PROCUREMENT SUPPORT SERVICES

Voluntary Pooled Procurement & Capacity Building Services

Technical Briefing Seminar November 18, 2009

4. Board decision to implement VPP/ CBS as a Strategic Initiative

3. Discussion on strategies to improve grant performance

2. Major Challenges -Procurement and supply management of Health products

1. Secretariat monitoring grant performance

Procurement Support Service

Why Procurement Support?

Voluntary Pooled Procurement & Capacity Building Services

• Board Decision 2007– Strategic Initiative to improve Grant Performance

• Objectives – Leverage Global Fund Purchasing Power

• Improve Market outcomes – Prices, quality, supply, sustainability• Address Procurement bottlenecks / challenges – procurement process

and delivery outcomes – To improve in-country capacity for effective, efficient & sustainable

supply chain systems

• Model – Pooled Procurement – short-term strategy– Supply Chain Management support – long-term strategy

PROCUREMENT SUPPORT SERVICES - A Coordinated Approach to Procurement and Supply Chain Management Support

VPP:Simplifies Procurement Process

• Reduce timelines for ordering and deliveries

• Ensure compliance with Quality assurance policy

• Facilitates timely payment

• Meet the needs of Principal Recipients

CBS/SCMA: Addresses challenges in Supply Chain Management

• Through provision of Technical Support

• To strengthen existing capacities / systems

• Focus- Quantification, Storage, Distribution, Logistics Management Information activities

• In collaboration with development partners

VPP:Simplifies Procurement Process

• Reduce timelines for ordering and deliveries

• Ensure compliance with Quality assurance policy

• Facilitates timely payment

• Meet the needs of Principal Recipients

CBS/SCMA: Addresses challenges in Supply Chain Management

• Through provision of Technical Support

• To strengthen existing capacities / systems

• Focus- Quantification, Storage, Distribution, Logistics Management Information activities

• In collaboration with development partners

Participating PRs

Consulting /TA agencies

Procurement Support Service

The Global Fund

”PQR”

Secretariat

Data input

VPP Procurement

and Delivery of health products

CBS/SCMATechnical

support for the management and delivery of health

products in country

Procurement Agents

PrincipalRecipients

TA Services

VPP Orders / Information

CBS/SCMA Providers

Suppliers/ Manufacturers

Procurement Support Services

• VPP and CBS/SCMA – Voluntary

• PRs can access either VPP or CBS or both

• Procurement Support Service Team facilitates this process through mails, tele-conference or country visits (if required)

• Registration of PRs for participation is through FPMs

VPP Model

1. VPP Products• Core products: 1st and 2nd Line ARVs; ACTS; LLINs• Additional products: Drugs for Opportunistic Infections;

Lab. Equipment and Reagents; Diagnostic Tests; Condoms; KO Tabs

2. Establishment of pool of suppliers (Negotiation)• Product eligibility (Prequalification)

• ARVs / ACTs – Global Fund Quality Assurance Policy • LLINs – WHOPES recommendation

• Negotiation outcome – Agreement on prices, terms and conditions (term sheet)• ARVs / ACTs – Maximum / ceiling prices • LLINs – Tender bid / fixed prices

VPP – Model And Process

3. Procurement Agents:• Partnership For Supply Chain Management (PFSCM)

– ARVs, ACTs & additional products

• Population Service International (PSI)– LLINs

4. Operational Process• Aggregate demands, process orders / deliveries• Selection of manufacturers – competitive process • Process payments to manufacturers / suppliers• Input data in Price Quality Reporting system

VPP meeting the needs of PRs

• Low procurement volumes /unable to obtain competitive pricing

• Limited capabilities / service of Procurement Agent required

• Procurement challenges - lead time from suppliers, Compliance with the GF Quality Assurance policy, competitive and transparent process

• Challenges on scaling up treatment and prevention

VPP Simplify Procurement Process – Multiple Steps Eliminated

PR receives

and checks drugs

PR makes

payment

PRdistributes

drugs

Patient receives

drugs

PR collects

consumption

information

PR reports

results to TGF

Approval of Country

Proposal for TGF Grant

PR prepares PSM Plan specifying health

products & quantities

TGF disburses funds to

PR

Plan Submission

For TGF Assessment and Approval

PR launches procurement

process

Suppliers submit

bids

PR evaluates bids

and awards supply contract

PR places order for drugs and monitors

order status

PR reconciles

needsand funds available

Indicate VPP participation VPP Starts

VPP Services

• Operational – Orders being processed

• Procurement Service Fees• LLINs – 2.5% FOB for delivery at Port of Entry

3.0% FOB for delivery to State / Regional level

• ACTs – 6.5% FOB price• ARVs – 6.2% FOB price• Additional products:

