Commissioning for the NHS Health Check: Preparation to Procure. 5 November 2009

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1 : Preparation to Procure 5 November 2009

2 Agenda Market engagement and management When should you procure? What are the procurement options? Developing a procurement strategy

3 Market Management Should be strategic and planned Should be systematic not ad-hoc Should be early and open Aim is to gather market intelligence To test the programme aims

4 Use for programmes that: Involve business change for customers and providers Involve some level of uncertainty Extend to services in improved quality or reduced prices Require private sector involvement to influence the outcomes

5 The Process Customers must act in a fair and transparent manner Suppliers must not be involved in the drafting of specifications Discussions must not be to the advantage of any particular supplier

6 Customers Customers will bring to the table: Required or desired outcomes Programme risks and issues Expectations from suppliers

7 Providers Providers will respond with: An indication of how to achieve outcomes Risk management suggestions Feedback on feasibility Feedback on expectations

8 Market Management Market management is about: Understanding feasibility Understanding capability Understanding maturity

9 When should you procure?

10 When should you procure? When there has been a policy change When there has been a change in service delivery or technology To improve value for money To improve quality When there has been a fundamental change in the market

11 Recent and forthcoming guidance SOS recent statement that the NHS is the 'preferred provider' of services to the NHS See the various scenarios in the forthcoming Procurement Guide for PCTs Where services are being delivered well then no presumption that those services should be put out to tender Where new or re-designed services are to be procured, the process should be fair, transparent and nondiscriminatory and the NHS to be given opportunity to bid

12 What are the Procurement options?

13 Background Clinical services fall within part B of the Regulations (Public Contract Regulations 2006) Not subject to full application of the regulations Must meet the equal treatment and non discriminatory requirements of the EU Treaty Appropriate advertising remember Supply2Health.nhs.uk All clinical procurements to be fair, open and transparent PCT Procurement Guide supports customer decision making

14 Considerations When deciding whether to competitively tender Customers should consider: Estimated contract value Level of market interest and capability Government policy on protected services Individual programme circumstances

15 Procurement options: Open procedure Restricted procedure Competitive dialogue Negotiated procedure Any willing provider

16 Open Procedure Formal advert Any interested bidder (no prequalification) Very transparent Large number of potential tenders Administrative burden Not often used

17 Restricted Procedure Formal advert Prequalification process down to approx. 5 bidders who meet the minimum requirements (economic and financial standing and technical capability) No scope for post tender negotiations (just clarifications)

18 Competitive Dialogue Suitable for complex procurements where specifications and legal and commercial terms cannot be objectively defined Multi stage therefore bidders can be eliminated Minimum of 3 to dialogue stage No scope for negotiation once final tenders issued

19 Negotiated Procedure Generally replaced by competitive dialogue and only used in exceptional circumstances Clear justification required to avoid protracted negotiations distorting the competition Negotiations can continue after tender

20 Developing a procurement strategy

21 Developing Commercial Support Units Jill Peters

22 Commercial Operating Model key recommendations (CSU s) 1. Creating regional Commercial Support Units (CSU s) which will offer services to, and be owned by, the NHS locally. 2. Ensuring that the World Class Commissioning programme encourages Primary Care Trusts (PCT s) to develop regional CSU s with provider partners. 3. Ensuring that third and private sectors have a clear and visible point of commercial contact in each region. 4. Contributing to innovation, research, regional development and local regeneration.

23 CSU s Key Relationships National National Procurement Council Nationally Driven SMDU PICD NHS Supply Chain Regional Commercial Support Units SHAs CPH s Other Local Commissioners Providers Locally Led

24 Changing Landscape Training Learning & Development Delivery Innovation Procurement Market engagement and response System management

25 CSU s Functions Providing access to commercial skills to develop or support: Commissioners Providers Stimulating the market (comp 7). Procurement (comp 9). System Management (comp 10). Private sector access and engagement. Current and future business demands + cost management. Responding to competition/market tests. Product advice + best use of Supply Chain contracts. Informed procurement.