![Page 1: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/1.jpg)
World Bank Training Program on HIV/AIDS Drugs Training Module 5
Procurement
based on the World Bank document
Battling HIV/AIDS: A Decision Maker’s Guide to the Procurement of Medicines and Related Supplies World Bank, 2004
![Page 2: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/2.jpg)
Session Objectives
• To identify ways to improve efficiency in the procurement process
• To discuss how we can achieve optimal economical results from expenditures of public funds
• To advocate for increased transparency and accountability in public financed procurement
![Page 3: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/3.jpg)
Module Learning Objectives
Upon completion of the module the learner should be able to
• Identify specific components involved in the procurement of the HIV/AIDS care package and their interrelationship
• Initiate an evaluation of the implementing capacity of a procurement system
![Page 4: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/4.jpg)
Module Learning Objectives (Cont.)
•Identify appropriate procurement strategies and key elements of planning
•Choose an appropriate procurement method
![Page 5: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/5.jpg)
Procurement Module( recommended preparatory reading )
– Battling HIV AIDS:
• Chapter 3 page 21 – 30 Managing the supply cycle for better outcomes
• Chapter 5 page 63 – 78 Procurement
– Cameroon vs Malawi as a Case Study in ARV Procurement
![Page 6: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/6.jpg)
![Page 7: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/7.jpg)
Outline of the Module1. INTRODUCTION: Procurement as part of
the procurement cycle 2. Commodities that support HIV/AIDS
programmes3. Procurement methods4. How to choose the “right” procurement
method for a particular situation5. Important procurement elements6. Assessing capacity of procurement agency7. Case study
![Page 8: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/8.jpg)
Objective of Procurement
The process of acquiring- the right quantity
- of the right health products - of the right quality - for the right customer - at the right time - in the most efficient, safest and least
costly way possible.
![Page 9: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/9.jpg)
Procurement as Part of the Supply Cycle
![Page 10: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/10.jpg)
Determine Quantities
needed
Reconcile needsand funds
Choose Procurementmethod
Locate and selectsuppliers
Specify contract termsMonitor
order status
Receive and Check Supplies
Make Payments
Distribute Supplies
Collect Consumption Information
Review Drug Selection
THE PROCUREMENT CYCLEManaging Drug Supply; Second Edition
![Page 11: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/11.jpg)
Procurement as part of the Supply Cycle
Procurement is a cyclical process; a chain is as strong as the weakest link
• Multiple stages: careful scheduling needed
• Better planning can reduce wastage, shortages, costs
• Simultaneous global demand affects supplier lead times
• Product shelf-life impacts planning
• Many stakeholders, many opportunities
![Page 12: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/12.jpg)
The procurement balance
Minimize shortages
Build trust in system
Benefit from bulk purchases
Capital costs
Expiry
Storage costs
Loss
Wastage
More stock
Less stock
![Page 13: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/13.jpg)
The procurement balance
Minimize shortages
Build trust in system
Benefit from bulk purchases
Capital costs
Expiry
Storage costs
Loss
Wastage
More stock
Less stock
STOCK - OUT
![Page 14: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/14.jpg)
You are going to run out of stock
Your stock is going to expire
WHAT ARE YOU GOING TO DO ABOUT IT ?
![Page 15: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/15.jpg)
Unit 1
Specific Issues in Procurementof HIV commodities
![Page 16: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/16.jpg)
Elements of a Comprehensive HIV Care Programme
ARTARVs
Palliative CareDrugs and
consumable medical supplies
TreatmentDrugs, consumables to treat
STI, OI TB
DetectionDiagnostic Agents and lab
supplies
HIV STI TB OIs
PreventionContraceptives, condoms, lubricants, gloves,
protective gear Family Planning
Fro
m:
Batt
ling H
IV/A
IDS.
A D
eci
sion m
ake
r’s
Guid
e t
o t
he P
rocu
rem
ent
of
Medic
ines
and
Rela
ted S
upplie
s.
