Integrated Care Boards (ICBs) strapped for cash continue to see time and money disappear on lengthy procurement processes open to private companies and legal challenges. In recent weeks, two large-scale procurement processes have hit the buffers.
In North West England, a group of ICBs halted the procurement of non-emergency patient transport (NEPTS) due to legal challenges and also in the North West, an independent panel told NHS England North West to either re-run or scrap entirely a contract award process for services providing healthcare in the criminal justice system after it was found to have breached procurement rules.
In both cases, the NHS organisations will have spent considerable time and money running the procurement processes, and they now face the prospect of spending more to begin the process again.
The Provider Selection Regime (PSR), introduced in January 2024, was designed to reduce the need for so many contract tenders, with a new framework for the procurement of health services and the introduction of ‘direct award’ options. But it appears that legal challenges and claims of unfairness in the system are not going away.
Legal challenges
Two legal challenges by undisclosed companies brought the procurement process for non-emergency patient transport (NEPTS) by a group of ICBs in North West England to a halt in late February. This was even before the preferred bidder had been announced.
HSJ reported that in an email to NEPTS staff, North West Ambulance Service chief executive Salman Desai said that the move was “due to issues with the design of the procurement process and an ‘unacceptable risk’ there could be further legal challenges to any outcome, which would cost more money and time.”
But a considerable amount of time has already been spent on this procurement process; Lancashire and South Cumbria ICB launched the process across the North West in September 2023. The contract, worth £58m per year, covers a huge area – Cheshire and Merseyside, Greater Manchester, and Lancashire and South Cumbria. It was to be awarded for an initial five years, with the option to extend for a further three, starting in April 2025.
Now the whole procurement process will have to begin again, with the current contract being extended for a year until March 2026, with North West Ambulance Service delivering NEPTS across the North West, alongside the West Midlands Ambulance Service, covering Cheshire.
In the second situation in North West England, the process for awarding a contract for services providing support to vulnerable people with complex health needs before and after they come into contact with the criminal justice system in Lancashire and Cumbria began in April 2024. The process had completed and NHS England North West had awarded the contract to Practice Plus Group Health and Rehabilitation Services.
No legal challenge has been made this time, but the contract award was referred to the Independent Patient Choice and Procurement Panel (IPCPP), a panel set up under the new PSR to arbitrate disputes. The referral was by Lancashire and South Cumbria Foundation Trust (LSCFT), the current incumbent in the contract.
The IPCPP ruled that NHS England North West had made several breaches of procurement rules in the process awarding the contract to Practice Plus Group and recommended that the process either be re-run or scrapped entirely. Although the panel’s advice is not binding, if a commissioner does not act on it, it could be open to a legal challenge.
Similarly, back in September 2024, the IPCPP advised Liverpool University Teaching Hospital Foundation Trust to re-run at least part of its procurement process for an urgent care unit. As before the advice is not binding but if it isn’t taken then the ICB opens itself up to a legal challenge, with all the associated costs in time and money.
The contract was only for 12-months and worth just £1m which the trust had awarded in June 2024 to PC24, a social enterprise working across Merseyside, to run Aintree Hospital’s same day urgent care unit. A month later, ID Medical Group complained to the panel that the trust’s selection process was unfair.
Multi-year delays
Legal challenges on procurement can drag on for years. In January a high court ruled that Northamptonshire ICB can finally award a contract worth £40m for an urgent care centre to DHU Healthcare, as a new provider. But this is still not the end of the legal process, just a small chapter in the saga.
Back in January 2024, Northamptonshire ICB announced that DHU Healthcare was its preferred bidder for the contract to run the UCC in Corby. This announcement triggered a legal challenge from the service’s existing provider, OPC (One Primary Care) and a suspension of the awards process. Now a year later the ICB’s application to lift the suspension, clearing the way for the commissioner to award the contract to DHU, has been agreed by a court.
The original January 2024 legal action, however, is still ongoing. This long standing dispute has its roots in a previous tender process run in 2022 and 2023 when the ICB had also tried to award the urgent care contract to DHU; this process was abandoned following a legal challenge by OPC.
It’s clear why private companies resort to legal challenges. For many, their business has been built on NHS contracts, which for well over a decade had been available to bid for. For some companies no NHS contracts means virtually no business at all, such as in non-emergency transport or urgent care, where the NHS is almost the sole source of work. Bidding for these contracts is an expensive process so it is no surprise then that the response from any unsuccessful bidder is to question the process and resort to legal challenge. Private companies also have a duty to their shareholders and board to discover why, and often that can only be achieved through legal means.
The PSR system may have streamlined processes and allowed ICBs to award more contracts without lengthy and costly procurement processes, but it hasn’t eliminated them completely. As long as ICBs continue to have to run procurements that attract private companies, then time and money will be wasted on disputes that could have been spent on patient care.
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