Framework abuse leads first Contract Shortening Order

Three Clinical Commissioning Groups (CCGs) have each been fined and the UK’s first Contract Shortening Order issued after a High Court judge found that they had manipulated a framework call-off process to ensure that a major NHS contract was awarded to their pre-selected preferred bidder.

The case has, in its origins, a decision made by the incumbent Health Secretary in 2019 to ban the continuing use of pagers, colloquially known as ‘bleeps’ or ‘bleepers’, within the National Health Service in favour of more modern electronic communication technologies.

As CCGs across England examined their supply chains to respond to the Health Secretary’s edict, CCG leaders at the three bodies in Bristol, Gloucestershire and Bath, North East Somerset, Swindon and Wiltshire decided to run a joint procurement process.

In Mr Justice Kerr’s 350-paragraph judgement found that the process “began to tilt” in favour of Cinapsis, an incumbent supplier to Gloucestershire and Bath CCG, from early November 2020, when an alternative supplier, Consultant Connect (CC) were asked to present to the CCGs against a specification which the judge found as having been ‘tailored tailored to those of the competitor [Cinapsis]’.

CC was also unaware it was being marked by the Bath and Swindon CCG in that meeting, and did not know what the criteria was or the marking scheme.

The judge found the Cinapsis was picked by a “covertly competitive process”, then using an NHS framework “without genuine competition” and that a breach of regulations 18(2) and (3) (artificially narrowing competition and/or the intention of unduly favouring or disadvantaging certain economic operators) of the Procurement Regulations had occurred.

The framework call-off itself also represented a breach of regulation 33(11) as the pricing terms of the original framework were “substantially departed from”.

The Court also ruled that two members of the evaluation panel unresolved conflicts of interest in the outcome of the procurement process, but accepted that there was no question of corruption and both men wanted the best for the local NHS.

CC’s request for a declaration of ineffectiveness, to invalidate the contract awarded to Cinapsis, was declined by Mr Justice Kerr on the grounds of the potential negative impact upon clinical care.

Instead, Mr Justice Kerr shortened the contract by 14 months, meaning it will now end in January 2023, representing the first instance that a Contract Shortening Order has been handed down for a breach of procurement regulations.

Gloucestershire CCG was fined £10,000, whilst Bristol CCG was told to pay £4,000.

Bath, North East Somerset, Swindon and Wiltshire CCG were each also given a £8,000 civil penalty.

They must also pay civil damages to CC.

You can read the judgement here (Neutral Citation Number: [2022] EWHC 2037 (TCC))