Best Practices for Procurement of LLINs. RBM Procurement and Supply Management Working Group AMP Meeting, Nairobi, Kenya September 2009

Transcription

1 Best Practices for Procurement of LLINs RBM Procurement and Supply Management Working Group AMP Meeting, Nairobi, Kenya September 2009

2 Outline Overview of the procurement cycle for LLINs Potential players and stakeholders Good procurement practice Planning for procurement The procurement process Quantification Procurement methods Supplier selection and prequalification Product specifications Monitoring suppliers Customs clearance and distribution Common challenges and overcoming them 1

3 Procurement Cycle Review LLIN Selections Determine Quantities Needed Monitor Use Reconcile Needs and Funds Distribute Choose Procurement Method Make Payment (based on contract terms-may be before) Specify Contract Terms Initiate Procurement Receive (port clearance) and check LLINs Manage Tender Process (bid evaluation, no objection if needed etc) Monitor Order Status Evaluate and Select Suppliers 2

4 Potential Procurement Players Buyer Donor Government: procurement office, tender board, tender committee Procurement agent International organization (e.g. UNICEF, UNOPS) Nongovernmental organization or government aid agent Seller Manufacturer Procurement Agent Wholesaler 3

5 Potential Procurement Players (2) Donor/s Regulators WHOPES In country regulatory authority (Ministry of Agriculture, Ministry of Health etc), if applicable Wholesaler Inspection agent Clearing agent Freight forwarder Insurance claims assessor Other: depending on type of campaign, mass distribution (EPI) 4

6 Objectives of a Good Procurement Program Procure the right medicines/nets in the right quantities at the lowest possible purchase price Select reliable suppliers of quality products (i.e. WHOPES recommended) Ensure timely delivery and notification Ensure the lowest possible total cost 5

7 Operational Principles for Good Procurement Efficient and transparent management of process Product selection and quantification Financing and competition Supplier selection and quality assurance Timely receipt of LLINs 6

8 Impact of Hidden Costs in Procurement Source: MSH (1997) 7

9 Good Procurement Practices In accordance with national and donor policy Procurement in bulk Competitive bidding process (based on pre-qualification) Commitment to evaluated source/s Formal supplier qualification and monitoring Order quantities based on reliable estimate of actual need Timely payment and use good financial management Transparency and follow written procurement procedures Separate key functions Quality assurance mechanisms (pre- or post- shipment) Annual audit with published results Regular reporting on performance Coordinate of multiple sources and donors (MoH, GF, PMI, WB Booster) 8

10 Planning for Procurement Plan for procurement lead time: in country procedures as well as supplier lead time Ensure that all support costs related to LLINs distribution, logistics, training, monitoring, and continuous information and education for use of LLINs are budgeted for in order to deliver the LLINs to the target population during program implementation For planning purposes: standard FOB prices for rectangular LLINs range from USD 4 to 7 Involve appropriate stakeholders Obtain copy of written procurement procedures Determine and assign roles and responsibilities Obtain information on storage and distribution capacity (in case of staggered deliveries) Determine proportions for mass distribution (campaigns) and routing delivery 9

11 Procurement Process Decide on method of procurement based on donor guidelines and country policy VPP Compile product specifications Determine procurement parameters Type of distribution: routine/campaign Procurement period Expected procurement lead time Safety stock requirements Quantify requirements According to estimated life span of LLIN Verify budget estimates and secure funds 10

12 Procurement Process (2) Decide on/verify procurement procedures Tender committee, assign responsibilities, documentation, laws and waivers (if needed) Inform all stakeholders Ministry of Health Ministry of Finance Central Medical Stores/other storage and distribution facility EPI or other stakeholders for campaigns Determine supplier selection and adjudication criteria Obtain approval from tender committee, finance department, donor 11

13 Procurement Process (3) Prepare tender documentation Advertise and invite bids Open bids Adjudicate offers Award tender Contract Make financial arrangements Explore direct payment and/or other payment options Monitor performance 12

