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Procurement team education boosts compliance, lowers risk in healthcare sector

A little bit of education can go a long way for procurement teams in the healthcare sector, Toronto health lawyer Michael Gleeson tells AdvocateDaily.com.

Gleeson, a partner with DDO Health Law, says the special nature of hospitals elevates the risk of non-compliance when it comes to the rules governing large purchases for public sector organizations.

“If you’re buying a piece of equipment for a certain department, you need to involve the end-users, which means clinicians such as doctors and nurses, as well as technicians,” he explains. “The problem is that these are people who are not normally involved in the procurement process, so they’re not always aware of the regulations that apply to public entities.”

Gleeson says a technically deficient procurement project can be costly for his clients if the competition has to be re-run, or if one of the losing prospective vendors challenges the result in court.

However, he adds that outcome can largely be avoided by teaching inexperienced team members some of the basics of the procurement process.

“Some simple education about the boundaries of the role can help hospitals or other public sector entities avoid some of these pitfalls,” Gleeson says.

Below, he shares some of the key lessons for newbies on the procurement team:

Conflict of interest: Nothing is more likely to throw the result of a major procurement into doubt than a conflict of interest involving a member of the buying team with undisclosed links to the winning bidder, Gleeson says.   

“People on the purchasing team need to be informed about what a conflict is, when one might arise, and what they can do to mitigate a potential issue so that it’s not completely detrimental to the procurement,” he adds.  

Incumbent vendors: Most procurement projects involve the re-purchase or replacement of products and services that are already in place, which means there is usually an existing relationship between the purchaser and at least one of the vendors.

“You need to be careful to treat incumbents as equally as possible with other prospective vendors, so members of the purchasing team need to hear what is appropriate in terms of being, and appearing to be objective, and should be instructed not to give preference to one vendor simply because they are already familiar with them,” Gleeson says.  

Equal treatment for proponents: Whether or not incumbents are involved, Gleeson says it's crucial that the process appears untainted by bias.

“There needs to be equality of treatment across proponents. You can’t give more information or greater leniency to one vendor over another, or seem as though you’re viewing particular bids in a different way than all the others,” he says.

Confidentiality: Secrecy is vital to the integrity of the of the whole process, Gleeson says.

“Confidentiality is important not only in terms of who team members are speaking to around the hospital but also in terms of what’s said to different proponents about competing bids,” he says. “You can’t publicize who applied, what the pricing was, or any aspect of a proponent’s bid, particularly one that might be commercially sensitive, whether they win or lose.”

Communication with proponents: Every procurement team should have a designated point of contact for proponents, and all communication related to the bid should flow exclusively through that person, according to Gleeson, who says other members of the procurement team should limit their contact with potential vendors.

“It doesn’t mean you can’t talk about other topics,” he adds. “Just nothing to do with the process or anything else that might affect its fairness.”

Transparency: “The request for proposals will lay out the process for evaluating bids, so it’s important that team members are aware of what it says, to ensure that they stick to that method, rather than free styling,” Gleeson says.

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