Worl
d B
ank
20
04
![Page 17: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/17.jpg)
Procurement options differ(products)
• Health Products: - Pharmaceuticals - Laboratory - Medical Devices
• Goods – Office Equipment, air conditioners, Vehicles,
etc.
![Page 18: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/18.jpg)
Procurement options differ (services)
• Services – sub-contracts, engagement of technical
advisers, MIS developers, pharmacists, doctors, trainers, facilitators, security, assessment works, other individual/firm experts, etc.
• Works
– Office renovations, shelves, installations, minor civil works, etc.
![Page 19: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/19.jpg)
Avoiding confusion
STEP 1:
Make sure everybody knows
exactly what you need
![Page 20: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/20.jpg)
Avoiding confusion(when procuring products)
Requirements are defined as “Specifications”
Can be defined based on:– Quality standards / Commercial Standards
– Design Specifications, Labels, Packaging
– Performance Specifications, shelf life, expiry
– Brand or Trade Names
– Samples: Lazy person’s method
![Page 21: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/21.jpg)
Avoiding confusion(when procuring services)
Requirements are defined in the
“Terms of Reference (TORs)”
• TOR should be clear and precise enough for the contractors/bidders to prepare a responsive offer
• TOR also provides the basis of evaluation after completion of Contract
![Page 22: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/22.jpg)
Avoiding confusion(when procuring works )
Requirements are defined in the “Statement / Scope of Works (SOW)”
• SOW is a much more detailed and refined version of the TOR.
• Thorough supervision is required, and performance is bonded/secured financially
![Page 23: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/23.jpg)
Minimum requirements for TORs/SOWs
• Background / Context of Procurement• The aim and objective of the assignment• Scope of the work: Outputs/ Deliverables required of the
contractor• Institutional arrangements, requirements for supervision,
progress reporting and time schedule• Training requirements where appropriate • Additional References (Annexed) to guide the offerors• Duration of the work/Implementation timetable• Level of details of price breakdown• Data, local services, personnel and facilities required from
the buyer• Recommended Presentation of Proposal• Criteria for Evaluation of Proposals
GET ADVICE !
![Page 24: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/24.jpg)
Unit 2
Procurement Methods
![Page 25: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/25.jpg)
Objective of Procurement
The process of acquiring- the right quantity
- of the right health products - of the right quality - for the right customer - at the right time - in the most efficient, safest and
least costly way possible.
![Page 26: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/26.jpg)
Procurement methods• Request for Quotation (RFQ)
most flexible and least formal
• Request for Proposal (RFP)
used in the procurement of services and complex goods (e.g., functional specifications cannot be expressed)
• Single Source /Direct Contracting / Waiver of Competition
there is no competitive market for the requirement, previous tender failed
![Page 27: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/27.jpg)
Procurement Methods
• Invitation to Bid (ITB) normally used when entity is not required to
propose technical approaches to a project activity (i.e., goods, civil works)
– National Competitive Bidding (NCB) with prequalification
– International Competitive Bidding (ICB) with prequalification
– Limited International Bidding (LIB)
• International Shopping (IS)
![Page 28: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/28.jpg)
Procurement Methods (Cont.)
