The Department of Health has advertised ten new national contracts for the provision of procurement services.
Worth collectively in excess of £190 million, the contracts are being attended as part of a large-scale transformation of services provided by DHL through NHS Supply Chain.
As opposed to utilising a single contract, the services have instead been separated into 11 category towers, with one lots already awarded to Crown Commercial Service.
The current contract ends in October 2018.
Both NHS procurement hubs and private companies will now compete to be awarded the outstanding contracts.
The Health Care Supply Association has already raised concerns over this plan, believing that it could lead to fragmentation of the procurement system.
Additionally, the organisation is unconvinced that an ethos focused on competition rather than collaboration is advisable.
Nonetheless, its chair Helen Lisle, was cautiously optimistic about the prospects of this new arrangement.
“Since August, the HCSA and NHS procurement profession has benefited from a greater level of communication and open dialogue with the DH around the future operating model and the procurement processes being followed. We’ve had an opportunity to ask questions and have received appropriate answers. There have been a number of working groups/discussion forums formed to ensure the communication links continue, which has been of great benefit to date.”
Some procurement professionals have suggested that dividing and outsourcing services could result in the level of expertise being reduced, which would obviously be negative.
Contracts will run for 36 months initially, and may be extended for a further two years, depending on the success of the process.
Any individual bidder will only be able to procure a maximum of three contracts.
The Department of Health has already emphasised the necessity of updating the existing operating model.
And a spokesman suggested that the new process would result in superior outcomes.
“Through competition, the new model will increase procurement expertise, which will create more savings across the NHS.”
The current DHL contract includes some delivery services which are outside the scope of the new contracts, which makes cost comparisons problematic.