Hello, and welcome to Talking digital health, a podcast by law firm Mills & Reeve, hosted by health and tech lawyers Sophie Burton-Jones and Charlotte Lewis.
Our aim is to discuss key topics of interest to those procuring tech in the NHS and those selling tech to the NHS.
I'm Charlotte Lewis. And I'm Sophie Burton-Jones, and we're your hosts for this episode.
We're delighted to be joined by Nathalia Pereira, principal associate in the Mills and Reeve’s procurement team, who specialises in public procurement law.
Nathalia, did you want to say hello?
Hello, thank you for having me.
We're delighted to have you. So in this episode of Talking digital health, we'll be talking about digital transformation in the NHS and specifically getting ready for a re-procurement for one of your existing digital health contracts and what could go wrong if you're not prepared and able to run a compliant re-procurement process. So just to set the scene a little, you ran a full competitive procurement process back in 2016 for one of your key IT systems, whether that be LIMS, PACS, EPR for example, and the contract is due to expire later in 2026.
You know it can't be renewed any further and you're going to need to put in place a new contract. And so you're thinking about what you need to do to achieve that. And here enters Nathalia as your expert, your trusted procurement advisor, and we're going to go ahead and ask her some questions as if we were you.
So first of all, Nathalia, I mean, we really like our current provider. Can we just stick with them when we go forwards?
Sadly, usually no.
Unless there are some good grounds for what we call a lawful direct award, so you know where you do not run a competition to award a contract directly, then usually you do have to run a competitive procurement. But relevant to kind of an IT type of contract, there might be an ability if only one person is technically capable of doing it or if there is some kind of exclusive rights or intellectual property reasons why only that provider can provide, that might be a reason to stick with your current provider, but generally, no, you have to start planning well in advance of the expiry of your contract, you know, working backwards from transition, working backwards all the way to maybe early market engagement, and then you have to go out to market.
We know what we want, should we bother with market engagement?
I would say market engagement is your friend, not just from a normal kind of best practice perspective.
There's lots of different names for market engagement, soft market testing, preliminary engagement, all that kind of thing. But essentially, a lot of it is to do with warming up the market. So you might know what you want, but does the wider market know what you want?
If you've had a contract for 10 years, wouldn't it be a good idea to kind of make suppliers aware of what you're looking for, give them an opportunity to learn a bit more about your specification or your requirement? And that in turn, that kind of increased awareness, particularly for complex requirements, that can be quite useful and it can encourage competition. And it can also help you to develop your documentation so you can find out what's available.
Maybe you can find out more about what might have changed during the term of your contract. So it can inform you when you're writing your documentation. So overall, if you've got time for it, and I suggest you make the time for it, definitely do some market engagement.
You mentioned documentation there. I mean, can we just reuse our old documents because we put a lot of time and effort into them originally and what we want hasn't really changed?
I do hear this a lot, and when clients have rehashed older documents, my diplomatic advice would be I really wouldn't just reuse old documentation. I would kind of challenge that and I'd say, has what you want really not changed since you went out to market?
In the scenario we're looking at, you know, you went out to market probably in 2014 or 2015 for your 2016 contract. Has what you want really not changed? Did your last procurement go brilliantly? Is there not kind of lessons learned that you might do things differently this time? Or are there certain things that you wish that you tested more looking at the life of the contract? So I would probably do a bit of a lessons learned or learning from experience exercise on the contract that you've got at the moment and on your previous procurement exercise to work out if you really can get away with reusing all documents.
Usually authorities can't. So I would say re-look at your specification, re-look at your requirement, see whether market engagement does inform things differently. And also I would recommend, you know, a legal review of those documents as well.
A lot can change since the last time you went out to procure.
Talking of specifications, Can the incumbent help us prepare the specification, knowing what we need from working with us for so long?
Yes, an incumbent can help you prepare, but it needs to be managed really carefully. And you ask the authority, kind of your responsibility to kind of take appropriate measures to make sure that if that supplier is then going to take part in the competition, that competition isn't distorted and it's really difficult for that incumbent supplier because they could inadvertently conflict themselves out of being able to compete later on. So there are certain things that you can do. The most common one is some kind of separation agreement or an ethical war, it's sometimes called, where you can have a separation between supply side team who's providing the service at the moment and a bid team and then having that separation between them and having kind of a protocol in place and the supplier would then need to understand that that would need to be in place all the way through to the procurement as well.
So, you know, some incumbents might not want to do that necessarily. So it is a bit of a negotiation really. But yeah, it is quite important not to make assumptions and to have those discussions. So yeah, absolutely need to have those communications and be really clear about what's required.
And then talking about the incumbent generally, we've heard that you need to level the playing field between the incumbent and other potential bidders? And what does that mean practically for us?
Yeah, that's a really good question. And it's something that I see authorities actually make a mistake on really a lot of the time. And I think the first thing to bear in mind is something that I call and other people call a fair advantage. So sometimes the incumbent supplier will have a natural advantage and that you can't do anything about that sometimes. However, when it does come to you kind of levelling the playing field, what you have to consider is practically, can you do it?
Is it technically viable for you to level the playing field in some way? And then the next question is, and we talked earlier about separation agreements, that's one way of doing it, but then you have to balance that out against, is that actually a proportionate thing to do? And there's been lots of cases where authorities have kind of bent over backwards, trying to make sure that they're making it fair for everybody, but in doing so, they've actually penalised the incumbent and they've then treated the incumbent unfairly. So you have to exercise some caution when you are going to take those practical steps to level the playing field and make sure that you're not going too far the other way. But in terms of the practical things you can do, say, for example, you know that the incumbent supplier has got access to certain information, which would be useful for bidders who are tendering.
The important thing to do there is make sure that you then share that information with all the bidders who are part of the competition but also allow adequate time periods for those bidders to actually review that information. That's a really simple way of making sure that you are levelling the playing field.
In that way, everybody's got the information and everybody's had a reasonable amount of time to review that. So there are practical things you can do, but I would say always think about whether or not you're being proportionate. It won't always be the case that you have to suddenly just say to your incumbent, you're not allowed to tender in this, or you've got to put in a separate bid team for this. That isn't always proportionate.
There's probably some basic things as well, aren't there, in terms of you're going to have an ongoing relationship with the incumbent during the process and separating out and not talking to them about the process as part of your day-to-day relationship and keeping those, like you said, information is only being shared through that tender process rather than just on a little chat because you are talking about an IT issue on your current contract.
Yes, absolutely.
Thank you very much, Nathalia, for joining us.
That was, as always, really, really interesting and useful and I have no doubt for those listening.
Obviously, at Mills & Reave, we are very happy to discuss any legal queries that you might have. about NHS digital transformation, including on procurement law, running a tender process, and what to do when things go wrong.
Our individual contact details are all available on our website at mills-reeve.com.
Thank you for joining this episode of Talking digital health by law firm Mills & Reeve.