Equitable Access in Primary Medical Care
Dental Access Programme
Conflicts of Interest Guidance for PCTs
1. Purpose
To ensure a fair, transparent and competitive procurement process, PCTs should actively work to identify and manage all Conflict(s) of Interest (CI) during the procurement process. This paper provides PCTs with guidance on identifying and managing CI for the Dental Access Programme (DAP) procurements and covers:
§ Definition: What a CI is;
§ Governance: Arrangements for identifying and managing CI;
§ Risks associated with CI during the procurement process: The key phases of the procurement process where CI are most likely to arise and the risks associated with each stage; and
§ Reviewing and Managing CI: A framework for reviewing and managing CI.
PCTs are responsible for managing their own CIs as well as their own local procurements - this paper presents best practice guidance only. The content of this guidance should not negate the need for compliance with any other CI guidance or declarations that PCTs have in place, or those, which members of professional bodies have under their own rules.
2. Definition: What are CI?
CI arise when an individual or organisation is in a position to exploit a professional or official capacity, including acquiring information or being involved in processes connected with the procurements, for their personal or business benefit.
The existence of CI does not, in itself, indicate that a person or organisation has acted in an unprofessional manner or breached any regulations. In some situations CI are unavoidable (for example with primary care service delivery there is a strong commissioner/provider link), however, PCTs should work to ensure all CI are identified and managed appropriately.
In the event, that a potential CI cannot be managed, PCTs should review any risks of negative stakeholder perception that a CI is not being managed and take this into consideration when determining management actions.
CI could include any relationship or interest, of a PCT officer, that might give rise to legitimate concern on the part of any bidder. To assist with understanding CI, and for the purpose of this paper, they have been categorised as follows:
§ CI from a PCT perspective;
§ CI from a bidder perspective;
§ CI arising from PCT Provider Arm bids; and
§ CI arising from vertical integration or inappropriate referrals
2.1 PCT perspective
From a PCT perspective any of the following scenarios could be considered to be a potential CI:
· A PCT officer involved in the procurement (e.g. project team or evaluator) has a financial interest (e.g. holding shares or options) in a bidder/bidder entity or any employee or officer thereof;
· A PCT officer has a financial or any other personal interest in the outcome of the evaluation process;
· A PCT officer is employed by or providing services to any bidder party;
· A PCT officer is receiving any kind of monetary or non-monetary payment or incentive (including hospitality) from any bidder party or its representatives;
· A PCT officer has any other close relationship (current or historical) with any Bidder Party;
· Where any party (PCT or Bidder) is canvassing, or negotiating with, any person with a view to entering into any of the arrangements outlined above; or
· Where any party (PCT or Bidder) has a close member of family (including unmarried partners) who falls into any of the categories outlined above.
For the purpose of this guidance, a PCT Officer includes any member of staff directly employed by the PCT, contracted in specifically for the procurement or on an advisory basis, including PCT Dental Advisors. In some cases, where there is involvement by Local Dental Committee members in PCT meetings or the decision making process for the procurement, the above criteria for CI may also be applicable.
2.2 Bidder perspective
From a Bidder perspective any of the following scenarios could be considered to be a potential CI:
· A Relevant Organisation is carrying out, or has carried out, any work for the PCT in the last [12 months] (this would cause a concern, for example, if the Relevant Organisation has had access to commercially sensitive information which would give them an unfair advantage over other bidders). This criteria may be extended to request bidders to declare any work that they have carried out for other PCTs, directly in relation to the DAP procurements;
· A Relevant Organisation is potentially providing services for more than one prospective Bidder in respect of the PCT Procurement process; or
· A Relevant Organisation employs or engages, or has employed or engaged, any person currently or formerly employed or engaged by or otherwise connected with PCT.
For the purpose of this paper, a Relevant Organisation is considered to include any organisation(s) - including the Bidder, each Bidder Member and any Clinical Services Supplier/Performer - or person connected (including employees and advisers) with a response to a Pre-Qualification Questionnaire.
The above list of examples for both PCT and Bidder categories is a non-exhaustive list, and it is the PCTs’ responsibility, as the Procuring Authority, to ensure that any-and-all potential conflicts – whether or not of the type listed above – are disclosed in writing and managed appropriately.
2.3 PCT Provider Arm Bids:
For the DAP procurements, it is possible that PCT Providers Arms may bid for services. PCTs are responsible for monitoring the exchange of information prior to and throughout the tender process to ensure that the Provider Arm is not unfairly advantaged and there is clear separation of key personnel within the relevant PCT.
The particular areas which need to be addressed in this regard are:
Information exchange:
The PCT should ensure, in so far as possible, that the Provider Arm does not receive or have access to any information either before or during the tender process which would place it at an advantage over its competitors.
Transparency:
The PCT should include within documentation how issue of potential conflicts of interest will be addressed and evaluated.
In particular, bidders should be required (at PQQ stage) to disclose actual or potential conflicts of interest that may arise during the tender process. It would be helpful, in this regard, for the tender documentation to give examples of situations that the PCT would consider as giving rise to conflicts.
Chinese walls:
Creating and enforcing a “Chinese wall” has generally been accepted as a legitimate way of ensuring that conflicts of interest are avoided when dealing with a project. This should ensure that there is no leaking of information between the separate PCT teams.
2.4 Vertical Integration/onward referrals to a provider related party:
CI may also arise where vertical integration or onward referral to a provider related party could occur. The key areas of concern in this situation would be the protection of patient choice and supplier induced demand.
Where the risk of vertical integration/onward referral to a provider related party could occur, PCTs should work to ensure that the necessary safeguards are in place and that the commissioner has visibility over referrals (including contractual safeguards).
