Freight Transport Association

Multimodal 2019

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DHSC awards £730m NHS logistics contract following High Court victory

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A £730m contract for transporting medical equipment to NHS trusts has been awarded by the Department of Health and Social Care, after the government saw off a legal challenge from a losing bidder.

Unipart will take over responsibility for the NHS logistics service from DHL Supply Chain next year as part of changes to the NHS procurement model.

The five year logistics contract was due to be awarded in January this year, but the process was held up – partly due to a ministerial reshuffle.

In June, the DHSC told bidders Unipart was its preferred choice, but incumbent providers DHL Supply Chain challenged the decision.

However, last month a High Court judge ruled in favour of DHSC, which had warned further delays to the awarding of the contract would jeopardise the success of the new procurement model.

The DHSC wants the NHS to save up to £2.4bn by 2023-24, through annual savings of £600m which are delivered through the model. The programme was cited by Lord Carter in his review of NHS efficiency.

The current national purchasing service – the NHS Supply Chain – is currently run by DHL Supply Chain.

But the new supply chain will comprise other companies, as well as DHL Supply Chain, buying supplies for the NHS.

The DHSC hopes this will increase trusts’ spending through the NHS Supply Chain from 40 per cent to 80 per cent of £5.7bn worth of annual expenditure on common goods and equipment.

Trusts will not be mandated to use the new NHS Supply Chain service, but – as reported by HSJ last month – they will have millions of pounds withheld in funding. This money will instead be spent on the model’s operating costs – thereby incentivising trusts to use the model.

Health minister Steve Barclay said:

“A modern health service shouldn’t involve 234 separate trusts spending time and money negotiating different contracts and prices for the same thing.

“That’s why our work to centralise how the NHS buys goods and services is crucial.”

The new model will fully come into effect in April 2019, six months later than originally planned.

The NHS spends around £30bn a year on non-pay costs.

Source: HSJ

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