31 October 2023

Positive response to HSV customer engagement ahead of PPE category tender

Positive response to HSV customer engagement ahead of PPE category tender3

Health services are responding positively to consultation sessions held by HSV on the upcoming Personal Protective Equipment (PPE) consolidated category tender.

The new category with a value of approximately $50m per annum, will consolidate existing contracts for drapes and clinical protective apparel, hand hygiene, disinfectants, chemical products and surgical gloves to drive price reductions and operational efficiencies.

Benefits of consolidation

Aside from more competitive pricing, the benefits of consolidating the three categories include more streamlined reporting, a consistent agreement structure and improved contract terms. The Procurement team is also working to identify greenfield opportunities in the market.  

The pandemic significantly impacted the PPE category, with escalating demand leading to increased competition and a large number of new suppliers in the market. There were also new requirements for products such as the N95 mask, which must be fit tested to meet health service specifications.

The new consolidated category will help HSV to leverage relationships built during the pandemic when PPE items were sourced from more than 50 uncontracted suppliers. By working closely with the sector, HSV has the potential to unlock significant value for health services.

To accommodate the scope of the tender, HSV has already implemented several changes to the prequalification of suppliers, Product Reference Group (PRG) and Executive Reference Group (ERG) recruitment and the evaluation of pricing against quality.

Input from sector to inform statewide strategy

HSV has consulted widely with the health sector including heads of procurement to get a better understanding of their needs ahead of the tender.

Royal Children’s Hospital Director Procurement and Supply Chain Greg Mancey says it’s very positive that HSV is listening to health service needs.

“I think it will lead to a more well-rounded outcome. It’s very exciting and I think there’s a lot of appreciation from the health sector about HSV’s willingness to do things differently,” says Greg.

Several changes have been proposed by health services, including the need for health service involvement in the supplier selection process, changes to the implementation times of new contracts and a review of pricing models to improve flexibility.

“It’s quite brave to change the paradigm like this. If this is a sign of things to come, then it’s going to be great for the whole sector,” Greg says.

Royal Melbourne Hospital Director of Property, Procurement and Supply Chain, Marcus Kim says the consultations have been a good opportunity for HSV and health services to align objectives to procure quality PPE.

“It’s great to see HSV leverage the experience and knowledge of health services. We are hoping to achieve a sustainable outcome in terms of the way we source PPE. We need to save money and HSV is taking the lead on this, but we also need access to quality PPE – that’s critically important,” Marcus says.

Positive response to HSV customer engagement ahead of PPE category tender

HSV Director Procurement Rebecca Prior says it’s vital to get the input of health services and suppliers before developing a statewide strategy for the PPE tender.

“The outcome for us has been hugely valuable – we have a better understanding of health services’ priorities and what they value most,” she says.

Successful engagement approach to be extended 

Rebecca says other procurement streams are taking the same approach to customer engagement.

“For example, we are mapping out a five-year strategy for our pharmaceutical stream and will continue to engage with health services as part of that planning process.

“We’re reflecting on the feedback internally across our teams so we can see more clearly the areas where we can add value and where the critical priorities and key challenges are,” says Rebecca.

The next steps in the PPE tender process will involve an analysis of health services’ input, and scoping and outlining a market engagement strategy. The strategy will be presented to the next Procurement Directors’ Forum in November.

“We will continue to engage the sector throughout the tender process,” Rebecca says.