7.—(1) Subject to paragraphs (2) and (3), if, in the course of negotiations intending to lead to a contract, the prospective contracting parties are unable to agree on a particular term of the contract, either party may refer the dispute to the Secretary of State to consider and determine the matter in accordance with the procedure provided for in paragraph 30(2) and (3) of Schedule 1 (NHS dispute resolution procedure).
(2) Paragraph (1) does not apply in the case where both parties to the prospective contract are health service bodies (in which case section 9(7) (NHS contracts) applies).
(3) Before referring the dispute for consideration and determination under paragraph (1), both parties to the prospective contract must make every reasonable effort to communicate and co-operate with each other with a view to resolving it.
(4) Disputes referred to the Secretary of State in accordance with paragraph (1) or section 9(7) shall be considered and determined in accordance with the provisions of paragraphs 30(4) to (13) and 31(1) (determination of dispute) of Schedule 1 and paragraph (5) (where it applies) of this regulation.
(5) In the case of a dispute referred to the Secretary of State under paragraph (1), the determination—
(a)may specify terms to be included in the proposed contract;
(b)may require the PCT to proceed with the proposed contract, but may not require the proposed contractor to proceed with the proposed contract; and
(c)shall be binding upon the prospective parties to the contract.