HSCN procurement options

The N3 contract for wide area data network services in the NHS ended as planned on 31 March 2017.

For a fixed amount of time, NHS Digital has put in place an HSCN Transition Network which  retains elements of the legacy N3 infrastructure and provides service continuity for existing customers. However, organisations and services connected to this need to migrate to new HSCN connectivity as soon as possible.

In order to ensure the orderly close down of the HSCN Transition Network, organisations need to plan and execute their migration to HSCN connectivity and exit from the Transition Network as soon as possible. There are benefits to you in doing this;

1. HSCN services will be offered by multiple suppliers in competition with one another. This means that you'll be able to access a wider range of HSCN network service offerings at better prices. Find the latest list of HSCN compliant suppliers.
2. HSCN has enhanced security provisions that will help protect you from the cyber threats faced by the health and care sector.  
3. Finally, over the coming months, NHS Digital will start to decommission parts of the Transition Network that no longer represent value for money to the taxpayer and we want to ensure as far as possible, that your services are migrated at a time of your choosing rather than out of necessity as a result of the Transition Network being decommissioned.

You can obtain HSCN connectivity through a number of different routes and, in order to support your migration, NHS Digital needs to understand how you wish to proceed.  

This information is provided as general guidance; please contact your Regional Migration Manager to discuss your options in detail. If you decide to run your own collaborative procurement there are deadlines you need to meet, and if you want to join your regional aggregated procurement please refer to the timetable to make sure you know when it's happening.

Please consider the HSCN dynamic purchasing system (DPS) RM3825 the primary route to market for HSCN services. RM3825 has been specifically designed for procurement of HSCN services and so its scope and the associated terms and conditions are aligned to HSCN connectivity services. It is expected that all HSCN compliant suppliers will join the DPS. All NHS Digital managed aggregated procurements will be run on RM3825.

Whilst RM3825 is considered to be the primary route to market, you can also use the existing Crown Commercial Service Network Services 2 Framework RM3808 or use an Official Journal of the European Union (OJEU) procurement route.

The table below summarises your options. If you decide to run your own procurement you may have additional local options such as existing agreements which aren't shown here.

Deciding on a preferred approach

You need primarily to consider whether you have the knowledge, capability and resources for running your own procurement (either in collaboration with other organisations or on your own) or whether you would prefer NHS Digital to manage the procurement of HSCN connectivity on your behalf.

Your choice of purchasing route won't affect the HSCN connectivity services accessible to you or the level of funding devolved to NHS organisations.

If you're uncertain and don't already have clear plans to manage your own procurement of HSCN services, either in collaboration with others or on your own, we would strongly recommend you consider joining an aggregated procurement managed by NHS Digital. In this scenario you'll have the chance to input your connectivity requirements and to understand the type and cost of HSCN connectivity services available to you prior to finalising a contract for those services.

We anticipate there being numerous connectivity suppliers competing to deliver HSCN compliant services and would strongly recommend you seek to obtain HSCN connectivity via open market competition, managed by yourself or by us on your behalf, in order to ensure best value is achieved.

An overview of the HSCN procurement routes available is provided below.

Regardless of the chosen procurement route, each organisation must ensure that the Mandatory Supplemental Terms are included in its contract with the supplier.

For procurements run via the CCS RM3825 dynamic purchasing system, the Mandatory Supplemental Terms will already be incorporated in the associated contractual documentation. For procurements run outside of RM3825, organisations must include these to ensure that these key terms are understood by both customer and supplier organisations and adhered to.

By signing the Connection Agreement consumer organisations are obliged to include these terms in their supplier contracts. Suppliers are also obliged to include these terms via their commitment to adhere to the HSCN Obligations Framework.

Across England there are a number of collaborative procurement initiatives taking place where a variety of NHS and social care organisations are coming together to procure HSCN services, often across sustainability and transformation plan (STP) areas. Where health and care organisations, including clinical commissioning groups, purchase network services together they use a Single Supplier Framework. 

