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Medical Device Procurement



Procurement is a vital element of equitable access to health care. It can be defined as “the acquisition of property, plant and/or equipment, goods, works or services through purchase, hire, lease, rental or exchange” and is taken to include “all actions from planning and forecasting, identification of needs, sourcing and solicitation of offers, evaluation of offers, review and award of contracts, contracting and all phases of contract administration until delivery of the goods, the end of a contract, or the useful life of an asset.”. When procurement includes installation and commissioning, the process can be termed “technology incorporation”.

Effective healthcare technology procurement practice leads to safe, equitable and quality

healthcare, and all parties involved enjoy benefits:

• Procurement staff gain by carrying out clear and accountable work done to internationally accepted standards;

• Funding agencies can have confidence in the right goods being procured at the right price;

• Health service professionals gain quality materials and tools;

• Most importantly, patients can receive appropriate and effective healthcare treatment.

To obtain the right product or service, a generic description within a clear specification is required. The other “rights” are defined below.

Right Quality

• The right description and specifications, with the appropriate quality inspections.

• The description, specifications and inspections set the minimum standard acceptable.

• The description or specifications are generic, and are not suited or aligned to one particular firm or group of firms.

• The description or specifications are unambiguous.

• All tender respondents have equal opportunity in obtaining all relevant details.

• Specifi cations avoid stating that items will be procured “as per sample”, to ensure transparency.

Right Price

• Rate estimation or justification is based on tangible factors; for example, last purchased rates,

published maximum retail price, raw material cost, prices of similar or alternative products, or prevalent

industry unit rate price.

• Negotiations or counter offers are rare and, if used, have specific guidelines, criteria and precautions.

The tender system aims to obtain the best possible price, and not an unreasonably low price.

  • Due diligence is exerted to look at all pages of all the offers received, to ensure that any price implications in the offer are identified.
  • Vigilance is maintained, especially in cases of closely competitive tenders and unhealthy, cartel-type situations. Anti-fraud or anti-corruption software is applied when available. Protocols exist for declaring conflict of interest and tracing accountability for all decisions.

Right Quantity

  • Right quantity for procurement is justified, taking into consideration all the stocks available. As many requirements for the same item as possible are consolidated, taking into account the shelf-life of items and the lead time for procurement.
  • No major change to the tendered quantity occurs after submission, because this raises suspicion and creates a lack of transparency.
  • There is vigilance when it is necessary to distribute quantities among more than one tender respondent.

Right Time and Place

  • The right time and place for delivery are specifically and exactly stated in the tender (these have a bearing on the price), and the final accepted offer conforms to these factors.
  • Logistics of issues such as supply and mode of transport are clearly specified.
  • Terms of payment are outlined.

Summary Flow Chart of Standard Procurement Procedures

Summary of Elements in the Medical Device Procurement Process

There are many routes for medical equipment to get into an organisation, including being bought from hospitals funds, donated by charity, rented, patient owned, loaned by a sales person, or brought in on an ambulance stretcher when a patient is transferred from another hospital.