intention to award a new contract to YAS met the requirements under the PSR; and
- The ICB’s response to EMED’s request for information was sufficient.
The decision
Rationale for adopting Direct Award Process C
Direct Award Process C cannot be used if the new contract to be awarded represents a “considerable change” from existing contractual arrangements.
The threshold for ‘considerable change’ can be met when the proposed contract is ‘materially different in character’ to the existing arrangement (Regulation 6(10)).
The ICB failed to record its assessment of whether there were any material differences in the character of the new and existing contracts, and as a result, the Panel could not be assured that it was reasonable for the ICB to conclude that the considerable change threshold was not met and thus that Direct Award Process C could be used.
The Panel also noted that a Service Development Improvement Plan (the Plan) was to be implemented in the new contract as a means of driving improvement in the quality of the services. The ICB failed to provide a detailed description of the content of the Plan and so the Panel concluded that it was not possible for the ICB to carry out a comprehensive comparison between the new and existing contracts. Therefore, it was held that any assessment of the considerable change threshold by the ICB would have been insufficient.
Furthermore, an additional requirement that must be fulfilled in order to utilise Direct Award Process C is that incumbent provider must be satisfying the current contract and is likely to satisfy the proposed contract to a sufficient standard.
The ICB’s assessment of YAS’s performance failed to outline any rationale for the scores that were awarded to YAS. The Panel therefore found that the ICB’s assessment of YAS’s performance lacked sufficient critical analysis and was not proportionate to the value of the contract that was being awarded.
Moreover, the assessment, as well as lacking any rationale for the scores that were awarded, did not identify the specific areas which the ICB had reservations about YAS’s performance. Despite the ICB requiring YAS to provide an action plan to address any identified shortcomings in its performance evaluation, none were produced.
The Panel thereby concluded that it was not reasonable for the ICB to determine that YAS was satisfying the contract to a sufficient standard and was likely to continue to do so as mandated by Direct Award Process C.
Notice Requirements
Under Regulations 9(3) and 9(4), the ICB was required to publish a notice of intention to award a new contract to YAS using Direct Award Process C. This notice had to include the content set out in Schedule 3 of the PSR Regulations, which includes “a statement explaining the award decision makers’ reasons for selecting the chosen provider, with reference to the key criteria”.
The notice of intention published by the ICB stated that:
“NHS Humber and North Yorkshire ICB has conducted an assessment of the Provider against the stated Basic Selection Criteria and Key Criteria and considers that the existing provider is satisfying its current existing contract, will likely satisfy the new contract to a sufficient standard, and the proposed contracting arrangements are not changing considerably”.
The Panel concluded that the ICB’s statement explaining its reasons for selecting YAS simply re-stated the relevant regulatory provisions. The Panel’s view was that this is not sufficient to meet the requirements of Regulations 9(3) and 9(4) (and the ICB was therefore in breach of the PSR) as it does not constitute an explanation of the reasons for the ICB’s decision.
Request for Information
Regulation 12(4) requires that where a relevant authority receives representations it must provide promptly any information requested by an aggrieved provider where the relevant authority has a duty to record that information under Regulation 24.
The ICB, in responding to EMED’s information request, refused to provide any of the requested information on the grounds that this information would “prejudice legitimate commercial interests … and prejudice fair competition between providers” (Regulation 12(5)).
The Panel noted that much of the information requested by EMED fell within the scope of the records that the ICB is required to keep under Regulation 24. For example, EMED requested information on “how the assessment of the successful provider against the key criteria was made and the reasons for these decisions”, which in the Panel’s view, corresponds to the requirement that relevant authorities keep a record of “the decision-making process followed”.
The Panel concluded that the ICB, in not providing EMED with any information where it has a duty to record that information under Regulation 24, had gone beyond the exception in Regulation 12(5) and was thus in breach.
The Panel concluded that the breaches identified could have materially impacted the provider selection outcome. As such, the Panel advised that the ICB return to an earlier stage in the procurement process and reassess eligibility for Direct Award Process C with a robust analysis of:
- The considerable change threshold; and
- YAS’s actual and likely performance.
What does this mean?
Relevant authorities must ensure thorough documentation of decision-making, clearly recording reasons for selecting a provider, with specific reference to the key criteria. Published notices must go beyond restating regulations and must include meaningful explanations of the basis for award decisions.
Furthermore, the level of performance assessment, under Direct Award Process C, must be proportionate to the size and complexity of the contract. For significant contracts, generic evaluations are insufficient.
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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