Checklist for collaborative procurements

Below is the checklist of actions for which prospective collaborations need to provide evidence they have in place well in advance of the launch of the aggregated procurement for their region. Where collaborations are not confident of meeting these requirements well in advance of the aggregated procurement for their region NHS Digital will bring the organisations involved into the scope of an aggregated procurement.

1. A fully formed Intelligent Client Function, to handle central decision making as a minimum, with appropriate governance mechanisms agreed and in place.
2. A clearly defined operating model and evidence of commitment to it from all partners.
3. A central or lead legal entity in whose name the procurement can be run (for OJEU style procurements).
4. Assigned procurement resources.
5. Assigned legal resources (to draft, review and agree terms and conditions).
6. A clear and fully agreed view of their requirements, documented in a 'scope of services' document.
7. Agreed priority for migration - who goes when and on what timeline.

What is an Intelligent Client Function?

An Intelligent Client Function in the context of HSCN is a capability performed by a lead organisation or group of lead organisations that:

• assumes responsibility for determining service requirements on behalf of a group of organisations forming a joint partnership
• identifies and secures the resources to support the procurement
• provides overall migration coordination and management on behalf of the partner organisations
• provides governance at all stages of the procurement and contract lifecycle
• performs consolidated vendor and service delivery/performance management once a contract has been awarded 

Examples of customer led collaborative procurements

If you wish to join a collaborative group in your region you will need to confirm this formally by getting in touch with your Migration Manager by email at enquiries@nhsdigital.nhs.uk in order to confirm this.

When considering a collaborative approach, you'll need to work with your partners to understand how you'll:

• procure your HSCN services
• migrate your legacy connections
• manage the new contracts and network solution in-life

Customers choosing a collaborative approach typically already have the necessary operating model in place with their partners. This is because they already deliver collaborative IT programmes, such as community of interest networks (CoINs) or other shared IT services. This operating model, which we call an Intelligent Client Function, includes a nominated lead organisation, a procurement capability, access to legal resources and the governance structures and working groups such as a technical design authority. They also already manage shared solutions and contracts/frameworks in-life.

However, some groups of organisations are coming together to build new collaborative capabilities to deliver their own HSCN solution. These groups are typically aligned to the STP footprints and will have longer term visions or strategies for delivering shared IT services; they see HSCN as one of the first steps on that journey.

Important points

Some organisations are collaborating with health and social care partners in the procurement of a shared regional network.

Collaborative procurements require organisations to work together operationally. Specifically, they need to understand their joint requirements and establish joint governance and shared network management arrangements.

Collaborative procurements can be run via the new RM3825 HSCN framework, which is NHS Digital's recommendation. Other frameworks such as, RM1045, do not offer the full range of HSCN complaint suppliers. Some collaboratives are using an OJEU, which is suitable if you have requirements broader than just connectivity and the appropriate resource and expertise to use this framework.

If organisations are not already well progressed with a collaborative procurement they are advised to join an aggregated procurement. They can consider collaborating with other organisations for future contract renewals and for information sharing without procuring as part of a collaborative.

Potential benefits of joining a collaborative:

1. You are able to take advantage of economies of scale generated through the formation of a buying club.
2. Sharing resources can lead to reduced costs and shared procurement expertise.
3. Reduced costs from potential shared connections to buildings with joint occupancy.
4. Greater flexibility and choice with the timing of procurement and migration compared to an aggregated procurement. However you will still need to adhere to NHS Digital overall timelines for procurement and migration.
5. Greater regional health and care integration.
6. Reduced local resourcing requirements through standardised central network management, shared ICT and contract management.
7. NHS Digital can provide you with procurement and project management templates, and advice.
8. You can choose whether to use the DPS RM3825 framework, OJEU, or the existing RM1045 framework depending on your contracting model.
9. Customers choosing a collaborative approach typically already have the necessary operating model in place with their partners, which new organisations joining can integrate with. This is because they already deliver collaborative IT programmes, such as CoINs or other shared IT services. This operating model, which we call an Intelligent Client Function, includes a nominated lead organisation, a procurement capability, and the governance structures and working groups such as a Technical Design Authority. They also already manage shared solutions and contracts/frameworks in-life.
10. Opportunity for greater participation through directly engaging in supplier dialogue and negotiation.

