26 January 2024

Overview

With the Provider Selection Regime (PSR) now in force and fundamentally changing healthcare procurement from 1 January 2024, this article looks at how remedies have changed for procurements under the PSR.

As we have written about previously, remedies under the PSR look different from before. Previously, under the Public Contracts Regulations 2015 (PCR), healthcare providers could issue a procurement challenge at Court before the contract was signed with the winning bidder and obtain an automatic suspension on contract signature. This remedy stopped the contract being signed without Court approval or the claim being resolved. Disappointed bidders could also claim damages and other remedies under the PCR.

In the parallel new Procurement Act 2023 (not yet in force) which will still apply to many health-related public procurements depending on the value and subject matter, the automatic suspension remedy is retained and amended, as are other remedies such as damages. However, for healthcare procurements under the PSR, these remedies are no longer available and there is now a new regime in force. 

In summary, the new PSR regime is a standstill period with more obligations on Authorities to engage with disappointed bidders and provide more information + an NHS Review Panel called the Independent Patient Choice and Procurement Panel. The remedy of last resort for a provider at Court under the PSR will be Judicial Review.

Given the difference in remedies between the PSR and the new Procurement Act 2023, it will be important to understand exactly which procurement legal regime applies to any given health-related procurement.

The Standstill Period under the PSR

The standstill period is set out in Regulation 12 of the PSR. The Authority publishes its intention to award a contract and then the standstill period starts the next day. Given the reduced PSR remedies regime, this standstill period is now even more crucial for healthcare providers who wish to question the outcome of a PSR procurement process.

The standstill period is a period where the Authority cannot sign the contract and lasts a minimum of 8 working days. This used to be 10 non-working days but has been changed to 8 working days in the PSR.

There won’t be a standstill period for all the new procurement processes in the PSR. The standstill period applies to Direct Award Process C, the Most Suitable Provider Process and the Competitive Process. 

If a provider wishes to raise an issue with the outcome of a PSR procurement process, then it must act in this standstill period by making written representations to the Authority. Eight working days is a short period of time so from a provider perspective it is important to review outcomes quickly and seek advice on its position urgently if required. The representations must be received by the Authority before midnight on the eighth working day of the standstill period. From a provider perspective, it will likely be preferable to make these representations as detailed as possible and request documents relevant to the decision-making process in the procurement.

The Authority must then review the representations in the standstill period and the statutory guidance states that Authorities should, where possible, ensure that representations/ decisions are reviewed by individuals not involved in the original decision. 

There are specific requirements in the PSR on Authorities in relation to the standstill period. For example:

  1. Authorities must build time into the procurement process to complete the standstill steps which might involve a prolonged standstill period.
  2. Authorities must consider representations and clarify them with the bidder if not clear.
  3. There are express record keeping requirements and Authorities must provide certain decision-making documents in the standstill period if requested by a provider. Regulation 24 of the PSR sets out what an Authority must keep a record of and includes for example the decision-making process followed, including the identity of individuals making decisions, and the reasons for decisions made under the PSR.

After reviewing and considering the representations, an Authority must then decide whether to continue with award, abandon the procurement, or return to an earlier step of the procurement process. It must communicate whichever decision it takes promptly.

Returning to an earlier step in the procurement process was relatively common in challenges under the old PCR regime. It is likely going to be a useful remedy under the PSR as well. For example, in Direct Award process C, this could be a re-consideration of whether the existing provider “will likely” satisfy the proposed contract to a “sufficient” standard. For the Most Suitable Provider Process, this could be the Authority re-visiting whether it does have all the relevant information to identify the most suitable provider – they might for example go back and consider the provider making the representations in more detail. For the competitive process, it could be a re-scoring of bids for example.

Once the decision on whether to continue, abandon or return to an earlier step in the process is communicated to a provider, there must be at least 5 working days before the standstill closes. This is so if the provider remains unsatisfied, it can take up its complaint with the Independent Patient Choice and Procurement Panel within those 5 working days.

The Independent Patient Choice and Procurement Panel

Despite the PSR now being in force, many of the details of the new Panel are yet to be published. The Panel is provided for in Regulation 23 of the PSR (and in the statutory guidance on the PSR): “a relevant Authority may seek or otherwise receive independent expert advice.”

The key is that a provider must think the PSR has not been applied correctly even after receiving a response to its representations from the Authority in the standstill period. A provider must apply to the Panel using a pro forma that is yet to be published. The Panel is being made available by NHS England. A Chair was appointed recently, Mr Andrew Taylor. Mr Taylor was previously a Director of the NHS Cooperation and Competition Panel (CCP), an independent advisory panel, from 2008 to 2011 so has previous experience of these types of review panels.

Key to the success of the Panel will be the acceptance criteria for a Panel review, which are not yet published. If accepted for review, the Panel then reviews the representations and shares advice with the Authority about whether the PSR has been applied correctly. Panel advice can be published so this may be a useful precedent bank in the future. The statutory guidance provides an indicative timeline for the Panel to provide the advice (25 working days). 

Whilst the Panel reviews, the standstill period remains open but in exceptional circumstances there can be contract award before Panel advice.

The Authority will then review the Panel advice and then decide again whether to return to an earlier step of the procurement process, abandon the process, or award the contract as originally intended. There then should be another 5 working days before the standstill period ends and the contract is finalised. 

If a provider is still not satisfied following the Independent Patient Choice and Procurement Panel, then the likely option at that point would be a judicial review. The grounds for judicial review are though more limited than providers will be used to under the old PCR regime.

Comment

The remedies regime under the PSR is a move away from the old regime and is different to the Court based remedies regime of the Procurement Act 2023 coming into force later this year. It will therefore be important to know precisely which legal regime applies to any health-related public procurement.

The move to a more streamlined largely non-Court process under the PSR with a second pair of eyes from an independent review Panel may be very welcome to a lot of providers who may have previously been reluctant to challenge decisions at Court. The PSR review system may therefore be busy in the early period of the new regime as Authorities start applying the new law. Judicial review of decisions will still be available, and it will be interesting to see if judicial review claims are common under the PSR or whether the Independent Patient Choice and Procurement Panel successfully resolves provider concerns with healthcare procurements.

Please contact Burges Salmon’s specialist healthcare team if you require any further information on the PSR.

Key contact

Richard Binns

Richard Binns Partner

  • Dispute Resolution
  • Procurement Disputes
  • Healthcare

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