14 Quantification Mass coverage vs. routine distribution Universal coverage 1 LLIN for 2 people Initial 80 % coverage can be achieved through time limited distribution campaign and maintained by distribution through routine health services (e.g. antenatal care (ANC) or routine Expanded Program on Immunization (EPI). Routine distribution of 10 % of the number initially distributed is enough to maintain coverage between 80 and 85 % Estimate nets needing replacement (old nets) 13

15 Procurement Methods Open tender Restricted tender Competitive negotiation Direct procurement Using UN agencies E-procurement 14

16 Comparison of Methods Method Effect on Price Lead Time Workload Open Tender Usually lowest prices Moderate to long High Restricted Tender Favorable Moderate to long High Competitive Negotiation Can be favorable Short to moderate Moderate Direct Procurement Usually highest prices Short to moderate Low 15

17 Procurement Options for LLINs Open Tender Competitive Bidding International Competitive Bidding (ICB) Restricted Tender Limited International Competitive Bidding ICB with prequalification Request for quotations Procurement through UN agencies and others 16

18 Benefits of Good Supplier Selection Minimizes the procurement costs Helps ensure that the LLINs procured meet the desired quality standards Helps ensure that suppliers are reliable and will deliver the specified quantity and quality within the expected delivery period 17

19 Supplier Qualification Prequalification WHOPES Phase II prequalified Develop a list of potential suppliers in accordance with set criteria Only selected suppliers may participate in the tender Post-qualification All eligible and interested bidders may participate in the tender Offers are reviewed in accordance with set criteria 18

20 Prequalification Pros Affords opportunity for a more-thorough evaluation of potential suppliers Creates potential to develop relationships with a small number of reliable suppliers Eases monitoring performance of suppliers Involves shorter procurement lead times Cons Involves a long initial assessment (but only done once) Relies on a limited pool of suppliers May lead to protection of favored suppliers Note: For LLINs there are currently only a limited number of suppliers so last two points of cons may not apply 19

21 WHOPES Prequalification Process for LLINs Phase and type of studies Phase I Laboratory Regeneration of insecticide and wash resistance Efficacy Phase II minimum recommendation for procurement Small-scale field trials Wash resistance Efficacy and impact on vector behavior Safety observations Phase III Large-scale field trials Long-lasting efficacy Community acceptance Safety observations 20

22 Supplier Selection Criteria Availability in quantities needed Type of net and WHOPES recommended insecticide Quality Terms of payment Terms of delivery Supplier reliability Lead times for delivery Ability for flexible delivery schedule WHOPES prequalification status (Phase II minimum) Price (compare like with like) Ability to customize packaging (may lead to longer lead times) 21

23 Note The price of LLINs vary according to technical specifications, quantity, point of delivery, additional requirements, such as size, shape, color and special packaging There is a substantial difference in shipping costs among types of LLINs. The different materials used in the manufacture of LLINs may result in different volumes and weight that may have a significant impact on the total cost of shipment: Request for information on LLIN shipping volume and weight during the procurement process and budget for sufficient resources to manage the LLIN supply chain 22

24 WHO recommended LLINs There are currently 8 WHOPES manufactured nets manufactured by 6 suppliers Source: 23

25 Product Specifications Ensure that all manufacturers of WHOPES recommended LLINs are eligible to bid and/or participate in the procurement process Specifications should contain information on the insecticide, netting material, net design and packaging 24

26 LLIN Specifications 25

27 LLIN Specifications Insecticide: Name of active ingredient How the identity of the insecticide will be verified Content of active ingredient Initial surface concentration of active ingredient method, as specified by WHO/WHOPES Release index of active ingredient (describe verification method to be applied) Stability at elevated temperate (describe method to be applied) Specify the minimum number of standard WHO washes under laboratory conditions that the LLIN is expected to retain its biological activity (e.g., 20 standard WHO washes) Specify the minimum period under field conditions that the LLIN is expected to retain its biological activity (e.g., three years) 26

