Procurement in a Nutshell – Provider Selection Regime: Independent Panel: Decision CR00026-25

To access the Panel’s full decision please click here.

Introduction

The Provider Selection Regime (PSR), set out in the Health Care Services (Provider Selection Regime) Regulations 2023, came into force on the 1^st 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 24^th 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.

Eligibility

The Panel’s eligibility criteria outlines seven conditions that must be met for a case to be eligible for acceptance. These are as follows.

1. The relevant authority intends to make an award under Direct Award Process C, the Most Suitable Provider Process, or the Competitive Process;
2. The request comes from a provider that might otherwise have been a provider of the services to which the contract relates;
3. Following the provider’s representations the relevant authority has conducted a review of its original decision and has decided to enter the contract or conclude the framework agreement as originally intended;
4. The request has been made in writing within 5 working days of the provider being notified of the decision by the relevant authority;
5. The provider has set out why it believes the relevant authority has failed to apply the regime correctly;
6. The provider has submitted all of the necessary supporting information for the Panel to carry out its review; and
7. The representations are not considered by the Panel to be trivial, vexatious, or an abuse of the Panel’s procedures.

The Panel considered two potential barriers to Capital’s eligibility:

• Capital’s status as a subcontractor; and
• Capital’s services potentially falling outside the PSR’s definition of “relevant health care services”.

Under Regulation 12(3) of the PSR Regulations, “any provider of the services to which the contract relates…may make representations”. Regulation 2 defines a ‘provider’ as “a person who provides, or offers to provide, relevant health care services“.

These provisions could be construed as excluding those providers who do not provide health care services from making representations to the Panel. However, the Panel cited Regulation 3(5) which states that “where a relevant authority procures relevant health care services as part of a mixed procurement, the term ‘relevant health care services’…includes any goods or services procured together with those relevant health care services”.

Accordingly, it was the Panel’s view that the term ‘provider’, in the context of a mixed contract,  includes all providers that supply (or offer to supply) the services to which the contract relates.

With regards to whether Capital, as a sub-contractor, qualifies as a ‘provider’ the Panel held that Regulation 12(3) does not require that a provider be capable of delivering all services under the contract to be able to make representations. As a result, the Panel concluded that providers who provide “some” of the services (i.e. subcontractors) fall within the scope of “providers” under the PSR for the purposes of making representations.

Stay up to date with:

• Trending Topics
• Latest Insights
• Upcoming Events
• Company Updates

Follow us on LinkedIn

Take Me There

Prioritisation

Despite meeting the eligibility criteria, Capital’s request was not accepted for review due to the Panel’s prioritisation policy.

Originally, the Panel indicated that it would assess prioritisation concerns when handling ten or more cases. However, the Panel has now revised this threshold, considering itself to be approaching full capacity with four or more cases under review. At the time of Capital’s request, the Panel was handling four active cases, thus triggering a prioritisation assessment.

The Panel’s prioritisation framework focuses on the following (among others):

• Potential benefit to patients from the Panel’s advice;
• Assistance to relevant authorities in complying with PSR Regulations;
• Contribution to future interpretation and use of PSR Regulations;
• Materiality of the authority’s decision on the provider and/or the authority itself; and
• Proportionality — ensuring the effort to deliver advice is justified by the potential impact

In Capital’s case, the Panel considered the service in question to be relatively small-scale, thereby limiting the wider patient impact of any Panel intervention.

While acknowledging that Sussex ICB’s decision could materially affect Capital’s operations, the fact that Capital remained a subcontractor in the awarded contract, albeit with reduced scope, mitigated the overall impact.

In the Panel’s view, given the limited impact on both patients and Capita as a sub-contractor, as well as the Panel’s stretched capacity, allocating resources to review the challenge was disproportionate.

What does this mean?

The Panel confirmed that subcontractors named within a bid for a mixed procurement are eligible to challenge provider selection decisions. This applies even where the subcontractor delivers only a portion of the services under the contract. Contracting authorities should, therefore, expect that subcontractors involved in service delivery—whether healthcare or ancillary services—may raise formal representations.

Furthermore, while the Panel initially indicated it would apply its prioritisation criteria when managing ten or more cases, this threshold has now decreased to only four active cases. This lower threshold means that many eligible cases may not proceed if they do not present issues of significant sector-wide impact.

Given that the Panel’s advisory role is limited, relevant authorities must ensure that their procurement processes are fully compliant with the PSR and that internal review procedures are transparent, defensible, and well-documented. To reduce the risk of legal challenge, authorities should engage proactively with both lead providers and subcontractors during and after the procurement process.

For further information please contact Melanie Pears or Tim Care in our Public Sector Team.