1. PROCUREMENT SUPPORT SERVICES Voluntary Pooled Procurement & Capacity Building Services Technical Briefing Seminar November 18, 2009

2. 4. Board decision to implement VPP/ CBS as a Strategic Initiative 3. Discussion on strategies to improve grant performance 2. Major Challenges - Procurement and supply management of Health products 1. Secretariat monitoring grant performance Procurement Support Service Why Procurement Support?

3. Voluntary Pooled Procurement & Capacity Building Services Board Decision 2007 –Strategic Initiative to improve Grant Performance Objectives –Leverage Global Fund Purchasing Power Improve Market outcomes – Prices, quality, supply, sustainability Address Procurement bottlenecks / challenges – procurement process and delivery outcomes –To improve in-country capacity for effective, efficient & sustainable supply chain systems Model –Pooled Procurement – short-term strategy –Supply Chain Management support – long-term strategy

4. PROCUREMENT SUPPORT SERVICES - A Coordinated Approach to Procurement and Supply Chain Management Support VPP: Simplifies Procurement Process Reduce timelines for ordering and deliveries Ensure compliance with Quality assurance policy Facilitates timely payment Meet the needs of Principal Recipients CBS/SCMA: Addresses challenges in Supply Chain Management Through provision of Technical Support To strengthen existing capacities / systems Focus- Quantification, Storage, Distribution, Logistics Management Information activities In collaboration with development partners VPP: Simplifies Procurement Process Reduce timelines for ordering and deliveries Ensure compliance with Quality assurance policy Facilitates timely payment Meet the needs of Principal Recipients CBS/SCMA: Addresses challenges in Supply Chain Management Through provision of Technical Support To strengthen existing capacities / systems Focus- Quantification, Storage, Distribution, Logistics Management Information activities In collaboration with development partners Participating PRs Consulting /TA agencies Procurement Support Service The Global Fund PQR Secretariat Data input VPP Procurement and Delivery of health products CBS/SCMA Technical support for the management and delivery of health products in country Procurement Agents Principal Recipients TA Services VPP Orders / Information CBS/SCMA Providers Suppliers/ Manufacturers

5. Procurement Support Services VPP and CBS/SCMA – Voluntary PRs can access either VPP or CBS or both Procurement Support Service Team facilitates this process through mails, tele-conference or country visits (if required) Registration of PRs for participation is through FPMs

6. VPP Model 1.VPP Products Core products: 1 st and 2 nd Line ARVs; ACTS; LLINs Additional products: Drugs for Opportunistic Infections; Lab. Equipment and Reagents; Diagnostic Tests; Condoms; KO Tabs 2. Establishment of pool of suppliers (Negotiation) Product eligibility (Prequalification) ARVs / ACTs – Global Fund Quality Assurance Policy LLINs – WHOPES recommendation Negotiation outcome – Agreement on prices, terms and conditions (term sheet) ARVs / ACTs – Maximum / ceiling prices LLINs – Tender bid / fixed prices

7. VPP – Model And Process 3. Procurement Agents: Partnership For Supply Chain Management (PFSCM) –ARVs, ACTs & additional products Population Service International (PSI) – LLINs 4.Operational Process Aggregate demands, process orders / deliveries Selection of manufacturers – competitive process Process payments to manufacturers / suppliers Input data in Price Quality Reporting system

8. VPP meeting the needs of PRs Low procurement volumes /unable to obtain competitive pricing Limited capabilities / service of Procurement Agent required Procurement challenges - lead time from suppliers, Compliance with the GF Quality Assurance policy, competitive and transparent process Challenges on scaling up treatment and prevention

9. VPP Simplify Procurement Process – Multiple Steps Eliminated PR receives and checks drugs PR makes payment PR distributes drugs Patient receives drugs PR collects consumpti on information PR reports results to TGF Approval of Country Proposal for TGF Grant PR prepares PSM Plan specifying health products & quantities TGF disburses funds to PR Plan Submission For TGF Assessment and Approval PR launches procurement process Suppliers submit bids PR evaluates bids and awards supply contract PR places order for drugs and monitors order status PR reconciles needs and funds available Indicate VPP participation VPP Starts

