Analysis Posted August 3, 2011 Share Posted August 3, 2011 A few years ago now I was involved in procurement of £10-£15M of diagnostic equipment for a new NHS hospital. We narrowed the bidders down to 2 and decided that they were equally good, to all intents and purposes. We had asked for them to supply sealed bids and told them that we were going to open them at 08:30 on a particular morning. If they wanted to revise their price they had until 08:15 to do so. At 08:00 bidder 2 rang up and reduced their price by £500k. When we opened the envelopes, bidder 1 had priced the deal at £12M and bidder 2...........£9M after the discount. There were a lot of happy people that day. Link to comment Share on other sites More sharing options...
Si1 Posted August 3, 2011 Share Posted August 3, 2011 what's the cheapest another hospital/facility paid for it? Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 Including the two bidders who had agreed between them which one was to win that bid that day at inflated prices. Does anyone have any constructive comments? Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 what's the cheapest another hospital/facility paid for it? Don't know I'm afraid - complex equipment package and impossible to compare. I'm pretty confident we got best value for money though. Link to comment Share on other sites More sharing options...
Dorkins Posted August 3, 2011 Share Posted August 3, 2011 Does anyone have any constructive comments? What do you think this is, Mumsnet? Link to comment Share on other sites More sharing options...
Si1 Posted August 3, 2011 Share Posted August 3, 2011 Does anyone have any constructive comments? i realise we're being b*stards to you, but this is the kind of mean cruel scrutiny that any half decent private company SHOULD and probably would put its buyers under still being cruel to you tho Link to comment Share on other sites More sharing options...
leicestersq Posted August 3, 2011 Share Posted August 3, 2011 What do you think this is, Mumsnet? Happy stories about life saving equipment at minimal cost to the taxpayer, well if it looks like Mumsnet I guess it must be. I had better log on to www.urallbastards.foad.com Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 It happens all the time. Be naive to think otherwise. How many suppliers exist in the market for that equipment? Do they have an industry association? Why did you have only two bidders? How do you really know you got a good deal? Approx 30 bids to start with; we narrowed down to 2. No idea about industry associations - they are all independent private companies. I think a £3M (25%) saving is good. In a competitive tender you get the best deal by default, unless there is some sort of collusion going on. Having seen the bust ups and tactics these companies have employed over the years to win business from the NHS I find it hard to believe that this is the case - and if it is the case then any procurement process involving these 5 companies would go the same way. Link to comment Share on other sites More sharing options...
Dorkins Posted August 3, 2011 Share Posted August 3, 2011 I had better log on to www.urallbastards.foad.com That's the spirit. Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 i realise we're being b*stards to you, but this is the kind of mean cruel scrutiny that any half decent private company SHOULD and probably would put its buyers under still being cruel to you tho Not worried about contrary points of view - that's what discussion is all about. I do find the endless unsubstantiated, cheap comments a bit tedious however, but inevitable I guess in a public forum. Link to comment Share on other sites More sharing options...
leicestersq Posted August 3, 2011 Share Posted August 3, 2011 That's the spirit. Shove it Dorkins. Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 Happy stories about life saving equipment at minimal cost to the taxpayer, well if it looks like Mumsnet I guess it must be. I had better log on to www.urallbastards.foad.com Just a post about a well run procurement in the public sector, in response to the many contrary posts on this site. Not sure Mumsnet would be interested. Link to comment Share on other sites More sharing options...
rw42 Posted August 3, 2011 Share Posted August 3, 2011 Does anyone have any constructive comments? Is this equipment unique to each hospital? Theres more than a few hospitals around what did anyone else pay for it? Are you sharing this success story with other practices so that they can see the same savings? TBH this really is the wrong site for this. You're asking people to congratulate you on spending £9M without any opportunity for us to understand if it was needed, justified or competitive. So all that left is the happy clappy bullcrap, or the sarky comments. Which would you prefer? Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 Is this equipment unique to each hospital? Theres more than a few hospitals around what did anyone else pay for it? Are you sharing this success story with other practices so that they can see the same savings? TBH this really is the wrong site for this. You're asking people to congratulate you on spending £9M without any opportunity for us to understand if it was needed, justified or competitive. So all that left is the happy clappy bullcrap, or the sarky comments. Which would you prefer? Not asking for congratulations. Have seen inumerable posts on here about public sector procurement and how bad it is so this is an insider's account of one which was very successful. Just looking for a bit of balance. If this is irrelevant to the forum, then so are the multitude of previous posts. Link to comment Share on other sites More sharing options...