• Use of specialized low cost international procurement suppliers or UN
• Use of Pooled Procurement (PP)
–Group Contracting
–Central Contracting
![Page 29: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/29.jpg)
Single Source or Direct Contracting
Advantages• Availability of
product guaranteed
• Simplified procurement rules
• Expeditious process
Disadvantages• Usually less
competitive prices• Dependent on one
supplier• Less transparent
![Page 30: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/30.jpg)
National Competitive Bidding with Prequalification
• Only applicable if there is a robust and fully qualified local industry
• Not recommended for procurement of medicines
![Page 31: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/31.jpg)
Limited International Bidding (LIB)
Advantages• Competitive prices• Supply of particular
product assured• Quality control
procedures assured• ‘Good’ relationship
with supplier
Disadvantages• Purchaser should
actively follow developments in Pharmaceutical market(e.g. should be very knowledgeable of the market)
![Page 32: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/32.jpg)
International Competitive Bidding with Prequalification
Advantages• Assurance of getting
the lowest price offers
• Transparent• Multi source
products• Quality control
procedures assured
Disadvantages• Expensive process• Lengthy process• HR intensive• Requires highly technical
expertise for evaluation of applicants and bids
![Page 33: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/33.jpg)
International Shopping
Advantages• Speedy and simple
process• Negotiating room on
non-price issues• Useful for emergency
orders• Practical in case of
particular products with few suppliers
Disadvantages• Less competitive
prices• Limited options• Less transparent• Suppliers don’t take
you serious
![Page 34: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/34.jpg)
Unit 3Choosing the ‘Right’ Procurement Method
![Page 35: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/35.jpg)
Comparing methods
Open tender Restricted tender
Larger set of supplier bids to evaluate
Pre-qualify suppliers: Less work for the tenderer; fewer proposals, bids to review
Post qualify suppliers during tender period
Bid evaluation restricted to pre-qualified suppliers; more control over product quality
More competition for lower prices
Both tenderer and supplier know what to expect, based on experience with each other
Lengthy evaluation, need expertise in new markets
Faster bid evaluation, earlier procurement
Possibility of new suppliers submitting bids
Suppliers more likely to respond. Procurement team must seek new suppliers and prequalify
![Page 36: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/36.jpg)
Selection of Procurement Method
IS: International ShoppingNS: National ShoppingDC: Direct ContractSS: Single SourceICB: International Competitive BiddingLIB: Limited International Bidding
Market situation:On patent + available from
originator supplier in
ACCESS Initiative
NOT on patent + available from originator and
generic manufacturer
Not on patent + available from
originator ONLY, or on or more generic manufacturer ONLY
Contracts:
Small
Medium
Large
![Page 37: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/37.jpg)
BUZZ Group Exercise 1
Per table: Divide into two procurement expert groups
Sub group 1: You are international experts. Suggest the most effective procurement method for the nine options proposed
Subgroup 2: You are national experts. Suggest the most effective procurement method for the nine options proposed within the local financial rules
![Page 38: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/38.jpg)
Adherence toProcurement principles
1. Divide key functions among different offices2. Procurement should be transparent with SOPs3. Procurement should be planned and
monitored4. Limit medicines to EML or formulary5. List products by INN6. Quantities should be based on
actual need
![Page 39: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/39.jpg)
Adherence to Procurement principles
7. Ensure reliable financing
8. Procurement should take advantage of economies of scale
9. Use competitive procurement methods
10. Purchase only from supplier awarded tender
11. Pre-qualify suppliers
12. Procurement procedures should assure all drugs are quality assured
![Page 40: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/40.jpg)
Procurement in context
Best practices must balance between:• Distribution capacity• Storage capacity• Procurement staff capacity• Health delivery capacity• Available finances• Time…
![Page 41: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/41.jpg)
Structures for Storage and Distribution
• Government Central Medical Store
• Autonomous supply agency
• Direct delivery system
• Prime vendor system
• Private supply system
![Page 42: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/42.jpg)
Unit 4
Important Procurement Elements
![Page 43: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/43.jpg)
Procurement Flow Chart
Supplier of ARTS
Procurement agency: tender
process
Purchaser of ARTS
Regulatory agency registration
Authorities & donor: Tender model
Storage of ARTS
Distribution of ARTS
Health facility ordering and issuing ARTS
Preparation of H/F orders
![Page 44: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/44.jpg)
Procurement Planning1. Identify requirements to initiate and
complete your procurement
• Clarify scope of the task/specifications• Time required for each task• Staffing levels• Resources: financial, storage, logistics• External dependencies
HOW WILL THIS ACTIVITY GO TO SCALE ?
