1. Contracting Jennifer Finch Commissioning Manager
Commissioning Centre of Excellence
Birmingham City Council

2. Contents Purpose of the contract Developing contracts
Different types of contracts
NHS and LA Contracting
Procurement thresholds
Managing Contracts

3. Commissioning Cycle

4. Benefits of a Contract DISCUSSION IN GROUPS
Discuss one contract you are signed up to (non household)
Name one benefit of signing a contract

5. Main Aspects of a Contract
Terms and Conditions
Payment Terms
Termination
Transfer of Undertakings (Protection of Employment) - TUPE
Confidentiality
Safeguarding / Child Sexual Exploitation

6. Main Aspects of a Contract
Main Schedules
Service Spec
Finance Schedule
KPIs / Reporting Requirements
Data Sharing / Processing agreements

7. Main Aspects of a Contract
Quality
NHS – Friends and Family test
Compliments / Complaints
Serious Untoward Incidents (SUI’s)
Service User Surveys
Mystery customer shoppers
Audits

8. Main Aspects of a Contract
Signing of the contract
Delegated authority
Signature / Sealing

9. Types of Contracts ORAL CONTRACTS SUPPLIER CONTRACTS
(Goods and Services)
STANDARD CONTRACTS
MODEL CONTRACTS

10. Oral Contracts
Can be binding if the essential elements of a contract are present
Risks:
Lack of understanding
Mistakes
Disadvantageous Terms
Oral Contracts – oral agreement can be binding if the essential elements (Offer, Acceptance, Consideration, Intention, Capacity) Risks – mistakenly signing up to unknown T&C’s, mistake as in lack of genuine agreement

11. Supply Contracts One off Purchases Standing Orders Blanket Ordering
Framework Agreements
One off Purchases e.g. office furniture, IT, re-location
Standing orders – each acceptance is a distinct contract – cleaning services, catering services
Blanket Ordering – provider agrees to provide an estimated quality of items over an agreed amount of time. E.g. Stationary replacement of note pads, pens etc.
Framework Agreements - – for small, similar type services utilising a variety of providers in LA we use this for the individual based commissioning e.g. child placement, individual care. Framework is set up T&C’s are agreed before hand and there will be a list of approved and vetted suppliers where its agreed that specific purchases can be made when needed.

12. Model Contracts
Published by 3rd party experts incorporating standard practice for specific industries ensure fair and balance of contractual rights between buyer and supplier.
E.g. Engineering contracts (NEC3) CIPS contracts

13. Standard Contracts
Contract template based on generally accepted practice in industry or supply market or based on past negotiated agreements
E.g. NHS Standard Contract (Unilateral and Multi-Lateral), Non- Mandated Public Health Contract

14. Major changes will still need legal advice Saves costs - legal fees
ADVANTAGES
DISADVANTAGES
Helps reduce time
Major changes will still need legal advice
Saves costs - legal fees
Unfair terms can be negotiated
Not reinventing the wheel
Cost to train employees on those contracts
Fair to both parties
Widely accepted in the industry

15. Public Procurement Regulations
Regulates the purchasing by public sector bodies for goods, works or services.
Purpose: open up the EU's public procurement market to competition
Part A services must advertise in EU, light touch process for Part B Services
Public procurement law regulates the purchasing by public sector bodies and certain utility sector bodies of contracts for goods, works or services. The law is designed to open up the EU's public procurement market to competition, to prevent "buy national" policies and to promote the free movement of goods and services.
When do the Regulations apply?
Where the following pre-conditions are met a contracting authority must normally advertise the contract in the EU's Official Journal and follow the procedural rules set down in the Regulations:
The body doing the buying is a "contracting authority".  The definition is wide and includes central government, local authorities, associations formed by one or more contracting authorities and other "bodies governed by public law" (e.g. universities and housing associations);
The contract is for public works, public services or public supplies. Sometimes the contract will be a mixed contract (e.g. the supply and maintenance of computers). Where it is, a contracting authority must determine which element (e.g. the supply element or the service element) is the predominant element and, therefore, which set of rules will apply. This can be important to get right as the rules vary slightly depending on the type of contract (e.g. lower financial thresholds apply to services and supplies contracts than to works contracts);
The estimated value of the contract (net of VAT) equals or exceeds the relevant financial threshold. The rules expressly prohibit deliberately splitting contracts to bring them below the thresholds

16. Public Procurement Thresholds
Supplies & Services (except subsidised services contracts) Schedule 1 bodies -£106,047 Others -£164,176
Subsidised services contracts All bodies -£164,176
Works All bodies -£4,104,394
Light Touch Regime for Services All bodies -£589,148
Small lots Supplies and services -£62,842 Works -£785,530
Total value of the contract over the whole term of the contract NOT just the one year value.

17. NHS Contracting Process
Process set out by Department of Health
Timelines – October to March each year
All major contracts must be negotiated and signed by 8th April
Dispute resolution

18. QIPP Quality, Innovation, Productivity and Prevention
National, regional and local level programme designed to support clinical teams and NHS organisations to improve the quality of care they deliver while making efficiency savings that can be reinvested into the NHS.
QIPP stands for Quality, Innovation, Productivity and Prevention. It is a national, regional and local level programme designed to support clinical teams and NHS organisations to improve the quality of care they deliver while making efficiency savings that can be reinvested into the NHS.
Twelve national QIPP workstreams
NHS organisations at regional and local level have QIPP plans in place to address the quality and productivity challenge. Supporting these are twelve national workstreams designed to help NHS staff successfully deliver these changes. 
Five workstreams relate to commissioning of care and five relate to the running and staffing of NHS organisations. Two focus on primary care commissioning and contracting, and digital technology.

19. Contracting Arrangements
BLOCK CONTRACT
PAYMENT BY OUTCOMES
ACTIVITY CONTRACT
CQUIN PAYMENTS

20. Block Contract vs Activity Contract

21. CQUIN Payments Commissioning for quality and innovation
Introduced in 2009
A proportion of the providers income is conditional on demonstrating improvements in quality and innovation specific areas (does NOT apply in local authorities)
CQUIN stands for commissioning for quality and innovation. The system was introduced in 2009 to make a proportion of healthcare providers' income conditional on demonstrating improvements in quality and innovation in specified areas of patient care.
E.g. Productivity in pathways and improvement programme – Mental Health

22. NHS Payment by Results
National Tariff System in place e.g. cancer services
Tariffs are reviewed every year
Cost per activity / service
Agreement of tariff from Commissioners and Providers
Local variations can be implemented

23. Difference Advantages Disadvantages DISCUSSION IN GROUPS OUTPUTS
OUTCOMES

24. Payment by Outcomes - Example
£600,000 contract
Moving from an output focus to outcome focus to deliver a better outcomes for citizens

25. Relationship Management
Relationship management is dependant upon:
Contract value
Type of service
Importance
Length of contract

26. Performance Management
Contract Review Meetings
Performance Monitoring
Remedial Action Plan

27. Future of Contracting
More emphasis on Corporate Social Responsibility (CSR)
More partnership working between Health and Social Care

28. Commissioning Cycle

29. Quick Quiz What are the four main stages of the commissioning cycle?
What is the purpose of the Friends and Family test within an NHS Contract?
When does the NHS Contracting cycle start and finish?
Name one advantage of model / standard contract?
What is a remedial action plan?

30. Any Questions