Influencing Commissioning
Procurement within Commissioning in the
English NHS
RCN Policy and International Department, March 2011
Contact: policycontacts@rcn.org.uk
Objectives
 Provide an overview of framework surrounding
procurement in the English NHS
 Provide overview of various rules and guidance
 See weblinks on slides for further resources and to
find out more
 Note that this is a dynamic area and guidance will
change over time
 This is a resource for you to adapt and use as you
see appropriate
Procurement as part of
Commissioning
 RCN view is that:
 Procurement is a stage within Commissioning
 It should not be a process that stands apart from the
Commissioning cycle
 It must link to needs assessment, contract management etc
 Procurement should be undertaken when it is appropriate
i.e. when existing providers are not able to meet needs
(after being given opportunities to improve) or when new
services are required
 It must not be separate from clinical insight otherwise run
the risk of poor procurement; buy a service that is not fit for
purpose, or fails to specify in the contract the required
clinical quality standards and key performance indicators
 Procurement needs to be sensitive to legal requirements
(and should draw upon legal expertise)
Procurement as part of
Commissioning
http://www.rcn.org.uk/__data/assets/pdf_file/0010/359308/003853.pdf
Working within the
procurement framework
 There are a variety of rules and guidance to
inform procurement
 Some are legally binding (e.g. requirements to
publish tenders based on value set by the EU)
 Others are part of Government drives to improve
procurement practice (e.g. Guidance from the
DH)
 And others still from agencies who have a role in
competition (e.g. Co-operation and Competition
Panel) and in assessing value for money (e.g.
National Audit Office, Office for Government
Commerce)
Get to know the rules and
guidance
 They can help you in understanding the stages
of procurement and what is expected from best
practice
 But there will be differences depending upon
exactly why, what, when a service is being
procured
 Trade union involvement will differ and not all of
the details of a procurement will be in the public
domain (for good reasons)
EU procurement
 Healthcare services are often considered under
Part B of procurement law (which is less prescribed)
but need to adhere to principles of:
 transparency
 equality of treatment and non-discrimination
 objective evaluation process for assessing
expressions of interest
 Healthcare goods under Part A of procurement law
 Concern has been raised about application of EU
law in relation to competition but it’s not straight
forward (and it needs legal expertise)
 The concern is that if the laws are not followed that
procurement decisions can be challenged leading to
costly legal cases which may change the awarding
of a contract and affect delivery of services
http://www.ojec.com/WhatIsTheOJEC.aspx
Office for Government
Commerce
 Provides guidance on how Government can get
value from third party spend
 Provides guidance around adhering to EU
procurement law
 Tends to be more goods focused (i.e. equipment
etc)
http://www.ogc.gov.uk/procurement.asp
DH Guidance
 DH Procurement guide
 Principles and rules for co-operation
and competition
 National contracts
 CQUIN
DH Procurement Guide
The Procurement Balance
Source: http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/digitalasset/dh_118219.pdf
DH Procurement Guide
 Tender is not a policy requirement
 Tender where:
 Need new service models
 Need new capacity
 Tender can be either: 1) Single action tender (but risks
challenge), or 2) competitive procurement process
 All tender decisions need to have a clear audit trail
 Tender needs to be advertised on NHS Suppy2health and
(depending upon the value) on OJEU
 Service specification sets out what the Commissioner
wants from provider(s)
 Funding approach based upon Commissioners view and
on availability of tariff
 Can include CQUIN (paying for performance)
 Mindful of conflicts of interest
DH Procurement Guide
 Appendix B covers engagement with staff and trade
unions
 Clear expectation about involvement in all stages of
commissioning
 On procurement, expectation that staff engagement
should cover:
 Forward planning of potential procurements
 Appropriate involvement of employer and staff-side
representatives in developing pre-qualification and bid
evaluation criteria
 Appropriate involvement of employer and staff-side
representatives in implementation of new contracts
 Managing potential conflicts of interest arising from
involvement of employer and staff-side
representatives in procurement.
DH National Contracts
 DH set out model contracts and agreements for
use locally to cover all NHS funded activity
provided by all types of providers (NHS, for profit,
not for profit)
 Can include locally determined elements such as
key performance indicators on top of national
requirements (e.g. Vital Signs)
 Includes agreements to cover many commissioners
when they wish to join together
 These are the starting point for contracts to be
signed locally
http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/Browsable/DH_117502
Commissioning for Quality
and Innovation (CQUIN)
 Links proportion of payment to a provider with
achievement of quality improvement goals
 In future anticipated CQUIN can support embedding of
NICE quality standards and wider use of Patient
Reported Outcome Measures (PROMS)
 Value of CQUIN payments has changed over time from
0.5% to 1.5% from April 2011 onwards
 CQUIN goals must be different to other goals set out in
national requirements (i.e. cannot be the same as Vital
Signs)
 Commissioners can use CQUIN as a further tool when
undertaking procurement including it as part of the
contract and as part of performance management of
providers
http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_091443
Principles and Rules for
Cooperation and Competition
(PRCC)
 Expectation that these are followed (but they are
not legally binding by themselves)
 They are included within Monitors’ compliance
requirements for FTs
 Apply to all commissioners and all providers
irrespective of whether they are NHS, for profit
or not for profit
PRCC
http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/digitalasset/dh_118220.pdf
Cooperation and Competition
Panel (CCP)
 Monitors NHS against the PRCC based upon concerns or
complaints made (and complaints must go through local and
then SHA level processes before being considered at the
national level)
 Most relevance to procurement is their scope to investigate
procurement disputes
 They provide ‘guidance’ only
 They will likely merge into the new Economic regulator (Monitor)
in the future
 Lessons on commissioning from their 1st year include
Commissioners putting themselves at risk of challenge by:
 changing the criteria to evaluate bidders than initially
described in the bid documents
 excluding potential bidders on grounds unrelated to their
ability to deliver the services tendered
 failing to select the best performing service provider as the
preferred bidder
http://www.ccpanel.org.uk/
http://www.rcn.org.uk/__data/assets/pdf_file/0017/311804/02.10_The_cooperation_and_competition_panel_in_England_-_one_year_on.pdf
National Audit Office
 NAO’s role is to:
 Audit the accounts of all government departments and
agencies as well as a wide range of other public bodies
 Report to Parliament on the economy, efficiency and
effectiveness with which these bodies have used public
money.