3. Governance
In order to ensure that all CI are identified and managed appropriately, robust governance arrangements should be put in place. There needs to be a process by which all stakeholders can declare CI and a review mechanism for PCTs to monitor and manage them. It is recommended that PCT officers are encouraged to contact a named individual within the PCT as a contact point for any clarification or declaration on CI – this person may be, for example, the Project Lead.
Ultimately, the PCT board should have overall responsibility and have oversight for managing all CI for the procurement process. As a core principle, it is essential that any decisions made around managing CI are made independently of those associated or directly involved in the CI itself.
A possible governance structure for dealing with CI is presented below:
Figure 1: Governance Structure for CI
3.1 Suggested Roles:
a. PCT Project Team:
Responsible for:
§ Identifying CI and making appropriate channels available for all stakeholders to declare CI.
§ Reviewing CI, risks associated with them and the impact that they have on the procurement - seeking necessary expert advice (e.g. legal) and involving SHA where required (e.g. Vertical Integration issues).
b - SHA
Responsible for:
§ Providing advice on specific CI where PCTs require assistance, especially where CI may be relevant to other PCTs or the region as a whole; and
§ Sharing best practice guidance and more specific information with PCT Project Teams – this will help achieve greater consistency or approach to handling and managing conflicts across the region.
c - PCT Lead / Responsible PCT Director
Responsible for:
§ Ensuring all CI are managed appropriately;
§ Making key decisions on any restrictions to be imposed;
§ Informing the PCT Board of specific cases and be accountable to the PCT Board (or as per existing PCT governance arrangements); and
§ Escalating decisions to the PCT Board, where it is deemed appropriate.
d - PCT Board
§ The PCT Board, as the Procuring Authority, should have oversight over all CI and are ultimately accountable for any decisions and action taken.
PCTs may also wish to consider having in place an independent review panel. An independent review panel could be used to review CI and bid evaluation processes to ensure that all stakeholders are treated fairly and that an open and transparent decision-making process is in place. Having an independent review panel would serve particularly well if, in the unlikely event, CI involve Board members. PCTs should be cognisant of potentially widening the impact or severity of a CI when involving the SHA or a review panel (e.g. by simply extending the number of people exposed to the CI).
3.2 Identifying conflicts
All parties involved in the procurement process should be required to declare any CI that they know may exist. The simplest way to do this is to ask bidders and PCT staff to declare all conflicts, as discussed further below.
PCTs are recommended to create and maintain a central CI log to include all identified CI and any minutes taken at meetings where CI are discussed. Capturing all CI in a central database will help ensure accountability and appropriate capture of information.
Bidder Obligations:
Bidders are obliged to declare CI as part of the tender process.
Potential Bidders are made aware of their obligation to formally declare any CI through DAP procurement documentation, namely the Memorandum of Information (MOI), Pre Qualification Questionnaire (PQQ) and Invitation to Tender (ITT). The first stage for bidders to formally declare any CI is at the Pre-Qualification Stage. In addition to formal requirements set out in the DAP procurement documentation, bidders should be placed under a continuous obligation to declare any CI that arise during all stages of the procurement process.
PCT Obligations:
PCTs must ensure that any-and-all potential conflicts, whether or not of the type listed earlier in this guidance, are disclosed and recorded. PCT Project Leads should ensure that all officers involved in the procurement process declare any CI and agree to strict confidentiality agreements as early as possible in the procurement process. This applies to all Project Team staff, advisors and evaluators.
A process of declaring CI should be set up at the beginning of the procurement project and all new staff that get involved in the project subsequent to the initial set up should be required to declare all CI before given access to commercially sensitive information. In addition, PCTs should adopt a process whereby all CI and mitigation actions are documented (e.g. recording minutes at meetings).
All PCT Officers should be made aware of the limitations to any future involvement in the procurement (e.g. as a bidder) because of their entry into the procurement process at the PCT.
Through a continuous process of identifying and monitoring CI, certain CI may become known to the PCT retrospectively.
4. CI Risk during the procurement process
CI can occur at any stage during the procurement process and are most likely to occur during the following three key phases:
1) Service Design
2) Evaluation of Bids (PQQ and ITT)
3) Bidder selection and contract award
The type of CI likely to arise during these phases and the risks associated with each of them are discussed further below:
4.1 Service Design
Two key areas of CI that can occur at this stage of the process are:
1. The service design may be influenced by an individual in such a way that the resulting requirements favour the deliverability of any one provider in which the individual had a personal or financial interest; and
2. An individual or organisation gains access to affordability and financial costing information which gives them a commercial advantage when bidding for services.
In both of these areas, bidders gain an unfair advantage over competitors and PCTs should take these into consideration when deciding upon mitigation actions. If a CI, as described above, has occurred, in order to ensure the integrity of the procurement, PCTs should seek to exclude such bidders from continuing in the procurement process. An assessment should be made on a case-by-case basis with consideration given to whether the conflicted parties made a declaration upfront – in which case appropriate management actions should already be in place.
4.2 Evaluation of Bids (PQQ and ITT)
All PCTs should ensure that the evaluation process is robust and that it follows an open, fair and transparent process. In addition, the evaluation criteria should be designed to be non-discriminatory to any particular type of bidder. Evaluation processes should be well documented in the PQQ and ITT Evaluation Plans. PCTs should ensure that all evaluators are free of any conflicts and all evaluators should complete a CI declaration prior to them receiving any bid material. A template CI Declaration letter is provided as Annex 1.
Evaluators must also be made aware that their involvement in the evaluation process may preclude them from participating (as bidders) in other PCT procurements.
As a general rule, PCTs should work to ensure that not only is the procurement fair, but also seen to be fair.