If your organisation delivers clinical or healthcare services to the NHS, the rules governing how you win and retain that work changed fundamentally on 1 January 2024. The Provider Selection Regime (commonly referred to as the PSR) replaced the previous procurement framework for healthcare services in England. It introduced new processes, new criteria, and a new philosophy: less competitive tendering by default, more flexibility, and a stronger emphasis on outcomes and collaboration.
For suppliers currently on NHS frameworks, or looking to get onto them, understanding the PSR is not optional. It shapes how NHS buyers make decisions, which route they use to award contracts, and what evidence they need from you to justify their choice.
What is the Provider Selection Regime?
The PSR is the procurement regime that governs how NHS bodies in England commission healthcare services. It was introduced under the Health and Care Act 2022 and came into force on 1 January 2024, replacing the National Health Service (Procurement, Patient Choice and Competition) Regulations 2013 and removing healthcare services from the scope of the Public Contracts Regulations 2015.
It applies to a defined set of relevant authorities:
- NHS England
- integrated care boards
- NHS trusts and foundation trusts
- local authorities
- combined authorities
When any of these bodies is commissioning in-scope healthcare services, the PSR is the regime they must follow.
An important distinction: the PSR does not apply to the procurement of goods or non-healthcare services. The PSR does not govern your procurement if you supply:
- medical equipment
- medicines
- IT systems
- estates services
- professional services such as management consultancy
These procurements fall under the Procurement Act 2023 for procurements commencing on or after 24 February 2025. For contracts starting before that date, the earlier Public Contracts Regulations applies. The PSR is specifically about the commissioning of healthcare services delivered to patients or groups of patients. This covers hospital services, community health services, mental health services, and similar.
If you are not certain whether your service falls within scope, the NHS CPV code list in Annex A of the PSR statutory guidance provides the definitive reference.
The five PSR processes: what buyers can use and when
At the heart of the PSR is a set of five processes that relevant authorities must choose between when commissioning in-scope services. The process a buyer selects determines how much competition is involved, how quickly a contract can be awarded, and how you as a supplier can best position yourself.
Direct Award Processes A, B and C
Direct Award Process A applies where the service can only reasonably be provided by one specific organisation. In practice, this is a narrow category. Here, the relevant authority must agree that no realistic alternative exists.
Direct Award Process B applies where patients have a choice of provider, with no restriction on the number of providers by the relevant authority.
Direct Award Process C is the process most suppliers will encounter most often. It can be used where an existing provider is satisfying its contract and the new contract will not be materially different from the current one. This is the route that allows NHS buyers to continue working with trusted providers without going to full competition, provided the evidence supports it.
Most Suitable Provider
The Most Suitable Provider process sits between a direct award and a full competition. It can be used where the relevant authority cannot or does not wish to use Direct Award Process C, but believes it can identify the most suitable provider through an informed assessment of the market rather than a full open competition.
The April 2025 update to the statutory guidance clarified how this process differs from the competitive route. Essentially, relevant authorities must develop and maintain sufficiently detailed knowledge of the provider landscape before relying on this process. This places greater emphasis on market engagement as a precursor to using it.
Competitive Process
The Competitive Process is the full open competition route, used when a buyer cannot or does not wish to use a direct award or the most suitable provider process. This is the route most analogous to a traditional tender, and the one that directly involves framework-based further competitions for healthcare services.
A direct award under a framework is not the same thing as Direct Award Process A, B or C under the PSR. Where a contract is awarded from a framework, the relevant authority must follow the framework terms. Depending on those terms, this may allow award without further competition, or it may require a mini-competition using the PSR competitive process with the market-advertising step replaced by an invitation to framework providers.
The five key criteria for suppliers
Whether a buyer is following Direct Award Process C, the Most Suitable Provider process, or the Competitive Process, they are required to assess providers against five key criteria. The key criteria under the PSR are: quality and innovation; value; integration, collaboration and service sustainability; improving access, reducing health inequalities and facilitating choice; and social value.
These five criteria are not just an evaluation framework for buyers. They are the lens through which you need to present your service, your evidence, and your value proposition. This applies whether you are submitting a framework application, responding to a further competition, or positioning yourself for a direct award under Process C.
What does each criterion mean in practice for a supplier?
Quality and innovation
This goes beyond clinical safety and regulatory compliance. Buyers want to see evidence of outcomes, patient experience, and how your service drives continuous improvement or brings new thinking to the delivery model. Generic statements about commitment to quality will not move the dial. Named outcomes from comparable contracts will.
Value
Value is not simply about price. It encompasses cost-effectiveness over the life of the contract, efficient use of public funds, and the demonstrable benefit delivered relative to investment. This is one area where total cost of ownership arguments, showing long-term value rather than lowest upfront cost, can be a genuine differentiator.
Integration, collaboration and service sustainability
This criterion reflects the NHS’s drive towards joined-up care pathways, system-level working, and stable long-term partnerships. If your service model involves working alongside NHS staff, other providers, or community organisations, that collaborative approach should be front and centre in how you describe your delivery.
Improving access, reducing health inequalities and facilitating choice
Here, you must discuss how your service reaches underserved populations, reduces waiting times, and gives patients meaningful options. Evidence of delivery to diverse communities, flexible service models, and outcomes data disaggregated by demographic group all support a strong response here.
