Since the publication of the five year forward view there has been a push to bring NHS organisations together in new ways to deliver integrated services. The NHS market has seen new models of care, created population budgets and designed capitated payments. All geared at creating provider groups that can deliver all the care a local population needs. Planning guidance has reinforced this by introducing the concept of STPs. But how do commissioners ensure these newly formed provider groups will win the contracts they now award?

The default setting for awarding contracts under both the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations (the NHS Regulations) and the Public Contract Regulations 2015 (the PCR) is through a competitive process.

The award of commissioning contracts will be caught by one or both of those sets of regulations. So what happens if the newly formed provider group, carefully crafted over the last two years by local NHS organisations, doesn’t win that competition?

Both the NHS Regulations and the PCR allow contracts to be awarded to single suppliers, but only in limited circumstances. The NHS Regulations (Regulation 5) allow award to a single supplier without competition if the commissioner is ‘satisfied that the services.... are capable of being provided only by that provider’. The PCR (Regulation 32) allow an award without competition only where (i) a unique work of art is being created (ii) competition is absent for technical reasons, or (iii) exclusive rights need to be protected - but for (ii) and (iii) there must be no reasonable alternative. The PCR is more narrowly drafted and more strictly construed.

So what do the words in these two regulations mean in practice?

If you are a commissioner about to embark on procurement to award contracts to your local new model of care, are you sure you fit within Regulation 5 and/or Regulation 32? If you are an NHS organisation that has spent time and money integrating with your neighbours to comply with planning guidance, are you sure your contract award won’t be challenged?