Optimizing PSM PerformancePriorities for Procurement Support Services for Malawi

The Global Fund Strategy on PHPM

Realizing Health Millennium Development Goals

Channeling resources of donors, stakeholders and partners

Funding high impact country programs on the 3 diseases

Increasing access to Pharmaceuticals & Health products

Be a significant contributor to making progress towards the MDG

Mobilize and intensify the international response to three global diseases

Be an effective and efficient mechanism for flow of resources Operate as financing institution

Build on a country-driven approach to ensure long-term sustainable success

Be the driver of integrated approaches covering the 3 diseases and cross-cutting efforts, balancing needs of different regions, diseases and interventions

Prevention, diagnosis, treatment and management ARVs, ACTs, other medicines, laboratory equipment and

supplies, test kits, condoms, LLINs

This translates into an overall aspiration to be a unique catalyst in the global arena to fight HIV/AIDS, tuberculosis and malaria

Donors and other stakeholders

Global Fund

Public and Private Partners

Highest

quality

Programs

Affected societies and

individuals in greatest need

Link funding and ambitions of donors and stakeholders with experiences and knowledge of partners to support high quality programs that reach those in greatest need

Board Approved a Specific VPP and Capacity Building Services Model, now being Implemented by Secretariat

VPP:PR participation

• Voluntary except for PRs that have inadequate capacity to procure

Use of agents

• Be operated by one or more procurement service agents (PSA) selected in a tender

Direct payment

• Require participants to allow the GF trustee to make direct payments

Capacity building: PR participation

• Voluntary or based on LFA assessment of PSM capacity

Use of Agents• Provided by

CBS/SCMA providers contracted for the purpose

VPP:PR participation

• Voluntary except for PRs that have inadequate capacity to procure

Use of agents

• Be operated by one or more procurement service agents (PSA) selected in a tender

Direct payment

• Require participants to allow the GF trustee to make direct payments

Capacity building: PR participation

• Voluntary or based on LFA assessment of PSM capacity

Use of Agents• Provided by

CBS/SCMA providers contracted for the purpose

Participating PRs

Consulting /TA agencies

Fund portfolio

manager

Procurement team

The Global Fund

”PQR”

TGF Secretariat

Data input

Pooled orders

Coordinated CBS/SCMSA

Procurement agent(s)*

TGF PRs

TGF designated VPP Agent

TA Services

VPP Orders / Information

TGF designated CBS Agent

Manage Agent/ Service Providers on behalf of PRs

CBS/SCMA Providers

Suppliers/ Manufacturers

• VPP Pools PRs orders • CBS/SCMA Coordinates Services Delivery

Case Studies

Why is Procurement and Supply Chain Management (PSM) important?

• Approximately 45% of grant funds are budgeted for the procurement of medicines and health commodities

• Challenges / bottlenecks on PHPM impact on grant implementation and performance

Access to Pharmaceuticals and Health Products – strategic role in meeting Health MDGs

Meeting health targets and scaling up

Bottlenecks and Challenges in Access to Pharmaceuticals and Health Products

System

Process

Infrastructure / Human Resource

Forecasting / Quantification

Pricing

Policies & systems

Product Selection

Quality Assurance

systems / Quality Control Policy

compliance

PROCUREMENT QUALITY MANAGEMENT

Inadequate PSM Plans

Management Information Systems

Distribution

Inventory management

A c c e s s

Malawi PSM Challenges

• The quality of forecasting => procurement planning and implementation are inadequate

• Stock outs of test kits, ARVs and ACTs => several calls for emergency procurements

• Central Medical Stores does not have a reliable inventory management system => Distribution/delivery problems of test kits and OI drugs

• Inadequate Stores management and record keeping at health facilities

• Storage and inventory management of ART has gradually declined as treatment centres have been added

• Other commodities, which pass through Central Medical Stores, have suffered from inadequate storage arrangements and inventory management

Proposed Interventions: Product Acquisition: Use Procurement Agent while Building CMS Capacity

• Outsource Procurement Services to External Agent, e.g VPP

• CBS of CMS in GF, international and national procurement standards

• External Procurement Agent identified and appointed

• Staff capacity assessed

• Training Curriculum developed

• Job descriptions and reward level updated

• SOPs developed

• Procurement Procedures and processes revised

• MOU with other agencies developed

CBS Interventions Deliverables

Results:

Procurement of Products optimized

CMS capacity for procurement increased,

Mechanism for staff retention indentified/implemented

Proposed Interventions: Delivery - Optimization of CMS Storage and Distribution Services

• Build capacity of CMS to out-source and manage service contract for commodity storage and distribution

