A health system broke procurement rules when it awarded a patient transport contract to a firm that went bust less than a month after it began providing the service, according to a legal claim brought in the High Court, writes HSJ.
Bristol, North Somerset and South Gloucestershire Integrated Care Board failed to adequately assess the financial sustainability of its chosen supplier, SVL Healthcare Services, according to another patient transport supplier, ERS Transition.
The company began delivering the service on 1 August this year, but went into insolvency 26 days later.
ERS also said the ICB breached procurement rules because it was biased against the company and did not want to contract with it.
It said it should be awarded the contract to provide the service following SVL’s collapse, as it came second in the original procurement. However, BNSSG has awarded an interim contract to a local trust. ERS said this was unlawful.
ERS’s claim was filed with the court on 2 October and BNSSG has not yet lodged its defence.
The ICB first awarded the five-year, £36.7m contract to SVL — known as Savoy Ventures at the time — in July 2023. This contract award is subject of another, ongoing, legal challenge by ERS Transition, brought shortly after the contract award was announced.
That first legal challenge said the ICB broke procurement rules in how it scored the bids in its evaluation, and “failed to apply the published selection criteria to the preferred bidder’s response.” The ICB denied this.
A procurement process being challenged in court is normally paused while the case progresses, but in this instance the judge allowed the ICB to continue with the contract award to its favoured supplier while the court heard the case.
SVL finally began providing the contracted patient transport service on 1 August but was insolvent on 27 August. The supplier gave its NHS commissioners six hours’ notice it was stopping services, HSJ revealed earlier this month.
The company said BNSSG told it in pre-action correspondence that the insolvency was “unexpected”. However, ERS asserted in its claim that SVL was “evidently subject to grave (in the event fatal) financial risk and/or inadequacy substantially in advance of 27 August”.
ERS also believed that as the second-place bidder, behind SVL, it should now be awarded the contract. Its chief executive, Craig Smith, wrote to the ICB on 28 August to say the firm was ready to step in at short notice.
Addressing the ongoing litigation from 2023, Mr Smith said: “Part of our responsibilities within this process is to seek to mitigate any impact to the business and I would see any discussions supporting, if not entirely, meeting this requirement.”
However, on 1 October, BNSSG announced it had used new procurement rules to make an urgent direct contract award to a local trust, University Hospitals Bristol and Weston FT, to provide an interim service for just under £8m over 18 months.
ERS said this award was unlawful because the ICB made the decisions based on “irrelevant and/or impermissible considerations” including “bias against the claimant” and “the desire to avoid contracting with the claimant”.
The company also said it broke procurement rules because the ICB is paying the trust at a higher rate than it was asking, the length of the contract was disproportionate or excessive, the circumstance that made an urgent award necessary were the responsibility of the ICB and should have been foreseen, and the decision was influenced by bias against ERS and “the desire to avoid contracting” with it.
ERS declined to comment further for this story. HSJ has also approached the ICB and the Kroll Advisory, which has been appointed as SVL’s administrators.
Source: HSJ
Date: 22 October