Competitive Dialogue

The technical detail of NHS procurement is not going to make the most inspiring blog for the majority, so it’s with trepidation that I write this post about what we’re doing in Luton at the moment.  Due to the specific procurement process I’m writing about still not being complete, I have to be careful about some of the detail, but I will either update this post in the future, or write again on the subject (unless there’s a significant ground-swell of opinion that I don’t!).  If you do want to read about some of the more technical details, the Procurement, Patient Choice and Competition Regulations are what you’re after.  These regulations implement Section 75 of the Health and Social Care Act 2012 and are updated by more recent European Regulations.

Clinical Commissioning Groups (CCGs) are clinically led local organisations that know the area in which they are working, and so are able to commission services that are specifically required by the population that they serve.  CCGs are responsible for commissioning the following services in their 'patch':

• Urgent and emergency care (for example, A&E);
• Elective hospital care (for example, outpatient services and elective surgery);
• Community health services (services that go beyond GP);
• Maternity and newborn; and
• Mental health and learning disabilities.

CCGs can commission services from a range of providers, including from the voluntary and private sectors.  Anybody that provides these services must be registered with a regulating body, such as the Care Quality Commission.  That’s a terribly brief description of CCGs adapted from NHS England’s Understanding the New NHS; more detail on the full commissioning cycle here.

When a CCG is ready to ‘procure’ (buy) services as part of its commissioning of services, there are a four possible procurement procedures used to award contracts under the legislation and regulations cited above, which are:

• ·     OPEN – The open procedure is suitable for simple procurements where the requirement is straightforward and the provider market is not very large. It is most commonly used in practice for the purchase of goods where the requirement can be clearly defined. As there is no "pre-qualification" of bidders, anyone can submit a tender and it is possible that a large number of provider will bid. The open procedure is more suited to a small provider market.
• ·     RESTRICTED – Consider the restricted procedure where you want to "prequalify" providers based on their financial standing and technical or professional capability so as to narrow the number of providers permitted to submit bids. Where the restricted procedure is appropriate, you should be able to specify your entire requirement now such that, based on your invitation to tender, bidders will be able to deliver a fully priced bid without the need for any negotiations following receipt of the bid.
• ·     NEGOTIATED – Following the Public Contracts Regulations 2006, the negotiated procedure can only be used in extremely limited circumstances, for example, where the contract is for a genuinely unique type of solution and there is only one capable provider in the market;
• ·         COMPETITIVE DIALOGUE – The competitive dialogue procedure can only be used in limited circumstances. It may be appropriate where: (1) the contracting authority is unable to produce a complete specification of requirements without discussing its needs in detail with providers (but iterative discussions with bidders should allow a detailed solution to be specified); and (2) where the solution is likely to be particularly complex and will require dialogue with bidders to conclude. The competitive dialogue procedure is generally used for very complex procurements.

If you’re still awake, congratulations, thank you and now keep reading...

The Luton CCG Board took a decision that in reprocuring our mental health and community services we would use the Competitive Dialogue process.  This decision was based on both the complexity of the services and our desire to work with potential providers to develop specifications for the services based on their expertise of what was innovative, possible and personalised to the needs of local people.  The way that this works is that rounds of dialogue are held with bidders, clarifying and honing ideas, until the best fit to achieve our required outcomes is arrived at.  This iterative approach represents best practice in procurement, as there is flexibility to shape services throughout the process, through patient and public engagement and through ideas from potential providers and commissioners, before finalising service specifications.

There are a range of ways in which you can approach this, but for us in practice this has meant that once the initial prequalification* stage was passed by potential providers we met with them one at a time to discuss what we wanted for our population and what they could potentially provide; formal written bids were then submitted, which were scored and any providers who didn’t meet a necessary minimum score dropped out.  The next round of ‘dialogue’ is currently in progress, but to a more detailed level, including providers sharing proposed service specifications.  Further formal written ‘bid’ documents will then be submitted and scored. Following a final executive-level panel meeting between bidders and commissioners, a proposal will be made to the Board to agree a preferred bidder and then contract negotiation starts.  We report regularly to our Board to update on progress with this procurement.  The latest Board paper summarising progress to date is here.

This whole process may all sound a bit complicated, and it is!  There is a lot at stake, with many tens of millions of pounds of public money involved in the potential contracts for these services and more importantly the potential benefit to the people of Luton and their health.  One significant thing that we have learned so far from the process is that it is definitely worth all the complexity and hard work.  We intend on getting really high quality services as a result, which are focussed on meeting the needs and achieving positive outcomes for our local population.  We have particularly valued the involvement of members of the public throughout the whole process and the contribution they are making to this being successful.  An element of the public involvement we have run was our ‘Big Conversation’.  The whole approach we’ve taken to involving the public in this procurement may be a subject I blog about in the future.

The procurement continues and I’ll provide an update in a future blog.

(*Preliminary stage in a bidding process where it is determined if a provider has the requisite resources and experience to provide the service as required.)