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Tender relationships

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IT would be wrong to suggest that the AHVLA's invitation to tender for the provision of TB testing and other veterinary services, which was issued last week, has been eagerly awaited, but it has certainly been awaited, and for quite some time. It is, in fact, more than four years now since, to the BVA's dismay, the AHVLA announced that it intended to put TB testing out to tender (VR, May 22, 2010, vol 166, p 634) and more than two years since the agency made clear that, despite various concerns about the potential impact of its plans having been raised during a consultation exercise, it intended to press ahead anyway (VR, February 25, 2012, vol 170, p 191).

Last August, the agency set out its plans in more detail, indicating that it expected the new arrangements to become operational in 2014 (VR, August 3, 2013, vol 173, p 103; August 10, 2013, vol 173, p 128). Uncertainty about when the invitation to tender would be issued and precisely what form it would take has caused much anxiety in practice over the past 12 months. Inviting bids and setting out the requirements last week (see p 55 of this issue), the AHVLA said that it would be holding ‘tender clarification days’ on July 30 at Weybridge in England and on August 7 at Builth Wells in Wales, and that the tender period would run until September 9. The outcome might finally become clear by the end of the year but, as the exercise has dragged on, it has already become evident that practices interested in continuing to provide TB testing services have been put through the wringer in the meantime.

The arrangements set out by the AHVLA last week are broadly in line with those outlined last August, but with some potentially significant changes in the details. Under the scheme, contracts will be awarded to a relatively small number of ‘delivery partners’ who will be expected to supply quality-assured services in seven geographical regions or ‘lots’ (five in England and two in Wales) – slightly fewer than the 10 lots envisaged last year. The delivery partners will, in turn, be expected to subcontract work to local businesses, provided those businesses are able to work to the required quality assurance standards and offer a competitive price. ‘The tender,’ the AHVLA says, ‘will focus on the quality of service to be delivered, while ensuring best overall value-for-money for the taxpayer.’

The requirement to subcontract work to local businesses aims to recognise the importance of a strong working relationship between livestock farmers and their local vet. The importance of this relationship – not just in terms of testing for TB but also in terms of disease surveillance and in helping to prevent and control TB and other diseases – cannot be overemphasised, and is perhaps further reflected in a requirement on delivery partners to allow animal keepers to select their preferred vet from these subcontractors – a preference which, the AHVLA says, ‘will be respected wherever possible’. At the same time, delivery partners will be able to employ vets directly or engage self-employed subcontractors. The AHVLA argues that these arrangements will not undermine the relationship between livestock farmers and their local vet because any business offering Official Veterinarian (OV) services in the relevant geographical area should be offered the opportunity to act as a subcontractor provided they meet all the defined minimum eligibility criteria. However, at this stage, it is by no means clear how things will shake out in practical terms and how the structure of local veterinary practice – and hence the relationship between farmers and their vets – will be affected in the longer term.

Similar concerns arise in relation to the (perhaps equally well-intentioned) plans for different regional lots. The aim, as when the Government privatised the railways some years ago, will be to try to ensure that there is competition in the market, although how things will eventually pan out remains to be seen. Having plumped for seven geographical areas, the AHVLA has indicated that businesses may be able to provide services in more than one geographical area, while also making clear that it intends to award contracts for two different delivery partners for the two Welsh lots, and three different delivery partners for the three highest value English lots. It suggests that this approach will ‘maximise competition, improve resilience against the default or insolvency of a supplier, and will avoid over-dominance of one supplier’. It also suggests that having too many lots would exacerbate problems at boundaries. Contracts will initially be awarded for a three-year period, with an option to extend up to a further two years. What happens after that is anyone's guess, and will presumably depend on how things work out over the first few years. Will, as with railway privatisation, a contrived competitive structure be maintained, or will, as some people fear, and has as happened when other government services have been outsourced, a single supplier end up dominating the market?

These are not minor considerations and could have significant implications for the way farm animal practice develops in the future. The AHVLA's invitation to tender rightly acknowledges the importance of the relationship between farmers and local vets in safeguarding animal health and welfare, and also places welcome emphasis on the need to ensure the health and safety of those carrying out TB tests. However, the very nature of the exercise could have unintended consequences for the structure and distribution of veterinary practices and risks damaging those relationships on which so much depends.

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