28 LLIN Specifications (2) Net design Net type (e.g., rectangular, conical, single net, double net) Net size including inaccuracy tolerance (in cm) Net weight (in g/m2) Door (if any) Net borders (e.g., stitched or hemmed) Describe reinforcement points Suspension of nets (e.g., aluminum rings, non-rusting rings, or reinforced netting loops) Describe hanging hooks 27

29 LLIN Specifications (3) Net packaging Specify how each individual net should be packaged (e.g., in plastic bags) It may be useful to include a drawing of the mosquito net including dimensions, door(s), reinforcement points, etc The packaging and labeling components should meet specifications suitable for distribution, storage, and use in a climate similar to that prevailing in the country of the Purchaser. All packaging must be properly sealed and tamper-proof. The Purchaser should specify any additional special requirements e.g. packaging inserts in local language 28

30 LLIN Specifications (4) Labeling instructions: the nets should have labels containing the following information: Size in cm (L, W, H) Water absorption in ml per net Five ISO 3758 pictograms Washing 30 C No bleaching No drying machine No ironing No dry cleaning Below pictograms the following text: Gentle wash. No bleach. No ironing. No dry cleaning. No tumble. 29

31 LLIN Specifications Additionally, the labels for LLINs should include: Name of insecticide manufacturer Name of insecticide used Name of insecticide formulation Dose in mg of active ingredient per m2 Date of treatment Instructions not to leave the net in the sun The outer case or carton should also display the information mentioned under labeling 30

32 LLIN Specifications All cases should prominently indicate the following: Purchaser s line and code numbers The name of the product Quantity per bale Special instructions for storage Name and address of manufacture Any additional cautionary statements The purchaser should include if an imprinted logo is required (depending on the quantity). The design of this should be indicated at the time of bidding The purchaser should specify whether a sample of the mosquito net or sewing thread should be submitted The supplier will also be required to provide the purchaser with access to its manufacturing facilities to inspect compliance with the GMP requirements and quality control mechanisms 31

33 Monitoring of Suppliers Monitor contract performance Monitor shipment authorizations and timelines Monitor customs clearance and delivery Perform product performance monitoring Establish and maintain supplier history form Release performance security 32

34 Customs Clearance and Distribution Taxes and tariffs: review country policy and ensure appropriate exemptions Ensure appropriate documentation with respect to exemptions and waivers is available for customs clearance Ensure appropriate storage before distribution begins Routine distribution Health facilities Ante-natal care facilities CHWs Private sector Other Mass/campaign distribution EPI, vitamin A, de-worming 33

35 Common Challenges in Procurement of LLINs Absence of a comprehensive procurement policy Inadequate rules, regulations, and structures Staff with little experience and training Government funding that is insufficient and/or released at irregular intervals/delays in Global Fund disbursements Donor agencies (GF, PMI, Booster) with differing procurement regulations Coordination of the various procurements (related to above) Fragmented procurement at provincial or district levels (for routine distribution) Delays in bid evaluation 34

36 Common Challenges in Procurement of LLINs (2) Corruption and lack of transparency: tailoring tenders to one supplier Storage capacity: LLINs are bulky Poor records, inventory control Poor capacity for inspection at ports Lack of effective monitoring of use Poor planning: incomplete documentation, procurement lead time Emphasis on mass distribution/campaigns leading to neglect of routine supply Poor information on age of nets in the community: for replacement Safe management of nets Delayed delivery and lack of consequences or fines 35

37 Overcoming Challenges Plan, plan, plan Involve relevant stakeholders early in the process Depending on destination, delivery time can be over three months Allow for a procurement lead time of 5-6 months Ensure funds are on hand Global Fund: If an LLIN is specified in the grant, then a WHOPESrecommended LN must be procured. LLINs should be WHOPES recommended to ensure quality Plan carefully and well in advance for procurement to synchronize arrival with distribution Consider consequences or fines for delayed delivery 36