Overview of the Global Fund Procurement
and Supply Management Issues
Workshop for LAC Consultants 16-18th July 2009
Pharmaceutical Management Advisory Services& Procurement Support Services
Session Objectives
• Overview of Procurement and Supply Management
– Grant Proposal / Negotiation/ Implementation
• Update on Procurement Support Services
– Voluntary Pooled Procurement
– Capacity Building / Supply Chain Management Assistance
SESSION IPROCUREMENT AND SUPPLY MANAGEMENT ISSUES
The Global Fund’s approach to PSM• Principles and minimum standards, not detailed
procedures
• Build upon existing systems
• Distinction between health and non-health products
• Expanded definition of Procurement: Pharmaceuticals & other Health Products Management (How health products arrive in a country and what happens to them subsequently)
• Principal Recipient (PR) responsible for all PSM activities (whether directly implemented or sub-contracted).
The Global Fund’s Approach to PSM
• Requirement for the PR to comply with the Global Fund Quality Assurance (QA) Policy for Pharmaceutical products
• Requirement for the PR to enter in the Price Quality Reporting (PQR) the data related to the procurement and quality of the following products:
– Anti-Retroviral drugs – Anti-Malarial drugs– Anti-Tuberculosis drugs– Condoms– Bednets
Procurement & Supply Management during Grant cycle (1)
• Grant Proposal - Approval– Role of Consultants
• Reflect PSM capacity, capability and system of the PR
• Identify gaps and include budget funds for Technical Assistance and HSS to improve/strengthen PHPM capacity
• Grant Negotiation - Signature– Role of Global Fund
• PSM Plan review and assessment
• Decision on signature, procurement activities, supply management
– Role of Consultants • Support the PR for the development of the PSM plan
– Reflect PSM capacity, capability and system of PR– Identify gaps and describe/propose plan to improve/strengthen PHPM
capacity
Procurement & Supply Management during Grant cycle (2)
• Grant Implementation- Performance – Role of Global Fund
• Advisory• Support
– Role of Consultants • Monitor / supervision• Technical support• Capacity Building
PSM issues identified during PSM plan review (1)
Requests based on PSM Plan Review
0%
5%
10%
15%
20%
25%
30%
35%
Overall adequacyof PSM plan
Procurementpolicies &systems
Forecasting Rational use Pricing
PSM issues identified during PSM plan review (2)
Inconsistency of:– PSM Plan with Budget and Performance Framework– Annexes with the Front table of the PSM Plan
• Unclear rationale and/or Assumptions used to determine the needs
• Insufficient details on the procurement capacity and system of the PR
• Insufficient details and process for the selection of procurement agents
• High product prices
PSM issues identified during Grant Implementation (1)
Requests based on Implementation Issues
0%
5%
10%
15%
20%
25%
30%
Procurementpolicies &systems
ProcurementAgent issues
Forecasting Pricing Product selection
PSM issues identified during Grant Implementation (2)
• Challenges/bottlenecks which slow Grant Implementation– Limited Procurement capacity– Insufficient planning leading to emergency procurement– Weak Management Information System / forecasting
system leading to oversupply and/or undersupply– Delays in shipping and clearance
SESSION IIPROCUREMENT SUPPORT SERVICES
Voluntary Pooled Procurement and Capacity Building Services
• Global Fund Strategic Initiative – Board Decision April 2007
• Procurement Support – grant implementation
– Short-term Strategy • Pooled Procurement
– Long term Strategy• Capacity Building and Supply Chain Management Assistance
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
Country Proposal is approved for TGF Grant
VPP StartsTGF disburses
funds to Principal Recipient (PR)
Patient receives
drugs
PR receives and checks drugs
PR prepares PSM Plan specifying health products
and quantities to orderIndicate VPP participation
Plan is submitted to TGF/LFA for
assessment and approval
PR launches procurement process
PR reconciles needsand funds available
PR evaluates bidsand awards supply
contract
PR places order for drugs and monitors
order status
PR makes payment
PRdistributes drugs
PR collects
consumption information
PR reports
results to TGF
Suppliers submit bids
VPP simplify procurement process – multiple steps eliminated * red boxes
Capacity Building Services
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
Mechanism and Process
• MECHANISM• Initial services identified
– Reflects PRs need
– Areas within PSCM
• Establishing Framework Contracts – Selection of Service
Providers – competitive tender
– Selection criteria – technical capacity, qualification of personnel, past performance and experience
• PROCESS • Stepwise approach –
demand driven– Identify CBS/SCMA needs
(LFA assessment / reports of partners)
– Development of Statement of Work
– Selection and contracting of Service Provider
– Implementation of Service– Monitoring of service
TECHNICAL SUPPORT CHALLENGES
• Checking the Footprints!! How often is Technical Support evaluated?
• Key Challenges:– Technical Support is rarely evaluated
– Supplier driven (what TS funder can or want to provide) and not Demand driven (what is requested or needed)
– Mentality of mute acceptance regarding donor provided / funded Technical Support
TECHNICAL SUPPORT CHALLENGES
• Key Challenges– Short-term focus (fire fighting or institutional
strengthening)
– Service providers are sometimes hesitant to discuss problems
– Service recipients don’t usually provide candid feedback
– Sharing of lessons learnt – good practices, unsuccessful stories