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How NHS commissioning differs from commercial procurement

Although GPs are now involved in commissioning services, they have not been given an entirely free rein. This is because public money is involved and so the Public Contract Regulations 2006 (‘the Regulations') apply.

The Regulations seek to ensure that all contracts awarded by a CCG are done so properly and transparently. The requirements of the Regulations increase depending on the value of the contract awarded, so a block contract for a large guaranteed amount of work will be much more tightly controlled than a small amount of activity arising from an any willing provider contract.

Many other sectors are constrained by particularly stringent commissioning requirements and have to adhere to strict timescales and procedures.

Fortunately, the healthcare sector is subject to less stringent rules because most healthcare services are ‘part B' services, to which a lesser regime of regulation applies.

Rather than going through the procurement process every time a new service is commissioned, most commissioners will go through a single initial procurement process to set up a ‘framework' of providers. The commissioner can then call for services from this pre-approved list of providers as required.

However, the Regulations are complicated and failing to adhere to them can have significant consequences. If the procurement process is flawed in other sectors, the contract may be cancelled. While this will not happen to most services in the healthcare sector – due to their ‘part B' status – there is a risk that damages will be awarded against the CCG or fines imposed. As the healthcare market becomes more competitive, there is a good chance that the number of challenges from unsuccessful parties will increase, so it is vital CCGs are aware of the importance of complying with the Regulations.

Failure to comply can also mean that a CCG's plans cannot be carried out as they would like. An example of this is Gloucestershire PCT, which had decided to transfer its provider arm to a social enterprise. It did not run a competition to see who would be the best provider and as a result was challenged by a third party. The matter has gone to the High Court for judicial review and has led to the procurement being significantly delayed.

David Hansom is a partner and head of public services at Veale Wisborough Vizards