New Models of Care: Navigating the procurement landscape - DAC Beachcroft

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New Models of Care: Navigating the procurement landscape

Published 20 junio 2016

Procurement in the context of New Models of Care is getting a great deal of airtime at the moment.

Clinical Commissioning Groups ("CCGs") are looking at contracting in new ways in response to the Five Year Forward View's call for New Models of Care. This involves looking at different services and pathways and assessing how they can be integrated more effectively. Naturally, discussions are going to take place amongst current and existing providers initially.

CCGs will not get any "air cover" in relation to their procurement obligations under the Public Contracts Regulations 2015 (the "Public Regulations") and the NHS (Procurement, Patient Choice and Competitions) (No.2) Regulations 2013 ("NHS Regulations"). This means that if a CCG does directly award a contract for a New Model of Care without testing the market, it could face challenges from aggrieved bidders - either through a claim in the High Court, or a challenge raised through Monitor (now part of NHS Improvement).

We have been asked by some organisations how they can "get around the procurement rules". The key is that there is no need to "get around" the rules, because there are a number of ways that commissioners and providers can put in place New Models of Care within the rules.

Most capable provider route

Firstly, it might be the case that in creating a New Model of Care, the way that services are to be delivered to achieve the best outcomes for patients could result in there being only one capable provider or group of providers. In this case, the procurement rules do not require the commissioner to carry out a form of competition. This is not "getting around procurement rules" but would be acting in accordance with them. In those circumstances, we would always advise commissioners to ensure that they have properly assessed the market before determining that there is only one capable provider or group of providers.

Have you considered setting up a "Teckal" entity?

Another option might be to use what used to be known as the "Teckal" exemption which has been codified under the Public Regulations. This would allow NHS/public sector organisations to create a separate legal entity provided that the entity met the relevant tests under the Public Regulations in relation to ownership, control and function. If there is going to be any private sector (including GP) participation in the New Model of Care, then that private provider or GP could not be part of the entity that has been set up. The entity would, however, be able to procure services from the private providers/GPs.

Reminder of the flexibility of light touch

Finally, we want to remind commissioners and providers that health services are covered by the so-called "light touch regime" under the Public Regulations and under the NHS Regulations, it is for commissioners to determine the appropriate procurement route. Where the health services are valued over £589,148 and there is a market of providers, then other than having to advertise in OJEU and have a 10 day standstill process at the end of the procurement prior to award, commissioners are free to determine what might happen during that procurement process, provided it is transparent and providers are treated equally. This means that commissioners can be innovative with their processes, they can include dialogue and negotiation if they need to and they can create their own timescales provided they are reasonable and proportionate.


Procurement should not be the word that commissioners dread having to tackle– , there are ways to work within the procurement rules to award contracts to construct New Models of Care that could have a big impact on patient outcomes.

We are working with commissioners and providers designing New Models of Care, including designing procurement processes within the ‘light touch’ regime. If you would like to get in touch with any of us to discuss this further, please do not hesitate to get in touch. 

Key Contacts

Anne Crofts

Anne Crofts

London - Walbrook

+44 (0)20 7894 6531

Victoria Fletcher

Victoria Fletcher

London - Walbrook

+44 (0)20 7894 6658

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