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To evaluate whether a contract modification is permitted under the PSR, the first suggested question is to ask whether the original contract was awarded under direct award processes A or B?

If the answer is yes, the next question is whether the modification renders the contract materially different in character.

If the answer is no, this is a permitted modification. If the modification value is £500,000 or more, then a transparency notice must be published. If the modification value is under £500,000 then a transparency notice is not required.

If the answer is yes, then this modification is not permitted.

If the contract was not originally awarded under direct award processes A or B, the next question is whether the modification is clearly and unambiguously provided for in the original contract.

If the answer is yes, then this is a permitted modification. If the modification value is £500,000 or more, then a transparency notice must be published. If the modification value is under £500,000 then a transparency notice is not required.

If the answer is no, the next question is whether the modification is solely a change in the identity of the provider (i.e., as a result of corporate changes including takeover, merger, acquisition or insolvency)?

If the answer is yes, then this is a permitted modification. If the modification is £500,000 or more, then a transparency notice must be published. If the modification is under £500,000 then a transparency notice is not required.

If the answer is no, then the next question is whether the modification is being made in response to external factors beyond the control of the relevant authority and the provider (i.e., as a result of changes in patient or service user volume or changes in prices in accordance with a formula provided for in the contract documents).

If the answer is yes, then the next question is whether this modification would render the contract materially different in character.

If the answer is no, then this is a permitted modification. If the modification is £500,000 or more, then a transparency notice must be published. If the modification is under £500,000 then a transparency notice is not required.

If the answer is yes, then this modification is not permitted.

If the answer was no to the question about the modification being made in response to external factors beyond the control of the relevant authority and the provider, then the next question is whether the modification is attributable to a decision of the relevant authority and does not render the contract materially different in character, and the cumulative change in the lifetime value or of the contract, compared to when it was entered into, is under £500,000 or under 25%?

If the answer is yes, then this is a permitted modification. If the modification is £500,000 or more, then a transparency notice must be published. If the modification is under £500,000 then a transparency notice is not required.

If the answer is no, then this modification is not permitted.

Publication reference: PRN00853