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1 Purchase procedure is one of the important task of

procurement of any material. Discuss in detail the

purchase procedure of a colour Doppler machine for a 500
bedded hospital.



• To maintain uninterrupted flow of materials to support the
development schedules.
• To procure materials economically at a cost consistent with
the quality and service required. However, generally all
purchases may be attempted at the lowest cost.
• To provide the necessary expertise, advice, information to
the Curators and Education Officers with regard to the best
quality of material available in the market, supplier’s
capability and performance etc.
• To develop and maintain good buyer-seller relationship.
• To promote source development.
• To maintain NCSM’s reputation and credibility in the market
by fair dealings and prompt payments.
The main functions of the Purchase Department are defined
as follows:
• Procurement of stores through indigenous and foreign
sources as required in accordance with the rules in force.
• Checking of requisitions/purchase indents.
• Selection of suppliers for issue of enquiries.
• Issuing enquiries/tenders and obtaining quotations.
• Analysing quotations and bids etc., and preparation of
comparative statement (quotation charts).
• Consultation with the Indentor for selection and approval of
quotations and with Accounts Officer for pre-audit.
• Negotiating contracts.
• Checking legal conditions of contracts. Consulting
Administrative Officer or Secretary, NCSM – where
• Issue of Purchase Orders.
• Follow-up of purchase orders for delivery in due time
• Verification and passing of suppliers’ bills to see that
payments are made promptly.
• Correspondence and dealing with suppliers, carriers etc.,
regarding shortages, rejections etc., reported by the Stores
• Maintenance of purchase records.
• Maintenance of progressive expenditure statement, sub-
head wise.
• Maintenance of vendor performance records/data.
• Arrangement for Insurance Surveys, as and when necessary.
• Clearance of foreign consignments.
• Keeping various Departments/Divisions informed of the
progress of their indents in case of delay in obtaining
• Serving as an information center on the materials’
knowledge i.e. their prices, source of supply, specification
and other allied matters.
• Development of reliable and alternate sources of supply.

• It shall be particularly ensured:

(a) that all purchase are made against properly authorized

requisitions, and valid sanctions, showing the correct and detailed
(b) that all the materials requisitioned are duly ordered from the
right source after full enquiries on most competitive price taking
into account the trade discounts and tax benefits etc.
(c ) that the right quantity of the goods consistent with the quality
and the specification required is bought.
(d) that the deliveries of all goods are received within the
stipulated period.
(e) that claims due to shortages or any other discrepancies are
settled promptly.
(f) that cordial and harmonious relations with all sections/divisions
are maintained for becoming an efficient service unit in the
• While receiving the planned requirement of the indentors, it
should be prevailed upon the Indentors to certify clearly that
the quantities indicated are definitely required for the
project and specify the period within which the quantities
indented will be consumed. It is the duty of the purchase
section to check purchase indents against needs and
suggest modification of quantities wherever necessary.

Steps in the Purchasing Process

The general pattern for handling purchase orders is as follows:
1. A department initiates a request for goods or services and
sends it to the Purchasing Department.
2. Purchasing staff verifies that the specifications are complete
and selects potential sources.
3. Purchasing staff follows good business practices in
determining the best offer for required materials or services.
We review quotations based upon:
○ unit costs and total costs;
○ completeness of the order and adherence to the
specifications listed;
○ delivery costs;
○ delivery time; and
○ warranties, maintenance, installation, etc., e.g., service.
4. When we award an order, we will FAX or mail an IU purchase
order form containing a purchase order number to place an
order. In some circumstances, we may telephone in an order
with a purchase order number.
5. You must send an invoice with the purchase order number
noted on the invoice to the IU Accounts Payable Department
before a payment can be made.
Selection of Suppliers
The Purchasing Department staff is responsible for the selection
of reputable, dependable suppliers. If you have not dealt
previously with IU, you should write or phone the purchasing
contract manager who makes purchases in the your commodity
area. New as well as established suppliers should offer
competitive prices and continue to act in good faith as far as
delivery, adjustments, and other services are concerned. IU tries
to retain the good will of all suppliers by dealing fairly with them
at all times.

