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Original Articles
Open Access

Strategic contracting practices to improve procurement of health commodities

Leslie Arney, Prashant Yadav, Roger Miller and Taylor Wilkerson
Global Health: Science and Practice August 2014, 2(3):295-306; https://doi.org/10.9745/GHSP-D-14-00068
Leslie Arney
aUniversity of Michigan, The William Davidson Institute, Ann Arbor, MI., USA
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  • For correspondence: lesarney@umich.edu
Prashant Yadav
bUniversity of Michigan, The William Davidson Institute, Ross School of Business, and School of Public Health, Ann Arbor, MI., USA
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Roger Miller
cLMI, McLean, VA., USA
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Taylor Wilkerson
cLMI, McLean, VA., USA
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Practices such as flexible, pre-established framework agreements can improve timeliness and cost of procurement and help improve commodity security. Addressing legislative barriers and building technical capacity in contract management may facilitate the use of such practices.

ABSTRACT

Public-sector entities responsible for procurement of essential medicines and health commodities in developing countries often lack the technical capacity to efficiently ensure supply security. Under strict public scrutiny and pressures to be transparent, many agencies continue to use archaic procurement methods and to depend on inflexible forecasts and cumbersome tendering processes. On the basis of semi-structured literature reviews and interviews, we identified framework agreements as a strategic procurement practice used by the U.S. federal government that may also be suitable for global health supply chains. Framework agreements are long-term contracts that provide the terms and conditions under which smaller repeat purchasing orders may be issued for a defined period of time. Such agreements are common in U.S. and United Nations procurement systems and in other developed countries and multilateral organizations. In contrast, framework agreements appear to be seldom used in procurement of health commodities in countries of sub-Saharan Africa. The current practice of floating tenders multiple times a year contributes to long lead times and stock-outs, and it hampers the manufacturer's or supplier's ability to plan and respond to the government's needs. To date, government's use of strategic contracting practices in public procurement of health commodities has not received much attention in most developing countries. It may present an opportunity for substantial improvements in procurement efficiency and commodity availability. Enabling legislation and strengthened technical capacity to develop and manage long-term contracts could facilitate the use of framework contracts in sub-Saharan Africa, with improved supply security and cost savings likely to result.

  • Received: 2014 Apr 21.
  • Accepted: 2014 Jun 18.
  • Published: 2014 Aug 1.
  • © Arney et al.

This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are properly cited. To view a copy of this license, visit http://creativecommons.org/licenses/by/3.0/

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Global Health: Science and Practice: 2 (3)
Global Health: Science and Practice
Vol. 2, No. 3
August 01, 2014
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Strategic contracting practices to improve procurement of health commodities
Leslie Arney, Prashant Yadav, Roger Miller, Taylor Wilkerson
Global Health: Science and Practice Aug 2014, 2 (3) 295-306; DOI: 10.9745/GHSP-D-14-00068

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Strategic contracting practices to improve procurement of health commodities
Leslie Arney, Prashant Yadav, Roger Miller, Taylor Wilkerson
Global Health: Science and Practice Aug 2014, 2 (3) 295-306; DOI: 10.9745/GHSP-D-14-00068
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