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When do commissioning consortia need to tender and what is the process?


25 March 2011

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Commissioning consortia will be ‘contracting authorities’. This means that when they are considering entering into contracts for the provision of goods and services, they need to
consider whether there is a requirement to put the contract out
to tender using one of the standard EU procurement procedures.

The EU procurement rules apply to a broad range of
services contracts. However, there is a difference in approach
depending on whether the services are categorised as “Part A”

Commissioning consortia will be ‘contracting authorities’. This means that when they are considering entering into contracts for the provision of goods and services, they need to
consider whether there is a requirement to put the contract out
to tender using one of the standard EU procurement procedures.

The EU procurement rules apply to a broad range of
services contracts. However, there is a difference in approach
depending on whether the services are categorised as “Part A”
or “Part B” under the directives.

Part A services are subject to the full rigours of the EU
procurement regime where the aggregate value over the
lifetime of the contract exceeds the relevant threshold
(currently in the region of £101,000), whereas Part B services
(which includes healthcare) have historically been subject to
a lighter touch and until relatively recently, few contracts for
healthcare services were put out to competition.

However, in recent years, case law subsequent guidance
suggested that the distinction between the requirements to
tender contracts for Part A and for Part B services was being
broken down and that, for all intents and purposes, a similar
tender exercise would have to be run in either case, provided
the services were above the relevant threshold.

At the same time, Department of Health (DH) policy
developed to encourage competition and choice within the
NHS market. The Co-operation and Competition Panel
(CCP) was established to oversee the proper application of
DH procurement policy (as well as mergers and acquisitions).

However, the remedies available to the CCP are relatively
limited as it essentially acts as an adviser to the strategic health authorities and Monitor, and therefore currently depends on system management as opposed to legal recourse to implement its decisions.

More recent case law from Europe suggests that the
distinction between the procurement regime as it applies to
Part A services and the lighter touch Part B approach should
be maintained. It is only where Part B services are likely to
attract ‘cross-border’ interest from organisations established in
other Member States that EU guidance suggests a competitive
tendering exercise is required under EU law. It will therefore
be interesting to see over the next few months whether EU
developments and national policy and the provisions for
increased competition and procurement scrutiny under the
current Health Bill continue to converge or diverge.
 

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