10. VPP Services Operational – Orders being processed Procurement Service Fees LLINs – 2.5% FOB for delivery at Port of Entry 3.0% FOB for delivery to State / Regional level ACTs – 6.5% FOB price ARVs – 6.2% FOB price Additional products: –Drugs for Opportunistic Infections 9% –Test kits (Malaria; HIV) 6% –Laboratory equipment and supplies 8.5% –Condoms 9%

11. VPP Participation Confirmed participation 30 –Number of grants 55 In discussion 18 –Number of grants 31 Capacity Building Services –1 concluded with contracts –12 in discussions Consultation – confirm areas for intervention Development of work plans Facilitation of Contracting with TA Providers

12. Country Participation & Grants ClusterCountryHIVMalariaClusterCountryHIVMalaria EAUganda WCACameroon EAPIndonesia Congo Lao PDR Guinea Papua New Guinea Guinea-Bissau Philippines Nigeria Timor Leste The Gambia EECAArmenia Togo Macedonia LACBrazil MENANiger Dominican Republic SASwaziland Guyana Zambia Haiti SWABangladesh Nicaragua

13. VPP Procurement of Nets Orders processed (Individual tenders) Nigeria 3. million Nets - delivered Indonesia 1,1million – ready for shipment Bangladesh 0.5million – in progress Swaziland 91,000 – in progress (Total 5 million nets) Orders in the pipeline (consolidated tender issued) Nigeria 27million Uganda 7.3million Indonesia 4.9 million (Total 39.2 million nets) Orders in the pipeline (consolidated tender issued) Zambia 215,000 Timor Este 97,500 Nicaragua 30,000 (Total 342,500 nets) Next planned tender– pending confirmation Estimated 10 million nets (2 countries)

14. Update Status – ARVs and ACTs ARVs –Macedonia, Haiti, Lao, Armenia, Zambia, Guinea Bissau, Mozambique ACTs –Bangladesh, Cameroon, Guinea, Indonesia, Lao PDR, Mozambique, Nigeria, Papua New Guinea, Timor Leste, Zambia

15. CBS/SCMA - Model & Process Areas: –Quantification / Forecasting –Procurement Planning –Inventory / Logistics Management Types: –Training (groups / individuals / short-term / long-term) –Technical Support (Short-term / long-term / transfer of skills (I do-you watch/ we do/ you do-I watch scenario) –Developing Systems / Tools

16. CBS/ SCMA: Mechanism and Process Financing Contracting CBS / SCMA PR pays for service from grant Reallocation of funds in existing grants and/or Inclusion in future grant proposals Direct Payment to service providers PRs choose from available services Global Fund facilitate implementation of services Global Fund monitor service provided Identifying needs PRs identify CBS/SCMA needs (LFA assessments / reports of partners etc) Operational Model

17. CBS / SCMA Process Technical Support Services –Framework contracts with Service Provider John Snow Inc. (JSI) i+solutions University Research Co. (URC) –Collaboration with Technical Partners Access existing pool of service providers Coordinate activities at country level Registration and consultative process ongoing

18. Accessing VPP and CBS/SCMA Indicate during grant proposal / negotiation Confirm participation through a registration letter (FPM) –Indicate grant, product category, time frame for VPP or CBS Indicate on PSM Plan –VPP for procurement services –CBS requirements and budget –Ensure PSM Plan approval Procurement of health products –Submit list of products for procurement Adequate information on product specifications, quantities and reasonable schedule for delivery –Request for direct disbursement of fund to Procurement Agent

19. Accessing VPP and CBS/SCMA Capacity building service / Technical Support –Define Scope of work and deliverables –Selection of service provider –Request for direct disbursement of fund to Procurement Agent Direct communication to Procurement Agent or CBS/SCMA Service Provider is facilitated throughout the process Procurement Support Service Team monitors the process and performance of the Procurement Agent / Service provider