Competitive tendering (CT), together with the Any Qualified Provider (AQP) scheme, are now set to become key instruments for commissioning NHS services in England. Members will need to understand what these terms mean and how their services may be affected.
The government's stated intention is for any NHS services in England to be potentially subject to Any Qualified Provider (AQP) or to Competitive Tender (except in certain specialist areas, such as Accident & Emergency) by April 2013.
All CSP members, and service managers, need to be aware of AQP and CT developments in their local area".
Competitive tendering is not new: many NHS services have been subject to the tendering process and have been tendered outside the NHS over the last 20 years. During the last 5 years, there has been an increase in the number of clinical services subject to CT.
What is Competitive Tender?
In order to tender a service, managers/commissioners begin by drawing up a specification, setting out the delivery targets, expected outcomes, and penalties for failure to meet these. They would not specify a price.
Next the specified service would be advertised on the supply2health website as well as in local media, newspapers, and/or on trust websites, inviting expressions of interest. Prior to their participation, organisations may be expected to sign a confidentiality agreement, confirming that the costs of this process are to be borne by the organisation wishing to tender for the service.
The CT process requires any potential provider to submit a tender containing the proposed price for service activity. Initial applications would be examined, followed by short-listing of preferred bidders, and a rigorous interview, before the chosen provider is announced.
Commissioners would usually award the contract to one selected provider, for a defined period (usually between one and three years), and commonly with a six month notice of termination by either side. The level of activity required, performance monitoring frequencies, terms, and cost, would be defined within their agreement.
The tender process is open to both NHS and non NHS providers, for example independent practitioners, private companies, voluntary sector providers, or Social Enterprise Companies (SECs). The process is required to meet European public sector procurement guidelines and standards.
Competitive tendering seeks to achieve the best value for money for local services and populations.
Implications
The impact of CT has already been felt by physiotherapists working in the NHS. Some providers have gained contracts, whilst others have lost.
Members in the private, independent, and third sectors have also faced new challenges, as they engage with the public sector tendering process.
Whether tendering processes currently apply to your service, or not, it is critical that any service, in any sector, can demonstrate that it is fit for purpose, eg that it:
- is responsive to patient and population need
- represents value for money
- is both cost, and clinically, effective
Employment Implications
When a non-NHS provider wins a contract to provide NHS services staff will almost certainly be protected by TUPE (Transfer of Undertakings (Protection of Employment) Regulations.
This means that they will retain their current employment terms and conditions at the point of transfer but not necessarily their NHS pension. It is very important that members facing a possible transfer make sure their local CSP steward is alerted to what is happening, who in turn will be able to keep their CSP senior negotiating officer informed of developments.
Further resources
- Tendering briefing: this briefing covers the various stages that may be used in a competitive tender process
- Competition in the NHS in England - a checklist: advice for stewards
- Your business - resources to help you demonstrate the cost effectiveness of your service
- AQP 3 - provides definitions and context for AQP and Competitive Tendering
- TUPE: The Transfer of Undertakings (Protection of Employment) Regulations - CSP briefing
- Alternative providers of NHS services - further information on employment implications
- NHS Staff Passport Toolkit - an online toolkit designed to provide staff facing transfer with an easy to use, practical guide to their employment standards and rights