Please keep in mind that suppliers are selected two times during
the purchasing process:
• to receive the request for quotation; and
• to receive the award of the order.
If you were not one of the suppliers who received a request for
quotation, you will not be one of the suppliers considered for the
award of the order. Therefore, much of your efforts should first be
directed toward getting your company's name on the quotation
lists for your commodities. Please keep in mind that Indiana
University is committed to providing minority suppliers every
opportunity to compete for its business, but you must be
Occasionally, we must seek professional services from suppliers in
developing specifications for equipment and materials. As a
general practice, if you quote a substitute or alternate goods or
services, you should clearly note the change and provide
documentation. If you have a question about this issue, please
call the purchasing contract manager before submitting your
Requests for Quotations (Price Requests)
In many instances, after we have verified the specifications,
requests for quotations (RFQ) or price requests will be sent to a
number of competent suppliers. These requests should be
completed, signed, and returned as indicated on the price request
form. IU considers the pricing information to be binding. You
should review the information above under General Information
while you are preparing your quotation. Please remember: if you
do not submit your response to these requests, you cannot
receive orders from IU.
A signed purchase order (PO), an automatic purchase order (APO)
[both generate a purchase order number], and a procurement
card are the only methods of purchase that obligates IU for
payment. When an emergency arises, a purchasing contract
manager may use the telephone or other means of transmission
to place an order. However, a purchase order number is always
assigned. You should not accept requests for goods or services
without a purchase order number or a valid University credit card.
No other method of purchase obligates Indiana University for
If you participated in the quotation process but you did not win
the order award, you should make an appointment to see the
appropriate purchasing contract manager. This will give you:
• information on how your competitors priced their commodities;
• information about how you can be more competitive on the next
quotation; and
• a basis upon which to begin talking to the departments and the
purchasing contract managers about your goods and services.
A company invoice referencing the Indiana University purchase
order number must be submitted to the Accounts Payable
department before payment can be made.
Correspondence Involving Purchase Orders
All correspondence involving purchase orders should be
channeled through the Purchasing Department. If you correspond
with a person in a department, you should send the appropriate
purchasing contract manager a copy of the letter. This is also true
about FAXes, telephone calls or emails. Since only Purchasing
Personnel are authorized to modify purchase orders, it may be
impossible to audit and approve invoices for payment without
complete records

Colour Doppler Machine :-

A colour Doppler machine (the same ultrasound machine used to
evaluate the fetus in pregnant women) is a device which can be
used to measure blood flow velocities within the cervical carotid
arteries, as well as the vertebral arteries and sometimes the
subclavian arteries by means of non-invasive ultrasonic scanning
in which the Doppler effect is utilized. This can be useful for
estimating the effects of atherosclerotic disease on the lumen in
late stages; specifically the level of compromise in blood flow
caused by reduction in arterial lumen diameter.

Using B-mode scanning (imaging) and very careful technique, the

same ultrasound machine can also be used to measure the
arterial wall thickening within segments of the carotid arteries
non-invasively. This can be useful for detecting and tracking
atherosclerotic disease in early stages. This has been used in
clinical research since the early 1990s and is occasionally used by
some clinicians.

All these machines have high frequency probes used specifically

for the purpose of imaging arteries and veins in full details and
they also are equipped with color Doppler, pulsed wave and
continuous wave Doppler scans and collectively give good
information about disease status of these arteries and veins.

Following steps to be followed for purchase of a

machine :-

• Notice inviting Tender (NIT)

• General Instructions to Tenderers (GIT)
• Special Instructions to Tenderers (SIT)
• General Conditions of Contract (GCC)
• Special Conditions of Contract (SCC)
• List of Requirements
• Technical Specifications
• Quality Control Requirements
• Qualification Criteria
• Tender Form
• Price Schedules
• Questionnaire
• Bank Guarantee Form for EMD
• Manufacturer’s Authorization Form
• Bank Guarantee Form for Performance Security /CMC
• Contract Form (A & B)
• Proforma of Consignee Receipt Certificate
• Proforma of Final Acceptance Certificate by the Consignee
• Proforma for Bank Guarantee for 90 %
• Instructions from Ministry of Shipping/Surface Transport
• Check List (General &Technical)
• Consignee List
• Inspection Authority &Special Test Detail
• Custom Duty Exemption Certificate

About 50 per cent of revenue is taken by materials management

department alone. HIS, centralized purchasing, better vendor
management and sub stores analysis are helping the hospitals in
streamlining this crucial area. Materials are said to be a major
cost factor in any enterprise and in hospitals about 35- 40 per
cent of the budgetary allocation is for procurement and
management of materials.

