SAURABH BANERJEE

Procurement
Procurement is the process of acquiring goods,
services and works

The art and the science of making sure we have-

• Enough RESOURCES and we go to committee ON
TIME to BUY the RIGHT QUANTITY of QUALITY
GOODS at the most ECONOMICAL COST so we can
supply our customers in TIME
3
•Procurement is the process of
obtaining goods and services from
preparation and processing of a
requisition through to receipt and
approval of the invoice for payment.
•Steps in the
procurement
process
 Activity
List to be used to fill in the blanks of the procurement process

1. Supplier
2. Purchase order
3. Contract approval
4. Pre-shipment inspections
5. Solicitation process
6. Market research
7. Need defined
8. Budget identified
9. Goods received
10.Create /check specifications or TOR
11.Delivery
12.Disposal operations
13.Warehousing
6
Activity 2 – Fill in the blank spaces against each step from the list provided

12
1
11 2
13

10 3
THE
PROCUREMENT
PROCESS

9 4

8 5

7 6 7
 1.
DISPOSAL NEED
OPERATIONS 11. ActivityIDENTIFIED
2 –Solution 2.
GOODS MARKET
RECEIVED RESEARCH
WAREHOUSING

10. 3
DELIVERY BUDGET IDENTIFIED

THE
4.
9. PROCUREMENT
CREATE/CHECK SPECIFICATIONS
PRESHIPMENT PROCESS OR TOR
INSPECTION
Tender formulation

5.
8. SOLICITATION
SUPPLIER PROCESS

7. 6.
PURCHASE CONTRACT
ORDER APPROVAL

8
 Activity 2 –Solution

1. 2.
DISPOSAL
OPERATIONS NEED IDENTIFIED MARKET RESEARCH
11. Goods or services National/International
Quantities purchase
GOODS RECEIVED
WAREHOUSING Which suppliers must be
Document the When required
reached
damaged goods

10.DELIVERY 3
Packing list BUDGET IDENTIFIED
COA Secure the budget
Bill of landing Pre-encumber (reserve )
the budget
THE 4.
CREATE/CHECK SPECIFICATIONS OR TOR
9. PRESHIPMENT PROCUREMENT Tender formulation
INSPECTION
PROCESS Clear
Regulatory requirement
Generic
TOR/SPECIFICATIONS SHOULD BE CLEAR
5. SOLICITATION PROCESS
8. SUPPLIER
National/International
Confirm the receipt of purchase order in writing
Financial thresholds
Bid evaluation
7. PURCHASE ORDER-
6.
Supported by contract, TOR, work plan , payment
schedule CONTRACT APPROVAL 9
•NEED IDENTIFIED
1.Goods or services
2.Quantities
3.When required
Private hospitals

•Policy for procurement of

drugs and equipment's
 •MARKET RESEARCH
2. •National/International
purchase
3. BUDGET
IDENTIFIED
•3

•BUDGET IDENTIFIED
•Secure the budget
•Pre-encumber (reserve ) the
budget
CREATE/CHECK SPECIFICATIONS Formulating tender
OR TOR
Tender
Tender
• https://archive.aiimsbhopal.edu.in/tender/RC%20for%20Oral%20Dru
gs.pdf
• https://aiimsbhopal.edu.in/index_controller/manualTender
Components of the tender

Tender

Technical Financial
Technical tender

•CREATE/CHECK SPECIFICATIONS OR TOR

1. Clear
2. Generic
3. SPECIFICATIONS SHOULD BE CLEAR
Technical tender

•Dosage form- Tablet ( Normal, SR, MD)

•Strength
•Color
•Shape
•Packing
•Expiry duration
•Language
•As part of the bid, quality assurance
specifications should also be clearly written,
identifying all documents that the purchaser
will require from the supplier—including
•Certificate of Analysis
•Regulatory certificates.
•5. SOLICITATION
PROCESS
5. SOLICITATION PROCESS

•Float the tender – e tenders

•Invite the bids
•Bid evaluation
 Technical bid weighting
of a manufacture
Bid evaluation supplying drugs to NH

Certifications 10%
Bid evaluation
Technical 30%
capacity
Relevant 10%
experience
Prepare evaluation
Evaluate the Previous 5%
criteria before you
technical first performance
start evaluation
References 5%
Total for 60%
technical
weighing 37
Things which can be done to make the process
fair when you receive offers from the suppliers
Receiving
Ask for financial and technical bids in separate envelop
bids

Receiving
Disqualify the late bids
bids

Receiving
Disqualify the incomplete bids
bids

Receiving
Make the vendors aware of your process
bids
38
Things which can be done to make the process
fair when you receive offers from the suppliers
Receiving
Ask for financial and technical bids in separate envelop
bids

