1. Procurement of Healthcare Services
NHS Wirral
Procurement of Healthcare Services
Valerie Attwood
Divisional Head of Procurement and Contracting

2. Background
The purchase of ALL goods and services in the public sector is subject to EU regulations (2004) and UK law (2006) - Different requirements apply to different products and services.
Key competency for World Class Commissioning
DoH PCT Procurement Guide (Summer 2008)
PRCC Dec 07/updated Dec 08
Supply 2 Health web portal launched Sep 08

3. Different classification of services

4. Regulations and thresholds
EU legal requirements to tender
£ 101,323 for supplies and Part A and services
£156,442 for Part B services
£3,927,260 for works / building projects
Local PCT requirements – example of local SFI’s
£10k and up to £90k - three written competitive quotes for goods and part A services
Full compliance with the EU procurement directives for supplies purchases over £90,319
Full compliance with the EU procurement directives for works projects over £3,497,313 – however local tender req. over £125k
Healthcare contracts, subject to the PCT Healthcare Procurement Strategy not SFI’s (Part B service)
Values are aggregated

5. Assessment criteria to consider
Decisions on services you decide not to market test need to be recorded and notified to the SHA
Estimated value of the contract
Government policy on protected services
Level of market interest
Assessment
Criteria
Is there a reason that competition is not appropriate in this circumstance

6. Other possible options
Commission / purchase more of the same activity from existing providers
Use existing contracts to deliver a service improvement
‘Flex’ existing contracts
Utilise the extended choice / free choice network
New formal contract
AWP / Tender

7. Scenario examples
Each table has a scenario
5 minutes to discuss what you might do.

8. OH NO… WE NEED TO TENDER !!!!

9. If you decide to go to competition
AWP exercise : 8 – 10 weeks
EU tender minimum 4 months start to finish, bigger contracts 6 – 12 months – need detailed specification
Framework contracts – do it once, then just mini comp exercises for next 3 years

10. New formal contract via competition
Any Willing Provider
Intended to provide plurality of providers
Can be an ‘open’ or ‘managed’ process
No guarantee of activity or finance
Can be undertaken in weeks
Template for accreditation included

11. Open Managed Approach from third party to provide a local service
PCT identifies an unmet need for a distinct service and produces a specification
Assess strategic fit of Initial proposal and service spec
Once spec approved advertise service on ‘Supply 2 Health’
Undertake accreditation with interested providers and confirm compliance with spec.
If approved – undertake accreditation with provider
Final proposal + summary accreditation to approvals committee
Confirmation of compliance and summary accreditation submitted to approvals committee
Produce final contract based on one of the DH templates
Produce final contract based on one of the DH templates
Ongoing management and re-accreditation (min every 3 yrs)
Ongoing management and re-accreditation (min every 3 yrs)

12. New formal contract via competition
Tender exercise
Can result in sole or multiple providers
May be a minimum contract guarantee or framework
Average duration between 6 and 12 months

13. Representatives Clinical, Finance, Procurement, HR, E+D, Estates
Gain approval for competitive tender
Establish the team and project plan
Place advert
S2H or OJEU
40 days
Complete specification
PQQ with interested providers
2-4 wks
Evaluate PQQs and shortlist
Typical tender process

14. Involve procurement team
Undertake bidder presentation day
Issue ITT to shortlisted providers
Involve procurement team
40 days
Tender Clarification
10 days
Evaluate offers
20 days
Undertake bidder presentations
Award contract
10 day standstill
Plan around board / committees

15. Governance of process
Need standard policy on membership required for independent committees / evaluation teams for AWP and tender exercises
Need clear conflict of interest policy to avoid or manage risk of challenge

16. Mobilisation
Ask for a clear project plan for implementation from the provider – make sure you agree
Define roles and responsibilities for key tasks
Consider the ‘critical path’
Have regular progress reviews with the provider
Plan a contract / provider launch
Monitor performance against KPI’s and take corrective action where necessary

17. Risks of getting it wrong
Increasing risk of legal challenge
Local council and children’s playgrounds
Focus of Co-operation and Competition panel
Restricted tenders for NHS in South East
Introduction of EU Remedies Directive in Dec 2009
Requirement to weight award criteria
Disclose scores to all bidders
Publish award notice early – ideally within standstill period
Can now stop contracts upto 6 months after award

18. Other key skills Contracting – Carole Hodgkinson this afternoon
Be clear and concise
Don’t allow ‘wriggle room’
Negotiation

19. Phases in Negotiation Preparation
info gathering, know the market, supply/demand, BATNA
Opening
Each party presents their starting position
Bargaining
Clarify information, present counter arguments
Close
Agree a final position

20. Car negotiation exercise
Sellers have a brief
Buyers have a brief
2 minutes to read brief then 5 minutes to conclude a sale / purchase – we will then see if buyers and sellers are still happy with the deal !!

21. Sale positions Seller Desperate to sell Well serviced Will include tax
Target price £2,750
Will sell for £2,000
Buyer
Desperate to buy
Only car out of 4 in Autotrader you would buy
Had £2,900 cash with them

22. Key messages Consider all the options / arguments
Ensure a fair and transparent process
Be clear and concise with providers
Adopt a team approach to utilise specialist skills
Fail to prepare – prepare to fail
Remember – It’s not rocket science!!!

23. Further help and guidance
PCT procurement guide - DH
PRCC - DH
EU Directives and UK Procurement Law - OGC

24. THANK YOU FOR LISTENING ANY QUESTIONS?
Valerie Attwood
Tel: