The Health Care Services (Provider Selection Regime) Regulations 2023

Made: 6th December 2023

Coming into force: 1st January 2024

A draft of these Regulations was laid before Parliament in accordance with section 272(6)(zze)[^f00003] of the National Health Service Act 2006 and was approved by a resolution of each House of Parliament.

PART 1 — General

Citation, commencement, extent and territorial application

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• (1) These Regulations may be cited as the Health Care Services (Provider Selection Regime) Regulations 2023 and come into force on 1st January 2024.

• (2) These Regulations extend to England and Wales and apply in relation to England only.

Interpretation

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• (1) In these Regulations—

• “basic selection criteria” means the selection criteria determined by the relevant authority[^f00004] in accordance with regulation 19 and Schedule 16;

• “central digital platform” is the online system established by the Minister for the Cabinet Office and which may be accessed on www.gov.uk;

• “Competitive Process” means the process set out in regulation 11 for the award of a contract with a competition;

• “contract or framework award criteria” means the criteria on which the award of a contract, or conclusion of a framework agreement, is based;

• “CPV” means the Common Procurement Vocabulary, as adopted by Regulation (EC) No. 2195/2002 of the European Parliament and of the Council[^f00005];

• “debarment list” means the list kept under section 62 (debarment list) of the Procurement Act 2023;

• “Direct Award Process A” means the process set out in regulation 7 for the award of a contract without a competition;

• “Direct Award Process B” means the process set out in regulation 8 for the award of a contract without a competition;

• “Direct Award Process C” means the process set out in regulation 9 for the award of a contract without a competition;

• “excludable supplier” means a provider that would be an excludable supplier in accordance with sections 57 (meaning of excluded and excludable supplier) and 58 (considering whether a supplier is excluded or excludable) of the Procurement Act 2023, were the relevant authority the contracting authority, and the provider a supplier, under that Act and any references to an associated person omitted;

• “excluded supplier” means a provider that would be an excluded supplier in accordance with sections 57 and 58 of the Procurement Act 2023, were the relevant authority the contracting authority. and the provider a supplier, under that Act and any reference to an associated person omitted

• “existing provider”—means a provider with whom a relevant authority has a contract for the provision of relevant health care services which has not expired or otherwise been terminated; andin a case where the identity of a provider with whom a relevant authority has such a contract is expected to change due to succession into the position of provider following corporate changes including takeover, merger, acquisition or insolvency, includes the provider in its changed identity;

• “framework agreement” means an agreement between one or more relevant authorities and one or more providers concluded and operated in accordance with Part 3;

• “health-related services” has the same meaning as in section 13N of the National Health Service Act 2006[^f00006];

• “key criteria” means the criteria set out in regulation 5;

• “Most Suitable Provider Process” means the process set out in regulation 10 for the award of a contract without a competition;

• “procurement principles” means the principles in regulation 4;

• “provider” means a person who provides, or offers to provide, relevant health care services for the purposes of the health service[^f00007] in England;

• “relevant health care services” means health care services[^f00008] which fall within one or more of the CPV codes specified in the table in Schedule 1, to the extent described in that table (and see regulation 3(5));

• “social care services” has the same meaning as in section 13N of the National Health Service Act 2006;

• “standstill period” has the meaning given by regulation 12;

• ...

• (2) Nothing in these Regulations prevents the award of a contract to more than one provider, either jointly or otherwise.

Application

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• (1) These Regulations apply where a relevant authority procures relevant health care services for the purposes of the health service in England, whether alone or as part of a mixed procurement.

• (2) In this regulation, “mixed procurement” means the procurement of—

• (a) relevant health care services for the purposes of the health service in England, and

• (b) other goods or services that are procured together with those health care services,

where both the criteria in paragraph (3) are met.

• (3) The criteria are that—

• (a) the main subject-matter of the procurement is relevant health care services for the purposes of the health service in England; and

• (b) the relevant authority is of the view that the other goods or services could not reasonably be supplied under a separate contract.

• (4) For the purposes of the criteria in paragraph (3)—

• (a) the main subject-matter is determined by which of—

• (i) the estimated lifetime value of the relevant health care services in paragraph (2)(a); or

• (ii) the estimated lifetime value of the other goods or services in paragraph (2)(b),

is the higher;

• (b) a relevant authority may only determine that the other goods or services could not reasonably be supplied under a separate contract where the relevant authority is of the view that procuring the relevant health care services and the other goods and services separately would, or would be likely to, have a material adverse impact on the relevant authority’s ability to act in accordance with the procurement principles.