![Page 45: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/45.jpg)
0
200
400
600
800
1000
1200
1400
1600
Treatment period
Es
tim
ate
d v
s r
ea
l e
nro
lle
me
nt
Estimate
Real
Place order
Stock arrive
![Page 46: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/46.jpg)
Procurement Planning 2. Schedule all tasks
Procurement phase 1 2 3 4 5 6 7 8 9 10 11 12Plan procurementIdentify staffDevelop written proceduresSelect productsDetermine order quantitiesPrequalify suppliersTenderAdjudicate and awardEstablish QA/QC systemGoods in transitReceive and QC medicinesMonitor supplier performance
Month
![Page 47: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/47.jpg)
Procurement Planning 3. Scheduling procurement
• How long will procurement take?• When to start? • How often to procure?• What to do if shortages are possible?• How to monitor the process?
![Page 48: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/48.jpg)
Procurement Planning 4. Identify and Manage Cost Factors
• Interval between orders• Safety stock levels• Increased costs from emergency orders• Bulk procurement• Reliable payment• Hidden costs
![Page 49: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/49.jpg)
Procurement Planning 5. Identify critical path items
• Identify tasks that can disrupt schedule• Develop strategies to monitor and keep:
– critical path items on schedule– external dependencies on schedule
• Monitoring of contract terms, and application of penalties
![Page 50: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/50.jpg)
Procurement Planning 6. Expedite: Product available for use
Procurement phase 1 2 3 4 5 6 7 8 9 10 11 12Plan procurementIdentify staffDevelop written proceduresSelect productsDetermine order quantitiesPrequalify suppliersTenderAdjudicate and awardEstablish QA/QC systemGoods in transitReceive and QC medicinesMonitor supplier performance
Product distributionProcess monitoring
Month
![Page 51: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/51.jpg)
Procurement and Supply Chain Magagement ConsortiumThe Executive Committee
KEMSAChairman
Crown Agents Secretariat
GTZAccountant
JSIMember
Project Management UnitPhase 2
PMU Team leader
GTZFranz Frederichs
Technical Director
KEMSADr. M. Lewa
Logistics Expert
JSISteve Kinzett
ProgrammerGTZ
Samuel Otoko
ProgrammerKEMSAL. Mueri
ProgrammerJSI
Mercy Maina
Procurement ManagerCA
Robert Nyamweya
Procurement ManagerKEMSAMr. Kavi
Logistics ManagerKEMSA
A. Kaburu
Procurement OfficerGTZCaroline Minayo
Procurement OfficerKEMSAJoseph Mburu
Logistics OfficerJSIJane Wawer
Warehouse/Logistics OfficerKEMSAMr. Kyalo
Office Asst - GTZE. Ikua
Office Asst-KEMSAL. Mutua
Office Asst - JSINN
Office Asst - CANN
Office Asst - KEMSALeah Biketi
Procurement Expert
CAAlan Pringle
Driver CANN
Driver GTZPaul Wanyoike
Driver CANN
Driver JSINN
KENYA PROCUREMENT AND SUPPLY CHAIN MANAGEMENT
![Page 52: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/52.jpg)
Contra-ceptives and
RHequipm ent
STIDrugs
EssentialDrugs
Vaccinesand
Vitamin ATB/Leprosy
BloodSafety
Reagents(inc. HIV
tests)
DFID
KfW
UNICEF
JICA
GOK, W B/IDA
Source offunds for
commodities
CommodityType
(colour coded) M OHEquip-ment
Point of firstwarehousing
KEM SA Central W arehouse
KEM SARegionalDepots
Organizationresponsible
for delivery todistrict levels
KEM SA and KEM SA Regional Depots (essential drugs, m alaria drugs,
consum able supplies)
ProcurementAgent/Body
Crow nAgents
Governmentof Kenya
GOK
GTZ(procurem ent
im plem entationunit)
JSI/DELIVER/KEM SA LogisticsM anagement Unit (contraceptives,
condom s, STI kits, H IV test kits, TBdrugs, RH equipm ent etc)
EU
KfW
UNICEF
KEPI ColdStore
KEPI(vaccines
andvitam in A)
M alaria
USAID
USAID
UNFPA
EUROPA
Condom sfor STI/
HIV/AIDSprevention
CIDA
UNFPA
USGov
CDC
NPHLS store
M EDS(to M issionfacilities)
PrivateDrug
Source
GDF
Governm ent
NGO/Private
Bilateral Donor
M ultilateral Donor
W orld Bank Loan
Organization Key
JapanesePrivate
Com pany
WHO
GAVI
SIDA
NLTP(TB/
Leprosydrugs
Commodity Logistics System in Kenya (as of April 2004) Constructed and produced by Steve Kinzett, JSI/Kenya - please communicateany inaccuracies to skinzett@ cb.jsikenya.com or telephone 2727210
Anti-RetroVirals
(ARVs)
Labor-atorysupp-
lies
GlobalFund forAIDS, TB
and M alaria
The"Consortium "
(Crow n Agents,GTZ, JSI and
KEMSA)
BTC
M EDS
DANIDA
M ainly District level staff: DPHO, DPHN, DTLP, DASCO, DPHO, etc or staff from the Health Centres,Dispensaries come up and collect from the District level
