Overview of the Global Fund Procurement and Supply Management Issues Workshop for LAC Consultants th 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 I PROCUREMENT 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)

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)

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 II PROCUREMENT 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 Starts TGF disburses funds to Principal Recipient (PR) Patient receives drugs PR receives and checks drugs PR prepares PSM Plan specifying health products and quantities to order Indicate VPP participation Plan is submitted to TGF/LFA for assessment and approval PR launches procurement process PR reconciles needs and funds available PR evaluates bids and awards supply contract PR places order for drugs and monitors order status PR makes payment PR distributes 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