Procurement regulations

Understand the key procurement regulations affecting NHS organisations, including the Procurement Act 2023, the Provider Selection Regime and dynamic markets.

Procurement Act

The Procurement Act 2023 (PA23) officially came into force on 24 February 2025. Its aim is to overhaul UK public procurement, to simplify processes, improve transparency, make it easier for suppliers to navigate procurement processes and avoid unnecessary bureaucratic barriers to entry. Presently NHS LPP have put both legacy agreements into place during the previous procurement regime - Public Contracts Regulation 2015 (PCR2015) - and agreements that have been awarded under PA23. There are no restrictions on buyers using agreements from the previous regime, but they should bear in mind that any call off processes should comply with PCR2015 if using an agreement that was awarded under PCR2015.

Provider Selection Regime 

The Provider Selection Regime (PSR) came into force on 1 January 2024. This regime is a set of statutory rules governing the procurement of healthcare services by NHS bodies and local authorities in England. The PSR covers the procurement of healthcare services only and therefore should not be used for goods or non-clinical services. This legislation is designed to reduce the bureaucracy associated with competitive tendering and allows commissioners instead to make decisions on quality and safety of care, patient experience, value for money, collaboration, integration and continuity of services.

Under PSR, commissioners have five distinct routes to award a contract:

  1. Direct award process A: Used when there is limited or no reason to change from the existing provider, and they are the only provider that can deliver the services.
  2. Direct award process B: Used when patients have a legal choice of provider and the number of providers is not restricted.
  3. Direct award process C: Used when the existing provider is performing well, no significant concerns exist, and continuing with them aligns with system collaboration objectives.
  4. Most Suitable Provider Process: Used when a relevant authority wants to change the provider and knows exactly which provider is the most suitable without running a competitive tender.
  5. Competitive Process: Used when the authority needs to test the market or cannot identify a single, most suitable provider from the outset.

When does PSR apply?

PSR covers all new healthcare service contracts from 1 January 2024. This includes contracts that were awarded from existing framework or DPS agreements awarded under PCR2015 or PA23. If your healthcare service contract pre-dates 1 January 2024, there is no retrospective effect, but any further contract modifications made after 1 January 2024 must be carried out according to the contract modifications section of PSR. Healthcare service contracts can be procured using existing framework agreements or DPS that follow PCR15 or PA23, but contracting authorities should assure themselves that the awarding criteria takes account of the key PSR criteria, and the process they follow complies both with the agreement terms and conditions and PSR.

Dynamic Markets

Dynamic markets replace Dynamic Purchasing Systems (DPS) under the new PA23 regime. Contracting authorities can still enjoy many of the same benefits of DPS with the new agreement type, but with the added benefit of improved scope of goods and services which can purchased via dynamic market agreements.