As an experienced lawyer, Nigel Wilson has worked on several major deals during his career, but the massive pathology service outsourcing that RPC finalised last year, was the first one during which he needed time off to get married.
“This deal stood out for many reasons: the size, the complexity, the fact that we were supporting the NHS as they were hugely stretched, supporting all of us. This deal pretty much did have it all: it demanded and received the collaborative support of our expert teams across procurement, finance, tax, corporate, employment, property, sensitive personal data, commercial and IT. More important than the size or complexity though, is the fact that the services to be provided under this project are life-critical,” Wilson, the project’s lead associate, explains. “All that aside, this is the only deal from which I’ve had to take leave to get married,” he adds.
RPC’s technology team, led by technology and outsourcing partner Mark Crichard, advised two of the UK’s largest teaching hospitals, King’s College and Guy’s & St Thomas’, on the re-tender of their outsourced pathology services and associated public private joint venture, in a fifteen-year deal worth more £1.5bn.
Back in 2010, these two trusts entered into a joint venture with Serco and outsourced a large part of their then pathology services to that joint venture (a unique transaction at the time). Those contracts were due to expire in 2020, so the two trusts, plus three other smaller London hospitals and local Clinical Commissioning Groups (CCGs), launched a regulated public procurement, to re-tender those services.
Wilson joined RPC in October 2019, having qualified at legacy Pinsent Curtis in 1998. “It took me too long to find my way to RPC,” he quips. “Many large projects are complex; however, this one was a step apart from anything I have advised on previously. This was the first second-generation pathology services procurement. The procurement was for two separate hospital trusts, operating across numerous sites, some of which needed some repair, critical healthcare assets were to be transferred, the data involved was as sensitive as can be, staff will transfer, services will be operated though newly-formed corporate entities, the service delivery model is to be substantially transformed, numerous IT systems and services had to be maintained, the services that the supplier is to deliver are dependent on services that the trusts will provide to it and all of this was running alongside another critical patient-related project the trust was conducting at the same time – all of which is required to support the hospitals to deliver life-critical treatment at world-leading teaching hospitals.”
The team advised both trusts on the procurement, from its start in summer 2018. This was the first ever second-generation pathology outsourcing in the UK, which (aside from also being comfortably the largest such deal ever awarded in the UK) was made substantially more complicated by the fact the original joint venture had to participate in the tender like a fully independent third party (to comply with public procurement rules). To exacerbate matters further, that joint venture brought a formal legal procurement challenge part way through the process.
RPC was required to solve several complex (and often intertwined) issues, including outsourcing, technology, tax, procurement and corporate issues. To name one example, a key part of the new procurement is to deliver major transformation of the pathology operations at both hospitals, through the creation of a major new centralised pathology hub (involving the negotiation of a 20 year lease for that new hub), major process and IT changes along with the introduction of “digital pathology” – requiring the team to draft contracts which incentivised delivery and protected the trusts from late delivery of the transformation benefits (all of which was vital to achieving the targeted financial savings and improvements in quality).
The team was also instructed to structure the deal to ensure that it aligns with current VAT requirements (which involved splitting the outsourcing, so that infrastructure related services are provided by one legal entity and the “hands on” manual analytics services are provided by a different, separate entity) – vital for pathology providers being able to recover input VAT; negotiate the structure and terms of a new joint venture with the new appointed joint venture partner (Synlab), in addition to managing the participation of the original joint venture in the tender process; and ensure the new contracts include the expanding requirements for genomic testing (probably the fastest growing element within pathology) at the same time that the NHS is seeking to consolidate provision into area hubs.
In addition to running a large regulated procurement project of such scale (a major task in its own right), the team was required to work with and manage a variety of different stakeholders (beyond having two main clients), including the key CCGs and NHS England. Signing eventually took place electronically, coordinating 126 signatures across 32 separate agreements over the course of a long weekend.
Asked what he learnt from the deal, Wilson says, “The saying, ‘and we’re nearly there now …’ to my wife, in relation to the closing of the project, apparently wears a bit thin after a few weeks/months.” And, he adds that, completing a deal of this size over video-calls is possible, if it’s managed properly.
“As you would expect on a complex deal, there were many points of contention, some of which took longer than others to resolve. One area that did require some attention was the logistics of completion. In a virtual world there was no scope for a traditional completion meeting in which all pages could be turned, initialled and seals applied. We established virtual rooms for documents to be reviewed where the key approvals could be recorded, all in advance of a very carefully and necessarily choreographed collection of the signatures. I can’t recall the exact numbers but there were over a hundred documents for which the respective approvals and appropriate signatures were recorded and collated,” he explains.
“I learnt a lot from the way Mark managed the progress of the deal, keeping clients, the supplier and their team, and our colleagues on the straight and narrow and focused on the issues that mattered to getting the right deal done in the most effective manner possible. His understanding of a deal of this type in this sector is unsurpassed. His experience meant that he could be on top of the detail but still focus on the strategic matters and the delivery of the whole.”
The new hub that is being created, will also open up significant opportunities for wider consolidation (which has been an objective in the sector since the Carter Report, way back in 2008. The RPC team is now working with the trusts to find innovative ways to help them manage these highly complex and lengthy contracts. For example, they are exploring the use of various technology tools to enable the Trusts’ contract managers and clinicians to manage and run the contracts efficiently, and to make sure that the transformation programme remains on track. This ongoing instruction is testament to the team’s expertise and high standards of client service and care.
Our experience of working on the first major second-generation deal is already also proving valuable to other NHS organisations, as we have recently been instructed to advise another key client on how they might plan for (and manage the risks involved in) the re-tender of their equivalent deal.
Previously, Wilson has worked on a wide range of deals across sectors, including financial services and insurance, technology and retail. “That’s one of the reasons I love this working for RPC’s CTO team. Among many things, I helped procure the Census – a great project for an ex-Geographer, I’ve worked with aircraft carriers at the end of the office, and I worked in Amsterdam for a year procuring HR and IT services for a bank. Recently, I’ve helped deal with the issues arising out of the auction of NFTs (non-fungible tokens for digital art), developing the necessary Ts and Cs,” he says.
“I worked with Paul Joukador on the NFTs project. With Mark Crichard on the Pathology project (NHS) and supporting one of his outsource service-provider clients. I’m currently working with our new head of team, Tom Purton, on a number of logistics-related contracts.”
The pandemic once again was a major feature of this deal. Not least because it involved the NHS itself, while it was under the most intense scrutiny and pressure. “The fact we did get to completion demonstrated that the loss of in-person negotiations was not a block on progress, but I think it was a drawback. In the circumstances, Zoom and Teams were essential to getting to completion but my overall sense is that the nature of remote negotiations meant that some positions were not resolved as quickly as they might have been,” Wilson reflects. “We did identify this as a concern and adapted and updated our ways of working to better communicate actions and updates. In that way we did ensure that the team kept on top of progress and their responsibilities. We have reused some of those same approaches on other matters since this project.”
Ultimately, it was teamwork that got the dal over the line, he says. “That applied within the RPC team, between our team and the clients’ teams and between our side and the supplier side. This deal needed the support and input of everyone involved to see it through – completing a deal of this size for hospitals against the background of a pandemic was real testament to the hard work of all those involved. I do want to note that, whilst most of us were locked down, we were taking instructions from doctors, dressed in scrubs just off the wards. Their commitment to and engagement with the project was a lesson to us all.”
About Nigel Wilson
2019-present: Of counsel, RPC
2014-19: Senior lawyer, PwC
1996-2013: Lawyer, Pinsent Masons
Who’s Who: the RPC team
Lead lawyer: Mark Crichard