• MOU with Partners developed• Staff capacity assessed• Key Staff Identified• Job descriptions updated• Services and standards

defined• Tenders for service providers

conducted• Contracts signed and

implemented

CBS Interventions Deliverables

Results:

Capacity of CMS for service delivery Increased,

CMS capacity for procurement of services increased

CMS capacity for management of Storage and Distributions service levels increased

Proposed Interventions: Planning - LMIS and Inventory Management

• Inventory Management and LMIS Review, redesign and implementation

• Description of LMIS challenges• Agreed design, • New/revised LMIS SOPs, • Tools and Trained operators of

LMIS, within DHOs and HFs• Improved health commodity

supply data recording and reporting roll out

CBS Interventions Deliverables

Results: Visibility of Supply Chain, Sound basis for quantification and programme planning

Proposed Interventions: Planning - Quantification and Forecasting

• Systematic Quantification and forecasting, with priority focus on Malaria

• Quantification assumptions agreed,

• Quantification completed,• Procurement plan prepared, • Pipeline monitoring system

installed/employed

CBS Interventions Deliverables

Results: early warning system => Reduced stock wastage or stock outs, procurement achieving optimum stocking (min/max stock levels)

Proposed Mobilization Timeline

ActivityResponsible

Planned time to complete

Preparation of Work Order Proposal Requests Global Fund July 30

Circulation of Work Order Request to pre-selected and appropriate partners, and/or IQC holders/ CBS/SCMA providers

Global Fund Aug 15

Work Order Proposal Submission to the Global Fund TA Providers Sept 15

The Global Fund review of Work Order Proposals Global Fund Sept 30

CCMs/PRs review of Work Proposals and selection CBS/SCMA providers and award to providers

PRs Oct 15

CBS/SCMA Planning Workshop Global Fund, CCM, PRs, TA Providers, Partners

Oct 30

Global Fund facilitates formal contracting between PR and CBS/SCMA provider for services

Global Fund Nov 15

Fielding and implementation of TA by CBS/SCMA providers TA Providers Dec 1

Monitoring and Evaluation of services by the Global Fund and Partners throughout the implementation process

Global Fund, PRs, Partners

Extra Slides

Meeting the Health MDG

Access to Pharmaceuticals

and Health Products

Addressing challenges / bottlenecks

Pharmaceutical Systems Effective/ Efficient

Identifying gaps / challenges / bottlenecks

Ensuring adequate investments (Health System Strengthening)

Coordinated approach

Meeting Targets /

Scaling Up

Allocation of PSM Functions

DemandCreation

SupplierAgreements

FinancingReceipt, Storage,

Distribution

Forecasting

QualityAssurance

EffectiveUse

ProductProcurement

ProductSelection

Monitoring

Acquisition

PlanningDelivery

MOH

CMS &AGENTS

CMS

Global Fund Procurement Support Services Strategies

Pooled procurement

Information sharing and using internally

Forecast sharing externally

Competition fostering

Strategy MechanismDescription

Contracting with one or more external procurement agent(s) to offer comprehensive procurement services to recipients

Collecting information on recipients’ procurement activities and strategically sharing and using it to enable better market outcomes

Aggregating demand forecasts from recipients and sharing them strategically with selected external entities to achieve positive market outcomes for recipients

Supporting the increase in number of suppliers

PFSCM PSI

PQR Country Profile and

PSM Plans

Country Profile and PSM Plans

Supplier Meetings Funding Availability Direct Payment ITBs

VPP Procurement Principles

• Main Objective• Resolve procurement bottlenecks & contribute to improved grant

implementation and performance.

1. Simplify the procurement process but maintain transparency and competition

2. Ensure compliance with GF Quality Assurance Policy

3. Establish procurement methods for each product category reflecting market situation

4. Reduce the timelines for procurement process

5. Ensure globally accepted prices

6. Facilitate timely payments

7. Ensure timely deliveries of health products

VPP Enrollment and Participation - April 2010

37

1

20

1

68

1

41

6

0

10

20

30

40

50

60

70

80

Confirmed participation Declined participation Preliminarydiscussions ongoing

Waiting for decision

Countries Grants

Capacity Building ServicesAddressing Systems and Building Capacity

Nigeria – Budget $9m– Review and re-design of LMIS– Store assessment and upgrading/renovation to standard– Transport system design– Quantification and procurement planning

Gambia – Budget $400,000– Orientation of PR PSM units and organisational capacity building– Store assessment and upgrading/renovation to standard– Quantification and procurement planning– Improvement of LMIS – Quality Assurance procedures

Liberia – Budget $ 1.5m– PSM Organization and Coordination (Master Plan development )– MOHSW leadership capacity building– Legal Framework, QA– Partner Coordination