Health service procurement: draft statutory guidance - Section 4: key criteria

Relevant authorities must consider five key criteria when making procurement decisions under direct award process 2, the most suitable provider process, and the competitive process of the regime. Annex D of this guidance provides detail on what each criterion covers. In summary, these criteria are:

• quality, that is the need to ensure good quality services
• value, that is the need to strive to achieve good value in terms of the balance of costs, overall benefits, and the financial implications of a proposed contracting arrangement
• collaboration and service sustainability, that is the extent to which services can be provided in:
  • a collaborative way
  • a sustainable way (which includes the stability of good quality health services or service continuity of health services)
  • in a way that improves health outcomes
• improving access and reducing health inequalities, that is ensuring accessibility to services and treatments for all eligible patients and improving health inequalities
• social responsibility, that is whether what is proposed might improve economic, social, environmental, and cultural well-being in the geographical area relevant to a proposed contracting arrangement

Relevant authorities must consider each of the key criteria in the regime when making decisions under direct award process 2, the most suitable provider process and the competitive process (including when concluding a framework agreement and when awarding a contract based on a framework agreement using the competitive process). Relevant authorities must be able to justify their decisions when following these procurement processes in relation to the key criteria and keep a record of this. Further detail on recording procurement processes and transparency can be found in the transparency section.

How relevant authorities assess providers against the key criteria, including what evidence they consider, may vary according to the service they want to procure. A relevant authority may wish to address specific priorities; these priorities are expected to be described as part of the key criteria and can be considered when deciding the relative importance of the key criteria.

Relevant authorities must be aware that equalities duties in the Equality Act 2010, including the public sector equality duty, are relevant to all criteria and due regard to these requirements must be given when considering each criterion.

The relative importance of the key criteria is not predetermined by the regulations or this guidance and there is no prescribed hierarchy or weighting for each criterion. Relevant authorities must decide the relative importance of the key criteria for each decision they make under this regime, based on the proposed contracting arrangements and what they are seeking to achieve from them/the services, including scenarios where a particular criterion is "pass/fail", or where certain key criteria are of equal importance. All criteria must be considered, and none is expected to be discounted when following a procurement process.

The regime does not specify how relevant authorities must balance the key criteria; however, relevant authorities are expected to be aware of wider requirements or duties when considering procurement decisions. For example, CCs, CBCs, LHBs, NHS trusts and SHAs are expected to adhere to the Welsh Government’s net zero ambitions and carbon budget, the social partnership and Public Procurement Act 2023, the Wales procurement policy statement, "a healthier Wales", and the need to ensure value for money when arranging health services (this list is not exhaustive). The flexibilities offered by the regime does not mean that relevant authorities are exempt from complying with their other obligations.

Relevant authorities are advised to consider particularly carefully the relative importance of the value criterion when making assessments under the most suitable provider process.

It is advised that for procurement processes with higher contract values, greater focus is given to value for money and the quality and efficiency of the services to be provided, unless this means the service does not best meet the needs of the population it is serving.

When making assessments against the key criteria under direct award process 2 and the most suitable provider process, relevant authorities are expected to use information and evidence from a range of sources, as well as their knowledge and experience of working with providers. They can ask providers for further information to assist with this assessment if they wish. The explanation of each criterion in annex D includes examples of relevant sources where appropriate.

When following the competitive process relevant authorities must only use the information contained in the bid to assess the bid, except when applying regulation 21 and 22 exclusions. Relevant authorities may set out in their tender documents that wilful misrepresentation of a bid by a provider will result in exclusion from the procurement process.

Relevant authorities must justify and record how they have given relative importance to each of the key criteria for the service they are arranging. Further detail on recording the procurement process can be found in the transparency section.

Relevant authorities must ensure they meet other relevant statutory duties when deciding the relative importance of each of the criteria, including normal public law procurement principles around reasonableness of decisions. Relevant authorities are also expected to consider other national and local policies and non-statutory guidance when deciding the relative importance of each of the criteria.

Further details on how relevant authorities are expected to use the key criteria can be found in annex D.