In this section you will learn:
- The requirements for public procurement by the ministry of health
- Five core principles that aim to award a cost-effective contract to a qualified vendor
- The outsourcing questions to address along the functional framework
Guiding principles for the vendor evaluation and selection process
The starting point for any vendor evaluation and selection process is the public procurement law in your country. The requirements and complexity of these laws vary from country to country. Before taking any steps in the vendor evaluation and selection process it is critical that you review the public procurement laws and processes that govern the outsourcing process. After a thorough review, you will need to align yourself with the procurement rules, processes, code of conduct, and selected methods as stipulated by law.
In addition to the public procurement laws and processes in your country, there are five core principles1 to consider throughout the vendor evaluation and selection process:
- Economy: Decisions are justified on the basis of the best value for money underpinned by the need to manage public resources with due diligence to avoid fraud and waste.
- Transparency: Information on the outsourcing process is made available to relevant parties, unless confidential information is justified, assuring confidence among stakeholders.
- Open and effective competition: Public procurement requirements are widely disseminated, where possible, to encourage competition and eliminate bias. Non-competitive procurement methods are justified only under certain conditions
- Ethics and fairness: The outsourcing process is conducted in a fair manner that complies with ethical standards; contracts are awarded objectively not preferentially. Conflicts of interest are recognised
- Accountability and reporting: Parties involved in the outsourcing process are responsible for their plans, actions and outcomes, with public reporting and accountability mechanisms to allow for external scrutiny
Questions to ask before initiating an evaluation process for outsourcing
There are a number of questions to ask at the outset of an evaluation process for outsourcing.
The answers to these questions will be informed by the in-country assessment (see assess) which defines where potential opportunities and/or gaps exist for outsourcing (evaluate).
Strategic questions to ask
These questions speak to how the activity will help you achieve your long-term goals and universal health aims.
- Will the outsourcing of a specific functional area or activity strengthen and improve overall supply chain performance?
- Will outsourcing demonstrate improved health outcomes and the delivery of patient-centred care?
Typical functional framework questions to ask
The questions relate directly to the functional framework and include the five areas:
Demand and supply planning
- Will forecasting and demand management processes be improved through outsourcing?
- Can supply chain services be performed at a reduced cost?
- Can a reduction in wastage and expiry be achieved through outsourcing?
- Will warehousing and inventory management efficiencies be improved?
- Can the availability of medicines for patients be improved in remote and rural areas?
Supply chain strategy design
- Will the supply chain network design be enhanced through effective outsourcing?
VillageReach multi-supplier strategy
Outsourcing can provide governments with access to efficient, reliable services that leverage the private sector’s know-how and existing assets. Partly due to the COVID-19 response, there is an increasing focus on using private sector logistics firms for in-country public health logistics operations, mostly for warehousing and transportation. In addition to competition, using multiple suppliers, through a multi-supplier strategy, can have major benefits. VillageReach has developed this briefing to share learnings on the important topic of multi-supplier strategy based on its work introducing private sector capacity into public health supply chains.