NHS Provider Selection Regime: Panel decision provides guidance on the information that must be provided to unsuccessful bidders

NHS Provider Selection Regime: Panel considers PSR breaches of an NHS England body

On 19 February 2025 the Independent Patient Choice and Procurement Panel (“IPCPP”) published its review of a proposed contract award for Liaison & Diversion and RECONNECT Services in Lancashire and Cumbria.

This update will be of interest to:

• “Relevant authorities” (such as ICBs, NHS England, Trusts and Foundation Trusts) taking part in the Provider Selection Regime (“PSR”) to procure healthcare services, or
• Any provider of healthcare services to the NHS.

For guidance on the NHS Provider Selection Regime, see our PSR flowchart on choosing the right award process here. 

Facts

On 2 January 2025 the IPCPP was asked by Lancashire and South Cumbria NHS Foundation Trust (“LSCFT”) to advise on the selection of a provider by NHS England North West (“NHSE NW”) for its Liaison & Diversion and RECONNECT Service in Lancashire and Cumbria. The IPCPP accepted LSCFT’s request on 7 January 2025 in accordance with its case acceptance criteria. 

NHSE NW commissions specialised services in Cheshire and Merseyside, Greater Manchester, and Lancashire and Cumbria, including health and justice services. LSCFT is currently contracted by NHSE NW to provide Liaison & Diversion Services, RECONNECT Services, Enhanced RECONNECT Services, and Mental Health Treatment Requirement Services in Lancashire and Cumbria. LSCFT’s contract was due to expire on 31 March 2025, and so NHSE NW published a Prior Information Notice on Find a Tender on 9 April 2024. NHSE NW assessed potential providers’ interest in delivering services and decided to procure the services in three lots:

• Lot 1 – Liaison & Diversion and RECONNECT Services for Lancashire and Cumbria;
• Lot 2 – Enhanced RECONNECT Services for Lancashire and Cumbria; and
• Lot 3 – Mental Health Treatment Requirement Services for Lancashire and Cumbria.

The Liaison & Diversion and RECONNECT Services in Lot 1 provide early intervention for vulnerable people within the criminal justice system and offer care after custody services to improve continuity of care for vulnerable people leaving custody. NHSE NW received three bids for Lot 1, and the successful bidder was Practice Plus Group Health and Rehabilitation Services (“PPG”). LSCFT was ranked third.

LSCFT subsequently made representations to NHSE NW regarding their conduct of the provider selection process. LSCFT raised concerns regarding NHSE NW’s compliance with its information sharing, transparency and fairness obligations under the PSR regulations. 

Key Issues

Did NHS England North West breach the PSR regulations?

The IPCPP considered eight potential breaches of the PSR regulations, and found that there was no breach in five areas:

1. NHSE NW’s decision to commission the services covered by the current contract in three separate lots;
2. NHSE NW’s decision on the relative weighting accorded to questions for scoring bidders’ response;
3. NHSE NW’s evaluation and scoring of LSCFT’s and PPG’s responses to the Information Governance & Information Sharing question;
4. NHSE NW’s evaluation and scoring of LSCFT’s and PPG’s responses to the Social Value question; and
5. NHSE NW’s evaluation of PPG’s response to the question on past contract performance.

However, the IPCPP found that the PSR regulations were breached in three areas:

1. NHSE NW breached its obligation to act fairly when NHSE NW asked LSCFT to address the exit strategy for its current contract as part of its tender response.
2. NHSE NW breached its obligation to act fairly and transparently by not giving bidders the revised TUPE information.
3. NHSE NW’s provision of information to LSCFT as an unsuccessful bidder and its response to LSCFT’s representations concerning the provider selection process breached Regulation 12(4) of the PSR regulations regarding the standstill period. The tender outcome letter sent to LSCFT by NHSE NW was misleading as to “the reasons why the successful provider was successful” and “the reasons why the unsuccessful provider was unsuccessful”.

We consider the second and third breaches below:

Supply of TUPE information

Before the procurement process, NHSE NW asked LSCFT for a TUPE schedule (setting out the information relating to staff that would transfer with the services under the contract) that it could include with the tender documentation. 

A revised TUPE schedule later gave rise to two issues for the IPCPP to consider in its review: the implication of LSCFT’s use of ICB-staff to deliver services and LSCFT’s omission of a number of staff from their earlier TUPE schedule. 

The IPCPP noted that whilst it is the responsibility of the bidders to carry out their own assessment and due diligence, it is unreasonable to expect bidders’ proposals to not be influenced by the TUPE information supplied by commissioners in their tender documentation. The NHSE NW’s decision not to distribute the revised TUPE schedule means that bidders had a misleading impression of the number of staff used to deliver the current services, as well as their cost and TUPE liabilities. These factors, as put forward by LSCFT, affected the bidders’ proposals.

Therefore, although NHSE NW gave no guarantee or assurance that the TUPE information was accurate, NHSE NW could not escape their obligations under the PSR regulations to act fairly and transparently in relation to the supply of TUPE information. 

Tender Outcome Letters

Regulation 11(8) of the PSR regulations requires authorities to set out the reasons why the successful provider was successful, and the unsuccessful provider was unsuccessful in its tender outcome letter. LSCFT, in responding to NHSE NW’s tender outcome letter, said that “the relative Weighted Scores do not appear to be supported by the Reasons for Scores provided. We do not understand why only a ‘Summary of Reasons for Score’ has been provided for the Successful Provider”.