 Covers health and social care and often completes
reviews of specific areas of activity
 For example:
 Procurement of consumables
 Delivering cancer reform strategy
 Improving dementia services
 They may have reports which are relevant to a service
being commissioned so worth asking Commissioners if a
check has been made on their website
http://www.nao.org.uk/our_work_by_sector/health_and_social_care.aspx
Going from national to local
 There is a national framework but locally
Commissioners will decide:
 Their approach to deciding if a tender is
needed
 Their approach to setting the service
specification
 Their approach to sharing information with
relevant stakeholders but they are expected
to provide an audit trail
Going from national to local
 Their approach to procurement stages:
 Prequalification – sets minimum standards that a
potential provider must meet
 Expression of interest – initial signal that a
provider is interested and approaches will differ in
how these are assessed and scored in order to
select smaller list of potential providers
 Tender requirements – written information from
potential providers and other approaches (e.g.
panels to question potential providers to assess
their suitability)
 Award process – approaches will differ on how
final decision reached and scoring of information
(e.g. how important the panels views are in
informing the final decision)
Going from national to local
 There are principles to be mindful of:
 There should be clarity around dealing with
conflicts of interest and you will also need to
ensure that you declare yours
 There should be a degree of transparency in the
content and process but there are real issues
around commercial confidentiality and it will not
be appropriate for all tender documents including
pricing etc to be in the public domain and/or
shared but don’t be afraid to ask – it is up to the
Commissioner to provide a rationale for what
can’t be shared
Questions that you might like
to raise
 Specify services
 Is the specification based on best practice?
 Are the patients’ best interests at the centre of
the specification?
 What will be the impact on staff?
 How will the quality be monitored?
 What will be the performance indicators?
 What evidence is there that the provider offers
value for money?
http://www.rcn.org.uk/__data/assets/pdf_file/0010/359308/003853.pdf
Questions that you might like
to raise
 Shape the structure of supply




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What is the procurement process?
Is the process fair and equitable?
What will be the impact on staff?
Specific questions to address proposals to tender:
Has there been a review of the quality of the
existing service?
 How will the quality of services be assessed (for
example, which patient reported outcome
measures –PROMS- and patient reported
experience measures will be recorded and
monitored)?
http://www.rcn.org.uk/__data/assets/pdf_file/0010/359308/003853.pdf
Questions that you might like
to raise
 Shape the structure of supply





What is the procurement process?
Is the process fair and equitable?
What will be the impact on staff?
Specific questions to address proposals to tender:
Has there been a review of the quality of the
existing service?
 How will the quality of services be assessed (for
example, which patient reported outcome
measures –PROMS- and patient reported
experience measures will be recorded and
monitored)?
http://www.rcn.org.uk/__data/assets/pdf_file/0010/359308/003853.pdf
Questions that you might like
to raise
 Shape the structure of supply
 Does the provider have an appropriate strategy for
maintaining a safe working environment which
encompasses health and safety structures and
risk assessments?
 What triggers will be included to assess whether
or not to withdraw the contract?
 What is the framework for professional leadership
and support?
 What is the organisation’s strategy for recruitment
and retention of nursing staff in the future?
 Will the new provider take nursing students on
placement, provide work for newly qualified nurses
and play a part in local workforce planning?
http://www.rcn.org.uk/__data/assets/pdf_file/0010/359308/003853.pdf
Questions that you might like
to raise
 Shape the structure of supply
 Has there been an equality impact assessment of the change to
the service, in relation to both staff and the local community?
 Does the organisation have an equality and diversity policy?
 What mechanism does the new provider have in place for
workforce data collection which records race, gender, age,
disability linked to payroll information?
 Will local staff be involved in selecting a provider? If not, why
not?
 What processes will a new provider put in place for staff side
consultation and engagement?
 What will be the impact on staff? Will there be any changes to
place or pattern of work?
 Have staff been made aware of the full implications (for example,
locality, terms and
 conditions on promotion, pension issues) of transferring to the
new organisation?
http://www.rcn.org.uk/__data/assets/pdf_file/0010/359308/003853.pdf
And don’t forget….
…you can always contact the policy and
international department if you would
like further advice.
policycontacts@rcn.org.uk