We are occasionally asked to explain the ins and outs of the NHS tendering process by organisations who are new to NHS procurements. Here is a brief overview for anyone who falls into this category or who just needs a reminder! Please note that this blog covers the process for healthcare services e.g. the delivery of community services, GP services and urgent care services. The process used by NHS Supply Chain to procure healthcare products is covered in our blog “Bidding to list products on an NHS Supply Chain framework” .
Who commissions NHS tenders?
NHS healthcare services are commissioned primarily by local clinical commissioning groups (CCGs). Each CCG represents a group of local GP practices and local Primary Care Networks and their diverse local populations, for whom they commission services. As of April 1st, 2020 there were 135 CCGs in England, each of which commissions services for around 250,000 people (on average). Services commissioned by CCGs account for around two-thirds of the total NHS England budget, or £79.9 billion in 2019/20.
Primary care services e.g. GP and dental services and certain specialised services e.g. for rare and complex conditions or cancer screening programmes or offender healthcare in prisons, are commissioned by NHS England and NHS Improvement (NHSE&I). Public health contracts e.g. for school nursing and health visiting, are commissioned by Local Authorities.
Stages in the NHS tendering process
A typical NHS tendering process will include some or all of the following steps:
1. Issue of prior information notice (PIN)
Some commissioners will release a PIN to provide advance warning of their intention to launch an NHS procurement. A PIN may be issued up to 12 months in advance of the procurement, although typically the lead time is 6 months or less. At this stage, commissioners may ask potential bidders to make an expression of interest.
2. Issue of contract notice
Commissioners announce the launch of a procurement by issuing a contract notice. Each notice contains at least some basic information about the contract and details next steps e.g. how to register for a market engagement event.
There are several websites on which you can find listings of NHS contract notices (and PINs). The Contracts Finder website is managed by the government, is free to use and lists all UK public contracts worth over £10,000. It is definitely worth exploring and enables search by sector, geography, keywords etc. If you register on the site, you can also set-up email alerts for contracts which meet your specified criteria.
The NHS long-term plan identified Integrated care systems (ICSs) as a key development to bring about major changes in how health and care services are planned, paid for and delivered. ICSs are partnerships that bring together providers and commissioners of NHS services across a geographical area with local authorities and other local partners, to collectively plan and integrate care to meet the needs of their population.
From April 2021 every area of England should be covered by an ICS which means commissioning will become more strategic. Once we know more about the impact of this on the tendering process, we will describe it here.
3. Market warming or market engagement event(s)
Either prior to a procurement commencing or soon after the procurement has started, commissioners may invite potential bidders to a market warming event. Here, the commissioners will describe the background, objectives and scope of the contract and will usually open the floor to bidders’ questions. During the Covid pandemic, these events have typically been held via video conference.
Increasingly and especially on larger or more complex contracts, commissioners may seek the input of potential bidders to help shape the contract and the procurement process. This is usually done by asking providers to split into small groups to discuss e.g. whether and how the contract should be broken into lots or how providers might tackle specific challenges related to the contract. A commissioner representative will typically join each group to document the discussion.
If you are seriously interested in a particular contract, you should always try to attend these market warming events. They are a great opportunity to meet commissioners, ask questions, identify competitors and potential partners and potentially to influence the contract specification.
4. Issue of selection questionnaire (SQ)
The SQ (which has replaced the older pre-qualification questionnaire or PQQ) is used to ensure that only suitably qualified candidates proceed to tender submission. The SQ is divided into 3 sections:
- Part 1 Potential supplier information
- Part 2 Grounds for exclusion
- Part 3 Selection questions (covering financial standing and technical capacity)
Parts 1 and 2 are entirely standard while part 3 can be tailored by commissioners, usually through adding procurement-specific questions.
The good news is that the SQ reduces the burden of responding to a procurement opportunity. It does this by providing a common template and also through self-certification – supporting documents e.g. audited accounts are typically only required to be produced by the winning bidder.
5. Invitation to tender (ITT)
This is the heart of the NHS tendering process and where bidders have to do a lot of work! A typical set of ITT documents will include:
- Instructions to bidders. This is a key document. Each ITT is different and may have very specific directions concerning response formats. Also provided will be a breakdown of scores by question and a procurement timetable showing the deadline for clarification questions, the deadline for responses, contract award date and service commencement date.
- Contractual documents, including conditions of contract, statement of non-collusion etc.
- Service specification.
- Technical questions to be addressed by the bidder, usually broken into several sections, reflecting the nature of the service being procured e.g. service model, workforce, clinical governance and quality, IT. The response for each question is likely to have a strict word limit, typically from 500 – 2,000 words.
- Pricing schedule.
6. Presentations and interviews
Once tender submissions have been scored, bidders may be invited to present to commissioners and /or be interviewed by commissioners. A percentage of overall marks e.g. 5% may be dependent on performance at this stage.
7. Announcement of preferred bidder and contract award
Once commissioners have identified a preferred bidder, there is a cooling off period during which unsuccessful bidders may challenge the tendering process. The tender outcome will not be publicly announced until after the cooling off period.
How are NHS tenders evaluated?
Most NHS tenders are evaluated, or scored, on two dimensions, “Quality” and “Price”. The bidder who promises to deliver the best mix of Quality and Price (the “Most Economically Advantageous Tender” or MEAT) will win the tender (subject to possible challenge by other bidders).
Quality typically accounts for around 60% – 70% of the overall score and Price for around 30% – 40%. The Quality component is assessed by scoring each bidder’s responses to the narrative questions in the tender. The Price component is often assessed by 1) identifying the lowest price and 2) scoring all other prices relative to the lowest price. The instructions to bidders will describe the precise scoring mechanisms.
Common variations in the NHS tendering process
Other variations or steps in an NHS tendering process may include:
- Competitive dialogue. Selected bidders may be invited to submit an initial, less detailed tender or “outline solution” and to meet with commissioners in a ‘dialogue session’ to present this outline solution. This meeting will usually also allow bidders to ask detailed questions. Bidders will then prepare and submit final tenders, informed by the dialogue process.
- Framework agreements. These are used for services which are being commissioned in multiple locations. Following tender submission, successful bidders are placed on a framework, rather than immediately being awarded a contract. Once on the framework, bidders may participate in ‘mini-tenders’ as services for different locations are called-off against the framework.
- Any qualified provider (AQP). Successful bidders are granted AQP status and patients choose their provider from amongst the list of successful organisations.
- Single stage procurements, which combine the SQ and ITT to save time and costs.