Exclusive – Department of Health Issues PIN, Kicks-Off NHS Supply Chain Contracting Process

We reported here that the UK’ s Department of Health had decided not to extend DHL’s contract for operating NHS Supply Chain, which provides procurement, logistics and management services across a wide range of goods (and some services) provided the National Health Service organisations.

The Department, through the NHS Business Services Authority (contract managers for the DHL contract) has now issued a “Prior Information Notice” in the EU official journal, announcing the start of a process to decide on a solution or solutions to replace the current arrangement. Here is a summary of the key points from the PIN:

“A programme of work has been established to deliver the requirements of the national strategy. Included in this programme is all activity in the scope of the current contract between NHS Business Services Authority (NHSBSA) and DHL (trading as ‘NHS Supply Chain') ... The expiry date of the current contract is 30.9.2016. The current contract covers medical consumables, non-medical consumables (including food) and medical and capital equipment for NHS trusts. The current annual turnover of the contract is in excess of GBP 2bn per annum...

The contracting authority is now seeking expressions of interest in writing from the market place in response to this PIN to help inform the strategy to best meet the future procurement and supply chain needs of the NHS in England following the expiry of the current contract.

The contracting authority may choose to hold supplier sessions. If the contracting authority decides to hold supplier sessions they are most likely to be held in late February / early March. The intention is that the solution(s) will provide procurement and supply chain services (including logistics) from factory gate to point of use for the supply of goods and services to the NHS in England (and also to some organisations in Wales, Scotland and NI). This is intended to include all activity currently undertaken by ‘NHS Supply Chain'.

The services could include, but are not limited to:
— Sourcing and procurement of products in defined category areas (including global sourcing);
— Solutions (including the procurement and supply) to meet capital medical equipment requirements;
— End to end supply chain and logistics operations;
— In hospital supply chain from point of receipt to point of use;
— Shared services (including purchase to pay and related transaction services);
— Inventory management (including in hospital);
— Engagement (including clinical).to support core range and other policy initiatives (future).

Any final contract(s) may feature multiple lots. Contract(s) duration is still to be determined but the current proposal is that the initial contract duration is expected to be up to 10 years”.


So this is designed to start a process of market consultation and engagement with possible suppliers. The potential scope here appears to go well beyond the current NHSSC contract, worth over £2 billion a year, but we will have to see what eventually comes out of the discussion s of course in terms of real live contracts. But there is plenty of opportunity. The NHS spend over £23 billion annually on goods and services, so clearly the size of the contract(s) arising from this could be very significant – if you’re in this business, we suggest you drop Rob Knott an email at nhs.procurement@nhs.net

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