Social value
Within the PSR context, social value is a mandatory key criterion, not an optional add-on. Every evaluation under the PSR must consider it. We have covered social value in greater detail in our post on NHS sustainability in framework bids.
Our healthcare tendering expertise enables us to translate these criteria into compelling, scored responses. It also means knowing which of the five deserves the most emphasis in a given procurement context.
What the PSR means for existing framework agreements
One of the questions suppliers ask most frequently is what happens to NHS frameworks that were already in place before the PSR came into force. The answer is clear: framework agreements established before 1 January 2024 remain a compliant and reliable route to market under the PSR, covered by the transitional arrangements within the statutory guidance.
For frameworks established and procured under the PSR itself a competitive process must be used to award a framework agreement. That means open competition for framework places remains the standard, even within the PSR’s generally more flexible approach to individual contract awards. This will become increasingly common as pre-2024 frameworks expire and are retendered.
The NHS SBS Insourcing of Clinical Services framework is a useful example here. Procured under the Public Contracts Regulations 2015, it remains valid under PSR transitional arrangements. PSR rules, however, will apply for new iterations of similar frameworks. For suppliers, this means the application process and evaluation criteria for new frameworks will increasingly reflect the PSR’s five key criteria rather than the older PCR evaluation structure. That is a meaningful shift in how you must write and evidence framework applications.
Understanding which legislative regime governs any given framework, and therefore how to align your application to the right criteria, is a core part of effective bid planning and strategy.
How Direct Award Process C affects incumbent suppliers
For healthcare service providers already delivering NHS contracts, Direct Award Process C is the PSR provision with the most immediate practical significance. It allows an NHS buyer to award a new or renewed contract to an existing provider, without competition, where the service is performing well and the new contract is not materially different from the current one.
That sounds straightforward, but there is a discipline that incumbents need to maintain to make use of it. NHS buyers using Process C must assess the provider against the five key criteria and keep records of that assessment. If you are an existing provider, the evidence that supports a direct award already needs to exist before your contract renewal is in view. That means collecting performance data, patient outcomes, and case study evidence throughout the contract period, not scrambling for it at the point of renewal.
Relevant authorities must develop and maintain sufficiently detailed knowledge of the provider landscape. As a supplier, you should be actively supporting that knowledge, providing regular performance reporting, engaging proactively with contract managers, and flagging innovations or improvements you have delivered. The organisations that are easiest to award a direct contract to under Process C are those that have made themselves easy to evaluate positively throughout the life of the contract.
If you are new to the NHS market and looking to displace an incumbent, understanding that Process C exists, and that buyers may legitimately use it, is important context. It means early relationship-building, market engagement participation, and a visible presence in the right procurement networks are not just nice-to-haves. They are the things that put you in the conversation when a buyer is considering whether Process C is appropriate or whether they need to look more widely.
Common questions about the PSR
Does the PSR apply to my service if I am bidding for a place on an NHS framework?
If the framework is for in-scope healthcare services and is being established by a relevant authority, the PSR applies. A relevant authority must use the PSR competitive process to conclude the framework agreement. At call-off stage, the buyer must then follow the framework’s own terms, which may allow award without further competition or require a mini-competition. If the framework is for goods, works, non-healthcare services, or out-of-scope services, the Procurement Act 2023 is likely to apply instead.
Can NHS buyers always use Direct Award Process C to avoid competition?
No. Process C is only available where an existing provider is satisfying its contract and the new arrangement is not materially different from the current one. Significant service changes, new geographies, substantially different volumes, or a new service altogether will not meet the threshold. Buyers also need to evidence their assessment against the five key criteria to use this route. It is not a rubber stamp.
What can I do if I believe a direct award was not properly made?
If you believe the process has not been followed correctly, you may be able to make representations during the standstill period. Where the relevant authority’s response does not resolve the issue, the Independent Patient Choice and Procurement Panel may provide independent expert advice as part of the review process.
Is the PSR relevant in Scotland, Wales, or Northern Ireland?
No. The PSR applies only in England, as healthcare procurement is a devolved matter. The pre-existing procurement regime remains in place in Scotland. Suppliers operating across UK nations need to understand that different procurement rules apply depending on where the NHS buyer is located.
Preparing your bid for the PSR landscape
The PSR has changed not just the processes NHS buyers follow, but the way they think about provider selection. The emphasis on collaboration, integration, and long-term outcomes means that the most competitive bids are those that speak the same language, demonstrating not just what you deliver, but how you work within NHS systems, how you contribute to wider health goals, and what your track record of performance shows.
Strong responses under PSR criteria require the same discipline as any well-evidenced bid: specific outcomes, named evidence, structured methodology, and a service description that maps cleanly onto what the buyer has said they need. Our bid writing and management service focuses on exactly this: taking your clinical and commercial expertise and translating it into responses that score.
Whether you are applying for a new NHS framework, competing in a further competition, or positioning yourself for a direct award renewal, Bidding can help you build the evidence base and the responses that make the difference.
Talk to our team to discuss your PSR bid strategy and how to position your service for the NHS procurement landscape.