M EDS
Provincial andDistrict
HospitalLaboratory
Staff
Organizationresponsible fordelivery to sub-
district levels
KNCV
M SF
M SF
![Page 53: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/53.jpg)
Is the Procurement of ARVs
something special ?
![Page 54: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/54.jpg)
BUZZ Group Exercise 2
As a group, discuss those issues that make the procurement of ARVs different from the procurement of the essential commodities we routinely procure for our programmes
List the 3 most important considerations that affect procurement of ARVs
Be prepared to explain to the meeting why you have listed them as priority considerations
![Page 55: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/55.jpg)
Is the Procurement of ARVs
something special ?
![Page 56: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/56.jpg)
Technical Issues
• Each single treatment needs an uninterrupted life long supply of ARTS
• ARVs are combination medicines• Need to be combined with other drugs
to treat Opportunistic Infections (OIs)• Need to be combined with proper lab
testing facilities (supplies!!)• Decentralisation to community level• ARVs are scarce and valuable
![Page 57: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/57.jpg)
Development and Research Issues
• Service provider, client and community education are in an early stage of development
• Treatment protocols and ARVs are subject to continuing research: changes can occur quickly and can be significant
![Page 58: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/58.jpg)
Financial Issues
• ARVs are scarce and (still) expensive, prices change frequently: procurement planning difficult
• These ‘ small ’ and often ‘ vertical ’ programmes have a HUGE impact on the health budgets and probably the economy of small countries
![Page 59: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/59.jpg)
Political & Social Issues
• AIDS = Politically sensitive
• AIDS = Stigma
![Page 60: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/60.jpg)
Product Registration
• ARVs change rapidly and often need “fast track” registration
• Special “fast track” procedures should be encouraged
![Page 61: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/61.jpg)
Legal Issues
• International: TRIPS
• National: existing legislation, fast track registration of medicines, quality control, procurement etc
![Page 62: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/62.jpg)
Conclusions• The procurement of ARVs has very specific
components that differ from the procurement of other drugs
• The strategy and planning of procurement of ARVs can only be short term and flexible due to rapidly changing treatment protocols and market situation
• The procurement of ARVs must be a long term commitment
![Page 63: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/63.jpg)
UNIT 5
Assessing the Capacity of a Procurement Agency
![Page 64: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/64.jpg)
Why is capacity of a procurement agency
important?Procurement of ARVs is critical to:
• Successful project implementation
• The attainment of the objectives of the project
• Sustainability
![Page 65: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/65.jpg)
Objectives of Assessment
• To evaluate capability of the implementing agency and adequacy of the procurement systems in place
• Assess the risks (institutional, political, organizational, legal, procedural etc)
• Develop an action plan to address deficiencies and to ensure coordination
• Propose a suitable procurement supervision plan, now and in SCALE UP
![Page 66: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/66.jpg)
Elements of Assessment
• Existing infrastructure and capacities• Compliance with guidelines, local & int• Organization / organizational capacity• Bureaucracies: Approvals procedures,
Practices• Human Resources• Physical Resources• Record keeping, good management
information
![Page 67: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/67.jpg)
Results of Assessment
• Procurement capacity sufficient
• Activities to introduce new commodities / Deficiencies that can be addressed
• Third party required ? (procurement agent, distribution agent)
![Page 68: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/68.jpg)
Assessing the robustness ofProcurement Planning
HIV-AIDS procurement needs are difficult to plan in advance for a complete program; how strong are the links ?
