Healthcare tender dispute shows need for greater transparency

Harrison Drury’s Healthcare Sector team, looks at a recent case in which two NHS trusts contested a county council decision to award a nursing services contract to another provider.

A successful action brought by two NHS Foundation Trusts provides a stark reminder to local authorities to ensure decision-making in respect of public contracts remains consistent and transparent.

Lancashire Care NHS Foundation Trust and Blackpool Teaching Hospitals NHS Foundation Trust were successful in their application to the High Court in November, under the Public Contracts Regulations 2015, in setting aside the public health nursing services contract awarded to Virgin Care by Lancashire County Council.

What happened in this case?

On 29 September 2017, the council published an advertisement for the nursing services contract and bids for the contract were made by NHS Lancashire Care, Blackpool Teaching and Virgin Care.

The terms of the competition set out the evaluation criteria for the contract which was divided into two sections, and each contained several questions carrying different weights.

The bids were assessed by a panel of evaluators, on individual score sheets, and then were deliberated during a moderation meeting in which they discussed each question and decided a consensus score, agreed by all the evaluators.

Why was the decision contested?

The trusts argued that the council was unable to articulate any consensus reasons for the scores for four out of the 14 questions and could not establish a complete and accurate account of the consensus reasons for any question.

The judgment held that the reasons given by the local authority were insufficient in law as they failed to abide by the principle of providing a full, transparent and fair summary of their reasoning.

What are the lessons for organisations running a tendering process?

Whilst there is no obligation for councils to disclose the notes of the mediation, they were held as being relevant in this case as the council relied upon them for setting out the written reasons for the evaluator’s decisions.

This case highlights the importance of taking a consistent approach to evaluation and ensuring that bidders receive clear rationale as to why they were unsuccessful.

Additionally, where the reasons provided are inadequate and deliberation is poorly recorded, this may constitute a sufficient material breach to the Public Contracts Regulations 2015 which could result in a contracting authority’s decision being set aside.

Harrison Drury’s Healthcare sector team provides a wide range of legal services to organisations, businesses and individuals in the healthcare sector. This includes advice on regulatory and disciplinary matters, dispute resolution advice, corporate and commercial services, property advice and employment law advice. To speak to a member of our healthcare team contact them on 01772 258321.