The healthcare industry is a gold mine for public sector procurement suppliers. Provided they understand the procurement process is different to most other public sector industries and know how to work within the strict regulations.
SMEs can be heartened that there are plenty of small or low-value contracts available that will suit them to a T. This post is a guide for SMEs (and other enterprises) to navigate the bumpy healthcare procurement landscape.
NHS Provider Selection Regime (PSR)
The PSR, which was introduced in January 2024, is a statutory process that oversees healthcare procurement in England. It’s like a how-to guide for public bodies that commission services, products, or works from private sector companies and other organisations.
Its purpose is to provide a flexible procurement process that enables NHS contracting authorities to award tenders to suppliers whose bids include the well-being and safety of patients. It covers the integration, collaboration, and transparency of healthcare systems and reduces procurement-related costs and admin.
Selection and Award Process
There are three primary tender award processes, but the direct award process is divided into three categories.
Direct award process
It’s most often used to renew contracts with existing suppliers when it makes no sense to switch providers. It’s divided into:
- Direct award process A: The current provider is the only one who can successfully deliver services, products, or works.
- Direct award process B: Patients can choose from many healthcare providers. The commissioner then awards contracts to suppliers that meet the service requirements.
- Direct award process C: The current supplier continues to meet the conditions of the contract to a high standard, and the contract will continue unchanged.
Most suitable provider process
It’s like the direct award process because commissioners can award contracts to a preferred bidder without using a competitive process. Provided they can identify the most suitable providers from a pool of potential suppliers.
Competitive process
Commissioners award tenders to suppliers who meet basic selection criteria and five key criteria. Basic criteria include financial health and technical ability. Key criteria are:
- Quality and innovation
- Value
- Social value
- Integration, collaboration, and service sustainability
- Improved access to healthcare services, eliminating healthcare inequalities, and facilitating choice
Weighting
Weighting is the importance assigned to criteria. For instance, social value has a mandatory minimum weighting of 10%. Commissioners must include weighting in the tender notices, so suppliers know what to prioritise.
The Challenge for SMEs Tendering for NHS Contracts
Because commissioners can stick with current suppliers, it’s difficult for potential suppliers to get a foot in the door. This is particularly challenging for SMEs that might not have the resources or capacity to compete with more experienced incumbents.
There are a few options for business owners who feel the PRS doesn’t favour SMEs.
They can challenge the decision. However, their chances of success are relatively small because the PSR requires full transparency in contract award decisions. This is precisely to withstand scrutiny, ensure accountability, and (ideally) prevent challenges from unhappy suppliers.
Moreover, commissioners are encouraged to provide early or pre-market engagement opportunities. This presents SMEs with the chance to meet and get to know buyers and talk shop. Both parties benefit from greater insights into the market and can set realistic expectations in new tenders.
Engagement also drives collaboration and innovation, as stakeholders come together to solve pain points in new, more efficient ways.
Common Bidding Mistakes SMEs Must Avoid
Bidding on healthcare tenders is challenging enough without handicapping yourself with mistakes.
Mistakes to avoid:
Not understanding what’s required. Read the tender documentation completely and then read it again, but take notes and ask clarifying questions if necessary.
Passing over social value. It’s a critical component in all public sector contracts, so be proactive and start or join existing movements with a strong healthcare focus. It establishes your reputation as a supplier who cares.
Forgetting about innovation. Innovation is highly prized by the NHS. Focus on improving patient care, e.g., upgrades to diagnostic equipment or streamlined processes that enhance nursing services.
Not providing sufficient proof of past performances. Public sector organisations are risk-averse, the NHS even more so. Provide recent case studies and client testimonials to prove you have the capacity to deliver the project.
Not following the format and structure. Tender documents are formatted and structured so it’s easy for commissioners to read your response and ensure you’ve completed each question as required.
Stuffing in industry jargon. Commissioners and other buyers aren’t likely to be specialists in your field. Your response must be as user-friendly as possible. Don’t use jargon that laymen won’t understand.
Missing the deadline. It’s difficult to believe, but this is one of suppliers’ most common mistakes. Healthcare commissioners very seldom grant extensions. The circumstance has to be exceptional. I forgot, won’t cut it.
Compliance in Healthcare Procurement
Non-compliance with regulations is another very serious mistake suppliers make. This often results in disqualification and if suppliers make a habit of non-compliance, they could end up debarred.
Mandatory regulations include:
The Procurement Act 2023
The Act contains many new and updated public contract regulations that suppliers must understand, including social value and data protection.
On that note, healthcare bodies and suppliers must adhere to the General Data Protection Regulation (GDPR) for robust data protection systems.
Cyber Essentials certification is another mandatory data security regulation in the tender process.
The Care Quality Commission (CQC)
The CQC sets healthcare standards in England. Criteria for service delivery and care standards are very strict, lives are at stake, after all.
There are also the NHS (Procurement, Patient Choice, and Competition) Regulations 2013 and the Modern Slavery Act 2015.
ISO Certifications
ISO is an international standards organisation that covers many aspects of industry. ISO 27001 covers information security management, for example. ISO 9001 covers quality management systems. ISO 13485 is medical devices certification and ISO 14001 sets environmental management standards for businesses up and down the NHS supply chain.
Types of Healthcare Tenders
Different healthcare organisations have different types of tenders and tendering processes.
NHS England purchases tech (machinery and equipment), software and cloud services, digital products and frameworks, and clinical services, like waste management and disposal.
NHS England also invests in training, education, and professional corporate services, like consultancy, legal services, human resources, and energy management.
The Medicines Value and Access Directorate is responsible for purchasing medication. Integrated care systems, including acute, mental health, community, primary care providers, etc., are considered separate contracting authorities and manage their own procurement processes.
Where to Find Healthcare Tenders
You can find healthcare tenders in all the usual places, like the government’s Contracts Finder and Find a Tender platforms. You can go old school with networking at events or digital with independent online procurement platforms, like S2G. They offer much more than tender alerts. For example, S2G also offers training services and Cyber Essentials certification.
The NHS also has an eCommercial system called Atamis. It provides tender, contract, and supplier management tools for buyers, and supports the different stages of procurement planning. Suppliers can use the system to directly engage with NHS organisations, but it provides another handy tool.
The Evergreen Sustainable Supplier Assessment shows suppliers where they stand sustainability-wise. It’s more than that though. It also opens lines of communication with the NHS, so suppliers can learn more about aligning their sustainability efforts with NHS net zero goals.
Supply2Gov Optimises Healthcare Procurement for SMEs
The criteria for healthcare tenders might be strict, but the challenge isn’t insurmountable. S2G has tools and services that support SMEs on their procurement journey. We can help you reach your goals, regardless of whether you want to corner your local market or have your sights set on bigger targets.
Visit our site for more information on our services and register on our platform to start optimising your procurement strategy today.