Mark Vipan says changes in the law and the current economic climate have led to a huge rise in legal challenges to NHS IT procurement decisions in recent years.
Vipan is a lawyer with DLA Piper– a firm that represents the Department of Health and increasingly works for individual trusts when they are challenged on their procurement processes.
As the latest round of reforms bed in, trusts start to respond to the policy and business pressures on them, and the National Programme for IT in the NHS starts to wind down, many more tenders are being issued for big IT projects. However, Vipan thinks that the ability of trusts to run procurements in-house is “patchy”.
“Many people have not had the experience of undertaking this kind of work for a long time, and those running procurements and negotiations have multiple other responsibilities in their trusts, so they can devote limited time to these things,” he explains.
“When they start embarking on more complex procurements like large IT services they can get themselves into difficulties.”
Law and money
Vipan says that, historically, IT companies have not been keen on making a challenge when they felt a procurement decision was unfair. But in recent years he has seen “very significantly more challenges then there used to be.”
“They (companies) used to be a bit disgruntled but would not challenge, but the legal landscape and the market’s appetite to challenge, is much higher than it used to be - so it’s much higher risk (for trusts),” he says.
Three years ago, European Union legislation around challenges was changed to make authorities more accountable for procurement mistakes; and Vipan admits that lawyers have “promoted the availability of that legal right to suppliers.”
At the same time, the economic problems triggered by the financial crisis that started five years ago, have raised the stakes for businesses.
“Every pound spent in a bid that didn’t succeed is a pound lost to the business,” Vipan points out. “They [bidders] have to explain to their masters why they lost, and if they are not fairly treated they are more aware of the legal remedies around challenges.”
Vipan says the law in this area is very specific and complex; so almost every procurement will be technically flawed in some way. Most challenges are about technical breaches and are resolved by the procuring organisation providing more information about a process.
“A lot of them [challenges] are sorted out through correspondence. The ones we see are when people are forced to re-do a stage. If things are flawed, they have to go back to a previous stage and invite a new submission that they score properly and it could lead to a different result.”
But the deals are out there
Vipan adds that companies used to get a decision suspended by the courts, meaning that a trust could not move forward with its chosen supplier.
But trusts have pleaded that this may put patient safety at risk, and are now generally able to continue with a procurement while the legal dispute continues in the background.
While the DH provides a lot of guidance around some contracts, such as private finance initiatives, Vipan says trusts are otherwise “largely left to their own devices.”
“That’s the difficulty for them. Often they don’t have sophisticated advisers; they don’t do these regularly; and don’t have a track record to realise what they don’t know,” he argues.
Channel 3 director of strategy Brian Gorman has also observed a significant rise in the number of challenges, which he says can add months to a tender process – a huge issue when a trust’s existing service is due to expire.
NHS organisations are entering into complex commercial negotiations with highly experienced suppliers regarding significant sums of money and are sometimes out of their depth, he believes.
On the bright side, the end of the national programme means a very competitive marketplace is opening upandmany companiesare very keen to gain a “footprint” in the NHS.
“Trusts who get their act together, start early and get decent advice can get some very attractive deals,”Gorman insists.
“We have seen people not exposed to the market who are very keen to get back in and are stretching themselves to put in some very compelling bids.”
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