• Funding
• Capacity
• HIV testing programmes
• Community involvement
• Changing protocols and prices
![Page 69: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/69.jpg)
Assessing the robustness ofProcurement Planning (Cont.)
• Are there sub-projects or – components, taking policy priorities into account
– Plan for those components ? – For a limited period ?
• Planning to expand capacity, how will it be updated ?
![Page 70: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/70.jpg)
Assessing the robustness ofProcurement Planning (Cont.)
Procurement Scheduling
• When are goods and services needed ?
• Was a time frame prepared, working backwards from desired date of delivery ?
• Then determine if and how procurement can / should be arranged
![Page 71: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/71.jpg)
Procurement Strategy for Each Product Category
• Multi source/ generic products
• Limited source products
• Single source products
![Page 72: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/72.jpg)
![Page 73: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/73.jpg)
Prequalification of Suppliers
Is prequalification of suppliers part of the strategy ?
What are the benefits of prequalification to the programme ?
•Registration
•Quality control
![Page 74: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/74.jpg)
Key determinants
• Value of the procurement
• Lead times: How fast are the products needed
• Number of potential suppliers
• Donor requirements
• National policies
• Patent issues
![Page 75: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/75.jpg)
Storage and Distribution
• Assessment of capacity and capability
• Conditions of storage and transport
• Is a separate storage and distribution system needed?
![Page 76: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/76.jpg)
Push and Pull
•Push system:
Health authorities determine what and how much a health facility will receive
•Pull system:
Health facility prepares requisition often based on consumption data
![Page 77: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/77.jpg)
Push and Pull
Advantages and Disadvantages
• Continuing presence of the right quantities
• Rational selection
• Flexibility
• Waste, overstocking, undersupply
• Capacity building etc
![Page 78: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/78.jpg)
BUZZ Group Exercise 3As a group, briefly share how the procurement of HIV COMMODITIES
is organised in your country, using the following points as guides:• Current MoH Procurement agencies involved• The Bidding process• Pre-qualification of suppliers, quality control• Bid evaluation, contract awards and management• Warehousing, storage and distribution• Capacity to support programme(s) going to scale
Is the capacity in your procurement agency sufficient to conduct this procurement ?
List the 3 most important deficiencies that need to be addressed for you to be a ‘ BEST PRACTICE EXAMPLE’ in the region.
If you were to issue a bid for a third party procurement agency to conduct procurement on your behalf, what are the three most important considerations to take into account
![Page 79: World Bank Training Program on HIV/AIDS Drugs Training Module 5 Procurement based on the World Bank document Battling HIV/AIDS: A Decision Makers Guide](https://reader036.vdocuments.us/reader036/viewer/2022062318/551539fa55034685568b4baa/html5/thumbnails/79.jpg)
You are going to run out of stock
Your stock is going to expire
WHAT ARE YOU GOING TO DO ABOUT IT ?