– Drugs for Opportunistic Infections 9%

– Test kits (Malaria; HIV) 6%

– Laboratory equipment and supplies 8.5%

– Condoms 9%

VPP Participation

• Confirmed participation 30– Number of grants 55

• In discussion 18– Number of grants 31

• Capacity Building Services– 1 concluded with contracts– 12 in discussions

• Consultation – confirm areas for intervention

• Development of work plans

• Facilitation of Contracting with TA Providers

Country Participation & Grants

Cluster Country HIV Malaria Cluster Country HIV Malaria

EA Uganda   WCA Cameroon  

EAP Indonesia   Congo  

  Lao PDR   Guinea

  Papua New Guinea     Guinea-Bissau  

  Philippines   Nigeria  

  Timor Leste     The Gambia  

EECA Armenia     Togo  

  Macedonia   LAC Brazil  

MENA Niger     Dominican Republic

SA Swaziland     Guyana  

  Zambia   Haiti  

SWA Bangladesh     Nicaragua

VPP Procurement of Nets

• Orders processed (Individual tenders)• Nigeria 3. million Nets - delivered• Indonesia 1,1million – ready for shipment • Bangladesh 0.5million – in progress• Swaziland 91,000 – in progress

(Total 5 million nets)

• Orders in the pipeline (consolidated tender issued)• Nigeria 27million • Uganda 7.3million• Indonesia 4.9 million (Total 39.2 million nets)

• Orders in the pipeline (consolidated tender issued)• Zambia 215,000 • Timor Este 97,500• Nicaragua 30,000 (Total 342,500 nets)

• Next planned tender– pending confirmation • Estimated 10 million nets (2 countries)

Update Status – ARVs and ACTs

• ARVs– Macedonia, Haiti, Lao, Armenia, Zambia, Guinea

Bissau, Mozambique

• ACTs– Bangladesh, Cameroon, Guinea, Indonesia, Lao PDR,

Mozambique, Nigeria, Papua New Guinea, Timor Leste, Zambia

CBS/SCMA - Model & Process

Areas:–Quantification / Forecasting–Procurement Planning–Inventory / Logistics Management

Types:–Training (groups / individuals / short-term / long-term)–Technical Support (Short-term / long-term / transfer of

skills (I do-you watch/ we do/ you do-I watch scenario) –Developing Systems / Tools

CBS/ SCMA: Mechanism and Process

Financing

Contracting CBS / SCMA

• PR pays for service from grant• Reallocation of funds in existing grants and/or • Inclusion in future grant proposals

• Direct Payment to service providers

• PRs choose from available services • Global Fund facilitate implementation of services• Global Fund monitor service provided

Identifying needs

• PRs identify CBS/SCMA needs (LFA assessments / reports of partners etc)

Op

era

tio

na

l Mo

de

l

CBS / SCMA Process

• Technical Support Services – Framework contracts with Service Provider

• John Snow Inc. (JSI)• i+solutions• University Research Co. (URC)

– Collaboration with Technical Partners • Access existing pool of service providers• Coordinate activities at country level

• Registration and consultative process ongoing

Accessing VPP and CBS/SCMA

• Indicate during grant proposal / negotiation• Confirm participation through a registration letter (FPM)

– Indicate grant, product category, time frame for VPP or CBS

• Indicate on PSM Plan – VPP for procurement services– CBS requirements and budget– Ensure PSM Plan approval

• Procurement of health products – Submit list of products for procurement

• Adequate information on product specifications, quantities and reasonable schedule for delivery

– Request for direct disbursement of fund to Procurement Agent

Accessing VPP and CBS/SCMA

• Capacity building service / Technical Support– Define Scope of work and deliverables– Selection of service provider– Request for direct disbursement of fund to Procurement Agent

• Direct communication to Procurement Agent or CBS/SCMA Service Provider is facilitated throughout the process

• Procurement Support Service Team monitors the process and performance of the Procurement Agent / Service provider