Considerations for collaborative procurements:

1. In order to run a collaborative procurement, it's important to have an established governance structure in place. This will enable the procurement process to progress and allow successful in-life contract management.
2. NHS Digital has put together a checklist of actions which prospective collaborations need to address to be viable. For more details and templates see the section on HSCN collaborative procurement project initiation.
3. Reaching agreement in a collaborative likely requires compromise which may mean less flexibility.
4. Decision making speed may be slower. Costs and resources may not be shared equitably.
5. Procurement decisions may ultimately be in the hands of the lead organisation depending on the nature of the governance arrangements that are put in place.
6. Organisations are not in complete control of their timeline, which could lead to later migration than if going individually.
7. The collaborative is ultimately accountable and responsible for your procurement.
8. When considering a collaborative approach, you will need to work with your partners to understand how you'll procure your HSCN services and any limitations this procurement approach might have on possible routes to market, how you will migrate your legacy connections, and how you will manage the new contracts and network solution in-life.

HSCN will be delivered by multiple suppliers providing interoperable network services that adhere to an agreed set of standards. This means health and social care organisations are able to replace existing N3 connectivity services with HSCN services bought from a choice of suppliers within a competitive marketplace.

HSCN supplier compliance status

Details of suppliers that have applied for and achieved HSCN compliance to date can be found on the HSCN Suppliers page. This is updated regularly.

If you're interested in understanding more about the supplier compliance process visit the HSCN Suppliers page.

Supplier compliance within an NHS Digital-managed Aggregated Procurement

NHS Digital, as the organisation responsible for Aggregated Procurements, has determined that it requires suppliers to be stage 1 compliant to engage in an aggregated procurement and stage 2 compliant in order for a bid to be considered valid.

This means suppliers must be stage 2 compliant by the time they submit their bid as this will be a pass/fail test in the tender evaluation process.

NHS Digital are anticipating that most existing stage 1 compliant suppliers will have achieved stage 2 compliance by the time bids are expected for the first aggregated procurement. As a result NHS Digital does not expect this stance to constrain competition within the Aggregated Procurements.

Table 1 below summarises the level of supplier compliance required during an NHS Digital-led aggregated procurement for HSCN connectivity services.

At what stage within a customer led procurement of HSCN connectivity is a supplier required to demonstrate HSCN stage 1 compliance?

Suppliers must be stage 1 compliant in order to market themselves as an HSCN supplier, take part in HSCN connectivity procurement activity or quote to provide HSCN connectivity services.

NHS Digital expects suppliers to be in a position to provide pricing/quotes for HSCN connectivity services once they have achieved stage 1 compliance.

Stage 1 compliance is also required to get onto the new Crown commercial Service run HSCN DPS (known as RM3825) due to launch in November.

At what stage within a customer led procurement of HSCN connectivity is a supplier required to demonstrate stage 2 compliance?

The stage at which suppliers need to have stage 2 compliance is determined by the organisations responsible for the procurement and is a risk management decision.

Meaning - how far am I prepared to progress my HSCN procurement without knowing for sure that the supplier is capable of deploying live HSCN services?

We recommend that customers require suppliers to have achieved stage 2 compliance prior to award of contract for connectivity services. This will mitigate risks associated with awarding a contract for HSCN services to a supplier who is yet to demonstrate they are able to deploy live HSCN connectivity successfully.

Customers can award contracts for HSCN services to stage 1 compliant suppliers on the basis that they will achieve stage 2 compliance within a defined timescale. This would be done by making the achievement of stage 2 compliance a condition within the contract, known as a 'Condition Precedent', with the preferred bidder. There are risks associated with this if, for example, the supplier fails to achieve stage 2 compliance as and when required by the 'Condition Precedent' within the contract.

Conversely it is also possible for customers to require suppliers to be stage 2 compliant earlier in the procurement process, such as prior to accepting formal bids or quotes for HSCN services.

Table 2 below summarises the level of supplier compliance required or recommended during the procurement of HSCN Connectivity services.