In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
The light-touch regime in brief
The new regime applies where commissioners have a requirement for over £625,050 of health or social services. This will probably catch most frameworks and contracts for health and social care.
Opportunities must be advertised through OJEU by way of a Contract Notice or Prior Information Notice (PIN). Just advertising on a procurement portal will no longer be sufficient. It is however permitted to advertise opportunities in bulk through quarterly PIN Notices, in order to reduce the administrative burden.
Commissioners are then free to design a procedure to allow the award of the contract, as long as the procedure complies with the principles of equal treatment and transparency, as well as ensuring that the time limits imposed during the process are proportionate and reasonable.
So what has changed?
The old Part B regime exempted commissioners from the requirements of the full procurement regulations. In our experience, few commissioners were able to take advantage of this to embrace innovation in procurement, particularly when significant service redesign meant that there would be high numbers of disappointed bidders. The risk of challenge was often perceived to be too great. This meant that most processes followed closely the full Part A regime which is arguably not flexible enough to meet the needs of the health and social care sector. There is now an opportunity to change from this approach.
As well as designing the process, the light touch regime allows commissioners to use a wider range of award criteria compared to standard services procurement: two of the more exciting opportunities are to use “innovation” and “service user involvement and empowerment” to award marks.
There are new obligations placed on commissioners to prepare a report on how the process has been run and as to the level of feedback required to all bidders at contract award stage.
How can commissioners capitalise on the flexibility?
Having the flexibility to design a suitable process could result in higher quality tenders and better engagement with the market. For instance, commissioners could design a process involving both short dialogue and negotiation sessions, allowing the market to respond by shaping solutions to requirements in an innovative and efficient way.
The wider range of award criteria allows commissioners to reward innovation. This could include awarding marks to providers who are able to leverage social investment or encourage greater use of technology. Marks can also be awarded for providers who are able to put forward effective proposals for the involvement and empowerment of users. This could, for instance, allow users to determine how and when their services would be provided or the approach of the carer to their needs.
As long as commissioners take full advantage of the flexibility available in designing procurement processes, opportunities will arise for commissioning to play its part in navigating the multiple funding and quality challenges within the care arena.
The light-touch regime, if used flexibly and to its full advantage, could represent a positive change in the way health and social care contracts are procured, delivered and financed. This requires commissioners to create new processes that make full use of the new rules. In order to reap the benefits of flexible and innovative procurement, those in leadership roles within the sector need to be getting to grips with the possibilities available, so that a more “bespoke” procurement approach can be taken in a safe environment.
Of course, with flexibility comes risks but it is considered that these can be managed effectively by taking early advice and that commissioners should not lose sight of the obvious benefits of a more flexible approach.
For more information
Contact Andrew Lancaster.
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