Hospital management encompasses all the supporting services

wherein materials management is a significant aspect as it is
required to plan and control the flow of material in the hospital.

Purely in terms of managing materials, the hospital faces many

challenges. Firstly, the materials department has to maintain a
fine balance between stocking materials, so that it is neither over-
stocked or vice-versa. "You have to be extremely careful. It is a
challenge for any hospital to adjust the storage of consumables to
avoid lack of material and overstocking because overstocking
leads to likelihood of expired stocks. The materials that are
generally overstocked are emergency medicines and
consumables and materials that are not always readily available.
The healthcare industry is a critical care sector and hence all
medicines/ consumables need to be available round- the-clock for
its smooth functioning. You should be able to manage the
inventory with 'magic numbers.' It should not be less and at the
same time you should not overstock," states an industry expert.

To overcome the challenges most material managers practice

innovative strategies to optimise materials utilisation.

Modernising Materials Management include

• Centralised purchasing to avoid duplication of goods,

• Group and Bulk purchasing for volume discounts and better
• Multi vendor management is common to manage the
inconsistent demant,
• Consumption analysis to minimize stock,
• Direct purchase from manufacturers,
• Just in time purchase to manage less stock and appropriate
• Preference to limited period enquiries over the rate contracts
which normally goes for two years and these give a chance
for greater negotiations and also helps manage the
fluctuating demand. On an average Limited Period Enquiries
saves 20 to 30 per cent on annual expenditure.

Out of the total budget of the hospital, almost 60 per cent is spent
on capital procurement. With the advent of latest technology,
medical equipment has come a long way in assisting healthcare
professionals in diagnosis and standard of the hospitals. Hence,
the purchase, maintenance and replacement of medical
equipment are an essential and integral part of hospital
management. Right from the budgeting stage to execution level
for the purchase of equipment, a hospital carefully analyses its
decision, taking into account several factors like the necessity,
utility, pricing and so on. The decision is taken in consultation
with user heads with a team of biomedical engineers, materials
heads, medical professionals, top management officials and so
on. The warranties, technology, branding, training, IT, technical
parameter, upgradation options and integrations are the major
parameters in selection.

Purchase procedure of Colour Doppler Machine :

For the purchase of colour Doppler machine we should focus

the attention on common elements related to procurement and
maintenance of the machine so as to optimise the limited
resources. First most important step is to estimate the
requirement of machine in a realistic way based on the patient
load needing the equipment. The need of the machine would be
directly related to load of inpatient and outpatient and should be
based on budget plan of the institution keeping in mind the cost
of the maintenance

The demand of equipment received from the Radiology

department is put up to the duly constituted screening committee
for justification of procurement. Only after the approval of the
screening committee, we can be proceed for procurement.

Purchase officer asks for Quotations and brouchers of Colour

Doppler Machine from various suppliers. The Cofiguration decided
by Radiologists and Biomedical Engineers. They go through the
brochures and and discuss with management persons to decide
the model and make of the machine which is meeting with their
requirements. After deciding the specific Model, the quotations of
same model are compared. Not only price but also different
aspects like Warranty period, Guarantee period, After sale service
arrangement etc. are compared
Purchase officer call the Company persons to discuss with them
about their policies of Customur service. The contract for
purchase is issued only after Complete Satisfaction and the
recommendations of the Surgical Equipment Purchase Committee
and approval of the competent authority.

After agreement and fulfillment of payment conditions Company

give delivery of the Machine. Installation and Demonstration done
under Supervision of Biomedical Engineers only.