PROCUREMENT IN THE RHA’S TO COME SOON…

The House of Representatives will soon begin debate on The Regional Health Authorities (Amendment) Bill, 2011.

The full text of the Bill is available in PDF format on this website, you can download it via this link . You may also place your comments directly on this Bill page, which can be accessed here.

The following is a brief explanation of some aspects of the Bill

What is procurement?

Procurement can be defined as the process of purchasing goods, works or services at the most economical total cost, while adhering to any specific requirements. Public Procurement is the process of acquiring goods, works or services using public money to accomplish a specified public purpose.

The Procurement process is optimized for benefit of the authority, supplier, or individuals and is usually secured by signing a contract.

Procedure involved in procurement

Procurement procedures can differ depending on the type of product or service being procured.
Usually there are some distinct phases in the whole procedure:

Project/Service/Supply preparation/maturity period, sometimes including a Prior Information Notice
Call for bids or Request for proposals
Request for information, prior to bid
Bid delivery
Evaluation of the bid (awarding procedure)
Contract award

Advantages of Procurement

Reducing costs

Costs can be reduced by leveraging volume, having structured supplier relationships and by using system improvements to reduce external spend while improving quality and supplier performance.

Visibility of spend

Centralized tracking of transactions enables full reporting on requisitions, items purchased, orders processes and payments made.

Productivity

Internal customers can obtain the items they want from a catalogue of approved items through an on-line requisition and ordering system. Procurement staff can be released from processing orders and handling low value transactions to concentrate on strategic sourcing and improving supplier relationships.

Controls

Standardized approval processes and formal workflows ensure that the correct level of authorization is applied to each transaction and that spend is directed to draw off existing contracts. Compliance to policy is improved as users can quickly locate products and services from preferred suppliers and are unable to create maverick purchases.

Disadvantages of Procurement

The Procurement Process at state owned agencies or companies is usually vulnerable to waste, fraud and corruption due to its complexity, the size of the financial flows it generates and the close interaction between the public and the private sectors.

What are the key features of this proposed legislation?

The Bill will enable the Regional Health Authorities to procure goods or services collectively, where it is economically expedient to do so.

Important issues for consideration:

The Bill gives authority to the Board of the RHA’s to invite, consider, accept or reject offers, and enter into contracts for the supply of goods or services.
The Board of the RHA’s will be capable of collectively procuring goods or services.
Have any steps been taken to ensure that the Regional Health Authorities are adequately staffed by persons properly trained in procurement practices?
Will there be sufficient oversight and monitoring implemented to prevent corrupt practices?