Public sector procurement in healthcare is undergoing a major shift with the introduction
of the Provider Selection Regime (PSR) for relevant healthcare services. This new set
of rules, effective in England from January 2024, replaces the old procurement rules
under the Public Contracts Regulations 2015 (PCR) and the National Health Service
(Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 (PPCCR). If
you are a supplier in the public sector—especially in health care—you’ll want to
understand what this means for you and how it might differ from what you expect in
other areas of public procurement.
What Is the PSR?
The Provider Selection Regime is a regulatory framework that sets out how certain
public authorities (called “relevant authorities”) must arrange health care
services in England. These relevant authorities include Integrated Care Boards (ICBs),
NHS trusts, foundation trusts, local authorities, and NHS England. The PSR aims to make
commissioning more flexible, remove unnecessary competitive hurdles, and create stronger
partnerships among providers, especially in the NHS and social care arenas.
Under the PSR, awarding authorities have more discretion in deciding if and when they
need a full competitive tender. This could mean more frequent use of direct awards
where it makes sense for patient care, continuity, and system stability.
Why the Change?
Previously, even straightforward renewals of existing health care services had to go
through the Public Contracts Regulations or the older NHS-specific regulations. Many
providers felt this led to expensive, repetitive, and time-consuming tender processes.
The PSR does two main things:
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It removes health care service procurements (when arranged by relevant authorities)
from the standard UK public contract rules in the PCR.
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It replaces the 2013 NHS regulations with a new approach focused on outcomes,
quality, and integration rather than simply the lowest price or a mandated tender.
Key Differences from Standard Public Procurement
If you are used to standard public sector procurement, where the PCR or other
sector-specific regulations still apply (like for local government cleaning contracts
or general goods and services), you’ll notice a few changes with the PSR:
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Multiple Ways to Award
Under the PSR, relevant authorities can use one of five approaches to award
contracts: three direct award processes (A, B, C), a “most suitable provider”
process, or a competitive process. Which route they choose depends on factors
like whether the existing provider is the only viable supplier or whether
services are changing significantly.
-
Focus on Key Criteria Beyond Price
The PSR highlights five mandatory “key criteria”—Quality and Innovation,
Value, Integration and Sustainability,
Improving Access/Reducing Inequalities, and Social Value.
Authorities must consider these criteria for most awards (except the narrow
direct award processes A or B). That means they look at much more than just
cost or statutory compliance.
-
No Automatic Competition
In some scenarios under the PSR—such as when the existing provider is performing
well and the new contract doesn’t change much—commissioners may renew the contract
via a direct award (Process C) without running a competition. This can be surprising
for suppliers used to open tenders. On the other hand, if the awarding authority
wants a framework agreement or expects multiple capable providers, they will still
run a competition.
-
Standstill Period Still Matters
Even though health care is coming out of the PCR, there is still a standstill period
for most awards (particularly direct award C, most suitable provider, or competitive).
This gives suppliers time to challenge or question the decision. However, timelines
and details differ from standard public procurement, so check the exact requirements
when responding to a potential PSR award.
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Greater Emphasis on Collaboration and Continuity
Whereas standard procurement might prioritise a fair price through competition,
the PSR encourages integrated, collaborative relationships among NHS bodies and
other providers. This means award decisions might be based strongly on whether
a particular provider can offer consistent patient care that ties in with the
region’s overall healthcare plans.
Implications for Suppliers
If you’re used to bidding on public sector opportunities (for example, for local
government contracts under the PCR), or if your current public sector healthcare
contracts used to be tendered under the older regulations, here’s what to keep in mind:
-
More Relationship-Building
Because integration and collaboration are big priorities, it’s not only about
submitting the best bid during a formal tender. Engaging in ongoing dialogue
with NHS commissioners and demonstrating how your solution fits the local
system can be a powerful differentiator.
-
No Single “Lowest Price Wins”
Value is still one of the five key criteria, but it’s balanced against quality,
reducing health inequalities, innovation, social value, and the ability to
sustain integrated services. If you have historically competed primarily on
cost, you may need to broaden your strategy to score well on these wider measures.
-
Potential for Direct Awards
Certain direct awards (Process A or B) require no competition at all if the
service can only be provided by one supplier or if there’s no need to limit
providers (like an open-choice scenario for patients). If you’re an incumbent
supplier performing well, you might see your contract extended without a
formal retender—great for stability, but it also means you’ll want to maintain
excellent relationships and evidence-based performance.
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Transparency Rules Still Apply
Although less formal than a typical PCR tender, the relevant authority must
publish intention and confirmation notices for most new or renewed contracts.
There is also a standstill period in many cases and a chance for you to challenge
decisions if you believe the awarding authority breached the rules.
Tips to Succeed Under PSR
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Maintain Ongoing Dialogue with commissioners to understand local
healthcare priorities.