The IPCPP compared the “summary of reasons for score” for PPG in the tender outcome letter sent to LSCFT with NHSE NW’s evaluation panel’s final agreed feedback for PPG to assess whether the summary was accurate. 

The summary in the tender outcome letter was significantly shorter in length than the evaluation panel’s final agreed feedback (around 770 words in the tender outcome letter vs around 1,800 words in the final agreed feedback). 

Whilst a summary of a successful provider’s “final agreed feedback” can meet the requirements of Regulation 11(8), it must accurately reflect the reasons agreed by the evaluation panel.

The Panel found that the summary was not accurate in four out of eight questions and many of the evaluation panel’s adverse comments were removed. This created the impression of a stronger proposal than was reflected in the evaluation panel’s agreed feedback. The IPCPP found that the tender outcome letter did not accurately reflect why PPG was successful and why LSCFT was unsuccessful. 

The IPCPP found that NHSE NW did not meet its obligation under Regulation 11(8) to set out in the tender outcome letter “the reasons why the successful provider was successful” and “the reasons why the unsuccessful provider was unsuccessful”.

Regulation 12(4) of the PSR regulations requires authorities to promptly provide information requested by an unsuccessful bidder and ensure that an unsuccessful bidder making representations has the opportunity to explain or clarify those representations. 

Following receipt of the tender outcome letter, LSCFT asked NHSE NW to “provide the detailed Reasons for Score for the Successful Provider for all questions”. NHSE NW responded that it is confident that it complied with Regulation 12(4) when it reviewed its final decision as part of an internal review process. 

The IPCPP’s view was that NHSE NW was obliged to supply the record of the reasons for its tender award decision where LSCFT requested it. LSCFT clearly made a request and NHSE NW should have provided the “final agreed feedback” as given by its evaluation panel. The IPCPP found that by not supplying the “final agreed feedback” NHSE NW breached Regulation 12(4).

Regarding NHSE NW’s obligation to allow an unsuccessful bidder the opportunity to explain or clarify their representations, it was LSCFT’s view that NHSE NW dismissed their claims without asking what the grievance was in more detail. LSCFT wanted to “enter into a reasonable conversation” but it said it was not given that opportunity by NHSE NW. It was NHSE NW’s view that the unsuccessful bidder’s representations should describe its issues in more detail so that the relevant authority can assess them. Although NHSE NW correctly identified the “as the relevant authority considers appropriate” caveat to Regulation 12(4), the IPCPP found that this caveat provides commissioners with an opportunity to bring an unsuccessful bidder’s explanations to a conclusion where an appropriate explanation has already been made, rather than allowing the commissioner to decide that such explanations do not need to be made in the first place.

As a result, in failing to give LSCFT the opportunity to explain or clarify its representations in relation to the Information Governance & Information Sharing and Social Value questions, NHSE NW breached Regulation 12(4).

Final Panel Decision

The IPCPP found that the above breaches of the PSR regulations had such a material effect on NHSE NW’s provider selection decision and that had these breaches not taken place, a different bidder may have been selected. The IPCPP ultimately advised NHSE NW to invite the three bidders to resubmit their proposals.

Practical Guidance

This case review provides several guidance points for the procurement of healthcare services:

• The Panel expects a more collaborative approach to resolving disputes under the PSR than Commissioners and suppliers may be used to under previous procurement law: Commissioners should take particular care to meet the PSR regulations’ requirements in relation to tender outcome letters, information requests from unsuccessful bidders, and responding to representations constructively. Potential providers should engage proactively, constructively, and cooperatively with commissioners. Complying with these obligations will help minimise the likelihood of matters escalating to the IPCPP. In practice, this may be different to how Commissioners and unsuccessful providers have dealt with contested contract awards. Indeed, the chair of the ICPP recently commented that “This places greater obligations on commissioners to work openly and cooperatively with any unsuccessful bidder that is unhappy with a procurement process. Important elements to this include supplying unsuccessful bidders with relevant and accurate information, and actively working with them to understand and respond to issues they raise. This can require a different mindset for commissioners, given that the old procurement rules may have encouraged a more adversarial approach, but one that is important to achieving success under the new regime.” (HSJ, 3 April 2025)

• The obligation of transparency requires accurate information to be provided, if it is available: Even though commissioners gave no guarantee or assurance that the TUPE information was accurate, the Panel found that there was a breach of transparency as a result of the Commissioner's failure to share the most up to date TUPE information, as bidders would inevitably base their tender on the information that they had been provided, which had been superseded.  

• Outcome letters must be accurate, and if a bidders asks for the full written feedback, the Commissioner should disclose it: NHSE NW failed to provide an accurate outcome letter and it refused to provide the more detailed feedback it had recorded, in breach of Regulation 12(4) which requires it “provide promptly any information requested by an aggrieved provider where the relevant authority has a duty to record that information under regulation 24 (information requirements)”. 

If you would like to discuss this matter or any other aspect of the Provider Selection Regime please contact Patrick Parkin or another member of our Healthcare team.

Article written by Alex Bones and Patrick Parkin.