• (5) Where a relevant authority procures relevant health care services as part of a mixed procurement, the term “relevant health care services” in these Regulations, except this regulation, includes any goods or services procured together with those relevant health care services.

Procurement principles

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• (1) When procuring relevant health care services, a relevant authority must act—

• (a) with a view to—

• (i) securing the needs of the people who use the services,

• (ii) improving the quality of the services, and

• (iii) improving efficiency in the provision of the services;

• (b) transparently, fairly and proportionately.

• (2) When acting with a view to the matters in paragraph (1)(a), the relevant authority may consider the value of providing services in an integrated way, including with other health care services, health-related services or social care services.

Key criteria

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The key criteria are—

• (a) quality and innovation, that is the need to ensure good quality services and the need to support the potential for the development and implementation of new or significantly improved services or processes that will improve the delivery of health care or health outcomes,

• (b) value, that is the need to strive to achieve good value in terms of the balance of costs, overall benefits and the financial implications of a proposed contracting arrangement,

• (c) integration, collaboration and service sustainability, that is the extent to which services can be provided in—

• (i) an integrated way (including with other health care services, health-related services or social care services),

• (ii) a collaborative way (including with providers and with persons providing health-related services or social care services), and

• (iii) a sustainable way (which includes the stability of good quality health care services or service continuity of health care services),

so as to improve health outcomes,

• (d) improving access, reducing health inequalities and facilitating choice, that is ensuring accessibility to services and treatments for all eligible patients, improving health inequalities and ensuring that patients have choice in respect of their health care, and

• (e) social value, that is whether what is proposed might improve economic, social and environmental well-being in the geographical area relevant to a proposed contracting arrangement.

PART 2 — Procurement processes

Overview

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• (1) A relevant authority wishing to procure relevant health care services to which these Regulations apply must follow the appropriate process determined in accordance with this regulation.

• (2) This regulation is subject to regulations 13 (modification of contracts and framework agreements during their term), 15 (abandonment of, or repetition of steps in, a procurement) and 18 (contracts based on a framework agreement).

• (3) Where—

• (a) there is an existing provider of the relevant health care services to which the proposed contracting arrangements relate,

• (b) the relevant authority is satisfied that the relevant health care services to which the proposed contracting arrangements relate are capable of being provided only by the existing provider due to the nature of the relevant health care services, and

• (c) the procurement is not to conclude a framework agreement,

the relevant authority must follow Direct Award Process A.

• (4) Where—

• (a) the proposed contracting arrangements relate to relevant health care services in respect of which a patient is offered a choice of provider,

• (b) the number of providers is not restricted by the relevant authority,

• (c) the relevant authority will offer contracts to all providers to whom an award can be made because they meet all requirements in relation to the provision of the relevant health care services to patients,

• (d) the relevant authority has arrangements in place to enable providers to express an interest in providing the relevant health care services, and

• (e) the procurement is not to conclude a framework agreement,

the relevant authority must follow Direct Award Process B.

• (5) Where—

• (a) the relevant authority is not required to follow Direct Award Process A or Direct Award Process B,

• (b) the term of an existing contract is due to expire and the relevant authority proposes a new contract to replace that existing contract at the end of its term,

• (c) the considerable change threshold is not met (see paragraphs (10) to (12)),

• (d) the relevant authority is of the view that the existing provider is satisfying the existing contract and will likely satisfy the proposed contract to a sufficient standard, and

• (e) the procurement is not to conclude a framework agreement,

the relevant authority must follow one of Direct Award Process C, the Most Suitable Provider Process or the Competitive Process, such choice being at the discretion of the relevant authority.

• (6) Where—

• (a) the relevant authority is not required to follow Direct Award Process A or Direct Award Process B,

• (b) paragraph (5) does not apply,

• (c) the relevant authority is of the view, taking into account likely providers and all relevant information available to the relevant authority at the time, that it is likely to be able to identify the most suitable provider, and

• (d) the procurement is not to conclude a framework agreement,

the relevant authority must follow either the Most Suitable Provider Process or the Competitive Process, such choice being at the discretion of the relevant authority.