Receiving
Disqualify the late bids
bids

Receiving
Disqualify the incomplete bids
bids

Receiving
Make the vendors aware of your process
bids
39
•The objective is to reach a broad
range of interested suppliers to
ensure that the selection
process is as fair and
competitive as possible.
• The following are general guidelines for reviewing bids
that meet the minimum requirements:
1. Evaluate all bids or proposals by the same criteria to
ensure equity, impartiality, and transparency.
2. Bids must match the requirements included in the
bid documents at the time the bid was released.
3. Reject and do not evaluate bids and proposals that
do not qualify.
•Evaluate the financial bid for
the suppliers who qualify the
technical criteria's
 Bid evaluation
Earnest Money Deposit:
• The bidder shall be required to submit the Earnest Money Deposit
(EMD) of an amount of Rs. 10,000/-(Rupees Ten Thousand) for
each item of any category of the Items given in the tender by the
way of Demand Draft/Banker’s Cheque/FDR/Bank Guarantee
and must be valid for Six Months in favour of “Director, AIIMS
Bhopal
• (TENDERS NOT ACCOMPANIED WITH EMD AND TENDER FEES
ALONGWITH THE TECHNICAL BID SHALL BE SUMMARILY
REJECTED).
Earnest payment
• Description
• An earnest payment is a specific form of security
deposit made in some major transactions such as
real estate dealings or required by some official
procurement processes to demonstrate that the
applicant is serious and willing to demonstrate
an earnest of good faith about wanting to
complete the transaction.
•6. CONTRACT APPROVAL
• Award contract
• The contract is the outcome of the bidding
process; it is the document that will legally bind
the purchaser and supplier to an agreed-upon
set of product specifications, delivery
requirements, performance and payment
obligations of both parties, and legal recourse in
the case of non-compliance on either side.
1. Determining payment methods is an
important part of the contracting process.
2. Time
3. To avoid delays in receiving supplies, you
must complete payment arrangements as
soon as possible after the contract is
finalized.
7. PURCHASE ORDER-
 PURCHASE ORDER

•A purchase order (PO) is a commercial

document and first official offer issued by a
buyer to a seller, indicating types, quantities,
and agreed prices for products or services.
•It is used to control the purchasing of products
and services from external suppliers.
•Supported by contract, TOR,
work plan , payment
schedule
 Confirm the
receipt of
8. SUPPLIER
purchase order in
writing
•9. PRESHIPMENT
INSPECTION
•10.DELIVERY
•Packing list
•COA
•Delivery challan
 Delivery
• The last step in the procurement process is to ensure
delivery and receipt of the goods at the required
destination.
• For international shipments, this includes the
shipment of goods from the supplier’s warehouse,
through the port of entry, clearance through customs,
receipt and inspection at the designated place of
delivery, and resolution of any insurance or damage
claims.
•Customs requirements should be
clarified with the national agency, and
shared with the supplier, before the
shipment is sent, so that all
documentation can be provided to the
purchaser in a reasonable time.
•GOODS RECEIVED
•Document the damaged
goods
Video
•Four strategic objectives
of pharmaceutical
procurement in hospitals
•1. Procure the most cost-
effective drugs in the right
quantities
• 1. Procure the most cost-effective drugs in the right
quantities
• The first strategic objective is that all organizations
responsible for procurement, whether they are public,
private non-profit or private for-profit, should develop a
hospital formulary to make sure that only the most cost-
effective drugs are purchased.
• Procedures must also be in place that accurately estimate
procurement quantities in order to ensure continuous
access to the products selected without accumulating
excess stock.
•2. Select reliable suppliers of
high-quality products
• 2. Select reliable suppliers of high-quality
products
• The second objective is that reliable suppliers of
high-quality products must be (pre-)selected,
and that active quality assurance programmes
involving both surveillance and testing must be
implemented
•Identifying the right supplier is one of
the important responsibilities of the
purchase department.
•A good supplier should be technically
and financially competent for
undertaking the supply of a product.
Accordingly the purchaser looks for the following
criteria for selecting capable suppliers :
• (a) Financial Capacity

• (b) Manufacturing Capacity

• (c) Business assets

• (d) Quality of products

• (e) Business reputation in market

•3. Ensure timely delivery
•The third strategic objective is that the
procurement and distribution systems must
ensure timely delivery of appropriate
quantities to hospitals
•4. Achieve the lowest
possible total cost
4. Achieve the lowest possible total cost
• The fourth objective is that the procurement and distribution systems
must achieve the lowest possible total cost, considering four main
components:
1. the actual purchase price of drugs;
2. hidden costs due to poor product quality, poor supplier
performance or short shelf-life;
3. inventory holding costs at various levels of the supply system; and
4. operating costs and capital loss by management and administration
of the procurement and distribution system.
•Procurement of drugs for
OPD Pharmacy of a hospital
• Thanks