1. PROCUREMENT and THE HEALTH AND SOCIAL CARE BILL
Jennifer Skilbeck
for Bangor University Procurement Week
30 March 2012

2. The Health & Social Care Bill: some points
Establishes Monitor as a regulator, replacing CCP
Establishes a National Commissioning Board and clinical commissioning groups
Abolishes SHAs and PCTs
Extends patient choice
Prevents price competition
Prevents discrimination between providers

3. Duties of Monitor (cl. 60 et seq) include:
Principal duty: protect and promote the interests of health care users
Prevention of anti-competitive behaviour
Integration of services where in patient interest
Avoidance of discrimination between NHS suppliers and the independent sector

4. Monitor: powers include
Power to investigate etc anti-competitive behaviour concurrent with OFT (Trusts assumed to be “undertakings”: controversial)
Possible enforcement of new procurement Regulations (cl.73-76)
Licensing of providers (AQP)

5. “Any Qualified Provider” (AQP): CCP Guide
Choice as to whether single provider, framework or all qualified providers
Currently patient choice required for first referral and elective services
CCP role to be taken over from Monitor

6. AQP: legal issues Appeal against licensing decision? To Monitor?
Appeal against restriction to a limited number of AQPs? Competition law?
Appeal against further use of quality criteria covered by licence? JR/Procurement law?(by analogy: Case C-199/07 Comm v Greece)

7. CCP: restrictive practices (July 2011)eg
Discrimination against the independent sector eg imposing minimum waiting times
Unsubstantiated reliance on economies of scale in the NHS in refusing access to the market

8. Restrictive practices in the private sector
Anti-competitive practices being investigated by the OFT, decision on reference to CC to be decided in April eg
Barriers to entry/dominance
Inducements to clinicians

9. Interface: competition and procurement law
Anti-competitive practices can be unfair eg by restricting availability/prices of sub-contractors/partners
Exclusive agreements can restrict patient choice and the procurement market
But CJEU not keen to attack health care:Case C-222/98 van der Woude: Case C-205/03 Fenin

10. Procurement Regulations
Regs may make the requirement for Part B contracts similar to those for Part A
Monitor may have enforcement powers
Commissioners bound by Monitor’s advice (as now the case with CCP)

11. Regs: difficulties for Commissioners
Limited choice of procedures
Problem of debrief and standstill
Restrictions on use of criteria and weightings
CJEU has confirmed Part B obligations are limited: Case C-95/10 Sintra; Case C-226/09 Comm v Ireland

12. Regs: difficulties for NHS supplier/tenderers
Regs apply in NHS’s own procurements -not to those of their independent competitors:
Delay through advertising (C-126/03 Comm v Germany)
Costs of procurement
Inability to negotiate
Risk of challenge

13. New types of litigation
AWP (NHS Trust) v North Somerset Council: contract for psycho-social services
Unison v Wiltshire PCT & others re cutting back-office staff in the provision of family health services through outsourcing

14. Price competition There is to be no price competition
Monitor will fix tariffs (which currently exist for many services)
Where no national tariff, Monitor’s principles to be applied
Tariff will permit variation for local conditions, bundling etc
Consultation etc, and appeal on tariff to CC.

15. Consequences of absence of price competition
If price too low
New entry/patient choice will be discouraged
Recovery of PFI costs may be difficult
Can competition on quality “second guess” licensing conditions?
Advice to patients will not be based on price

16. “Integration” of services
Issue important for Trusts in maintaining critical mass
Difficulties for single-service suppliers - ?discrimination
New draft Directive provides some rights for SMEs through disaggregation of contracts: potential conflict or grey area

17. Conflicts of interest
Significant new scope for conflicts where connection between Commissioners & providers
CCP already reported (Peterborough 1/3/12; York MSK 22/3/12 – Comp Act?)
New draft Directive suggests very strict approach (Art.21)

18. Some final thoughts: commissioners
Consider the effect of the restrictions imposed on Part B procurements:
Criteria & weightings (C-226/09)
Debrief
standstill
Consider joint procurement
Consider Teckal and Hamburg (Case C-480/06) possibilities?

19. Some final thoughts: commissioners ctd
Consider sharing tender documentation rather than frameworks
Watch out for conflicts of interest
Distinguish novation by contracting authority from novation by contractor (Pressetext)

20. Some final thoughts: tenderers
Check whether tendering revisits licensing conditions
Should the tender be open to all qualified providers?
Are there any state aid issues?
Is the tender fair to independents – eg conflicts?
Have contracts been extended unlawfully?

21. Some final thoughts: tenderers ctd
Is there an incumbent NHS provider with an advantage? (see case law and current CCP cases)
Are there any enforceable rights other than the 2006 Regs eg in new Regs?
Above all, raise queries before submission

22. For more information www.monckton.com
Thank You
For more information