• (7) Where—

• (a) the relevant authority is not required to follow Direct Award Process A or Direct Award Process B, and

• (b) neither paragraph (5) nor (6) applies,

the relevant authority must follow the Competitive Process.

• (8) Where the procurement is to conclude a framework agreement, the relevant authority must follow the Competitive Process.

• (9) Where, having taken steps to follow a particular process chosen at its discretion in accordance with paragraph (5) or (6), the relevant authority decides that a different process would be more suitable, the relevant authority may decide to abandon the procurement in accordance with regulation 15 and follow a different process in accordance with paragraph (5) or (6).

• (10) Subject to paragraphs (11) and (12), the “considerable change threshold” in paragraph (5)(c) is met—

• (a) where the proposed contracting arrangements are materially different in character to the existing contract when that existing contract was entered into, or

• (b) where—

• (i) changes in the relevant health care services to which the proposed contracting arrangements relate (compared with the existing contract) are attributable to a decision of the relevant authority,

• (ii) the lifetime value of the proposed contracting arrangements is at least £500,000 higher than the lifetime value of the existing contract when that existing contract was entered into, and

• (iii) the lifetime value of the proposed contracting arrangements is at least 25% higher than the lifetime value of the existing contract when that existing contract was entered into.

• (11) The considerable change threshold is not met where—

• (a) paragraph (10)(a) applies solely as a result of a change in the identity of the provider due to succession into the position of provider following corporate changes including takeover, merger, acquisition or insolvency and the relevant authority is satisfied that the provider meets the basic selection criteria, and

• (b) paragraph (10)(b) does not apply.

• (12) The considerable change threshold is not met where—

• (a) paragraph (10)(a) does not apply, and

• (b) paragraph (10)(b) applies where the change between the existing and proposed contracting arrangements is in response to external factors beyond the control of the relevant authority and provider including, but not limited to, changes in patient or service user volume or changes in prices in accordance with a formula provided for in the contract documents.

Direct Award Process A

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• (1) Where the relevant authority follows Direct Award Process A, the process is that the relevant authority—

• (a) awards any contract without a competition, and

• (b) submits for publication on the central digital platform a notice of the award.

• (2) The notice referred to in paragraph (1)(b) must—

• (a) include the information set out in Schedule 2, and

• (b) be submitted for publication within 30 days of the contract being awarded.

Direct Award Process B

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• (1) Where the relevant authority follows Direct Award Process B, the process is that the relevant authority—

• (a) awards any contract without a competition, and

• (b) submits for publication on the central digital platform a notice of the award.

• (2) The notice referred to in paragraph (1)(b) must—

• (a) include the information set out in Schedule 2, and

• (b) be submitted for publication within 30 days of the contract being awarded.

Direct Award Process C

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• (1) Where the relevant authority follows Direct Award Process C, the process is that the relevant authority—

• (a) follows the steps set out in this regulation, and

• (b) awards any contract without a competition.

• (2) Step 1 is that the relevant authority decides, taking into account the key criteria and applying the basic selection criteria, whether it is content that the existing provider is satisfying the original contract and will likely satisfy the proposed contract to a sufficient standard.

• (3) If the relevant authority is so content, step 2 is that the relevant authority submits for publication on the central digital platform a notice of intention to make an award to the existing provider.

• (4) The notice referred to in paragraph (3) must include the information set out in Schedule 3.

• (5) Step 3 is that the standstill period begins the day after the day the notice referred to in paragraph (3) is published.

• (6) Regulation 12 makes further provision relating to the standstill period, including the making of written representations to the relevant authority by providers aggrieved by the decision made in step 1.

• (7) Step 4 is that the relevant authority—

• (a) carries out the requirements specified in regulation 12(4) where written representations are made in accordance with regulation 12(3), and

• (b) communicates the further decision made under regulation 12(4)(d) and any subsequent further decisions made under regulation 12(7), in accordance with regulation 12(6) and (8).

• (8) Where no written representations are made in accordance with regulation 12(3), the relevant authority moves to step 5 without taking any action under step 4.

• (9) Step 5 is that the relevant authority enters into the contract after the standstill period has ended in accordance with regulation 12(9) or (10).

• (10) Step 6 is that the relevant authority submits for publication on the central digital platform a notice of the award of the contract.

• (11) The notice referred to in paragraph (10) must—

• (a) include the information set out in Schedule 4, and

• (b) be submitted for publication within 30 days of the contract being awarded.

The Most Suitable Provider Process

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