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Highlight Integration by showing how your solution dovetails with
local services, meets rigorous quality standards, and delivers social value.
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Track Notices for standstill periods. Even if you see a direct
award notice, you may still have time to submit representations or raise concerns.
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Document Your Strengths in areas like innovation, equality, and
sustainability, as commissioners must weigh these heavily.
- Set Up Alerts for tenders and buyers to stay fully informed about healthcare procurement activity and ensure you never miss a relevant opportunity.
The Tenderlake Compliance Checklist
Below is a concise checklist of what awarding authorities must do under the PSR.
Familiarise yourself with it, because it can help you spot any potential non-compliance
if you want to challenge or question a procurement decision. (See the full checklist
appended at the end of this post.)
The checklist covers everything from choosing the right provider selection process
to publishing notices, managing conflicts of interest, and respecting the standstill
period. By understanding these steps, you’ll better anticipate how commissioners
should handle awards and where you might have scope to intervene or raise a clarification.
In short, the PSR offers a more flexible and collaboration-friendly approach to
commissioning health care services in England. If you’re a supplier coming from other
public sector markets, expect less emphasis on one-size-fits-all procurement steps.
Expect deeper scrutiny of how you support integrated care pathways, address health
inequalities, and contribute broader social value.
Stay informed, keep your service offerings aligned with local system needs, and pay
attention to the new award notices. By doing so, you’ll be in a strong position to
benefit from these changes and continue providing vital services that improve
healthcare outcomes.
Tenderlake PSR Compliance Checklist
Below is a condensed reference list of key “must-do” items extracted from the statutory
guidance, organised by topic.
A. Determining the Correct Provider Selection Process
- Must identify which provider selection process applies (Direct Award A, B, or C; Most Suitable Provider; or Competitive).
-
For direct award processes (A/B/C): Check conditions are met exactly as stated.
- Process A: Must be the only realistic provider due to the nature of services.
- Process B: Must offer contracts to all providers that meet requirements and allow patient choice without restricting the number of providers.
- Process C: Existing contract due to expire, proposed arrangement not changing considerably, existing provider is satisfying contract and likely will continue to do so.
- If none of A, B, C apply, must use Most Suitable Provider or Competitive process.
- If concluding a framework agreement, must use Competitive process.
B. Transparency Requirements
- For Direct Award A or B: Must publish a contract award notice within 30 days of award.
- For Direct Award C:
- Publish intention-to-award notice and observe standstill period.
- After standstill, publish confirmation of award notice within 30 days.
- For Most Suitable Provider Process:
- Publish intention to follow this process and wait at least 14 days.
- Publish intention-to-award notice, observe standstill period, then publish confirmation of award notice.
- For Competitive Process:
- Publish contract notice (invitation to tender).
- Notify unsuccessful providers in writing.
- Publish intention-to-award notice, observe standstill period, then publish confirmation of award notice.
- All notices must include required details (contract title, provider name, CPV codes, decision-maker info, conflicts of interest handling, contract value/dates, rationale with reference to key criteria).
C. Standstill Period (for Direct Award C, Most Suitable Provider, and Competitive Process)
- After publishing intention-to-award, must observe at least 8 working days standstill.
- If representations are received, must consider them and respond before awarding.
- Must allow at least 5 working days after the final decision before awarding the contract.
- If Independent Patient Choice and Procurement Panel involvement occurs, standstill continues until advice considered and final decision made.
D. Conflicts of Interest
- Must manage and declare conflicts of interest in decision-making.
- Must record how conflicts were handled and publish summary alongside award confirmation.
E. Application of Key Criteria (for Direct Award C, Most Suitable Provider, Competitive)
- Must consider Quality & Innovation, Value, Integration & Sustainability, Improving Access & Reducing Inequalities, and Social Value.
- Must record relative importance and how these criteria were applied in making the decision.
F. Record-Keeping
- Must keep a record of the decision-making process, criteria weighting, conflicts of interest, key evidence, reasons for decision, and how transparency requirements were met.
G. Contract Modifications
- Must ensure modifications are permitted under the regime.
- If modification meets certain thresholds or is attributable to the authority’s decision and value changes exceed triggers, must publish a modification notice.
H. Urgent Awards or Modifications
- May only award or modify urgently if delay would risk patient/public safety and could not have been foreseen by the authority.
- Must publish an urgent award/modification notice within 30 days.
I. Annual Summary & Monitoring
- Must publish an annual summary of PSR decisions and compliance monitoring results.
Use this checklist to verify if the given notice and process followed meet these must-do items.
If any required step or notice is missing, if standstill periods are not observed, or if the key
criteria are not considered and recorded, then there is non-compliance.
You can read the official statutory guidance on the NHS website here.
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