Analysis Posted August 3, 2011 Author Share Posted August 3, 2011 Is this equipment unique to each hospital? Theres more than a few hospitals around what did anyone else pay for it? Are you sharing this success story with other practices so that they can see the same savings? TBH this really is the wrong site for this. You're asking people to congratulate you on spending £9M without any opportunity for us to understand if it was needed, justified or competitive. So all that left is the happy clappy bullcrap, or the sarky comments. Which would you prefer? There's a lot of sharing of ideas in the NHS. That might diminish significantly once we're all in competition with one another. Link to comment Share on other sites More sharing options...
ChumpusRex Posted August 3, 2011 Share Posted August 3, 2011 Is this equipment unique to each hospital? Theres more than a few hospitals around what did anyone else pay for it? While it almost certainly isn't unique, and most hospitals in the country are likely to have similar equipment, the prices may not be directly comparable, as much of this sophisticated equipment is often available with a bewildering array of options, upgrades, and potentially customisations. Not all hospitals will want any or all options. Further, without knowing what the exact equipment was, it's impossible really to comment on whether it was good value or not. Finally, a lot of this type of equipment has very, very expensive service contracts. Did you check how much the maintenance would be? Some manufacturers will kill you on service charges. E.g. I know one medical equipment manufacturer that supplies digital X-ray systems, including the viewing software and IT infrastructure for the storage. (In fact, this is one of a very, very few good IT products in this field - the overwhelming majority are utter crap). In terms of price, the suppliers are all relatively similar. However, a number of sites which have very successfully used this product for the last 10 years, are considering rejecting their incumbent suppliers tender for an updated system - because the tech support charges are daylight robbery (e.g. need another workstation installed, can we transfer the software license from little used machine A to new machine B. No problem, sir. That'll be £50k for a 'licence modification'). Link to comment Share on other sites More sharing options...
tinker Posted August 3, 2011 Share Posted August 3, 2011 Whilst on the face of it Analysis you did well, the chaps on here make a point about the bigger picture and value. It assumes you had a budget for this and that budget was based on some idea of what you were buying and what the expected price for it / the package was likely to be. Having done that, and you came in under budget then there is hope for the NHS. Once you've been here a while, being cynical comes as second nature. It's mostly good humoured. Link to comment Share on other sites More sharing options...
SarahBell Posted August 3, 2011 Share Posted August 3, 2011 Does anyone have any constructive comments? Did they stick to it or claim they needed more money after they won? Link to comment Share on other sites More sharing options...
dohrayme Posted August 3, 2011 Share Posted August 3, 2011 Not asking for congratulations. Have seen inumerable posts on here about public sector procurement and how bad it is so this is an insider's account of one which was very successful. Just looking for a bit of balance. If this is irrelevant to the forum, then so are the multitude of previous posts. Did you only tender out to the chosen two companies? Did you see if other Trusts needed similar equipment? What makes you think you got a good deal!? Link to comment Share on other sites More sharing options...
Guest tbatst2000 Posted August 4, 2011 Share Posted August 4, 2011 Does anyone have any constructive comments? Sadly, no. Speaking as someone that's done a lot of high value purchasing in the private sector, if your entire process consisted of what you describe there, it doesn't sound good at all. I'm not saying you necessarily paid over the odds, but you may well have done without even realizing it. Link to comment Share on other sites More sharing options...
Vagabond Posted August 4, 2011 Share Posted August 4, 2011 Approx 30 bids to start with; we narrowed down to 2. No idea about industry associations - they are all independent private companies. I think a £3M (25%) saving is good. In a competitive tender you get the best deal by default, I call BS on this. You don't get anywhere near the 'best' deal by default. The problem with a lot of procurement in the PS in the way the system forces you to carry it out. IE The companies have to come to you to make a bid. This can automatically exclude companies that could have given you the product cheaper because they didn't know about the bid, or they weren't on the list of 'approved' companies or some equally other crap reason. In a sane world, you would do some leg work and search out the absolute cheapest price yourself. So did you get the best deal, or the best deal you could have got using the approved system. There is a HUGE sifference between the two. Link to comment Share on other sites More sharing options...
Bloo Loo Posted August 4, 2011 Share Posted August 4, 2011 Approx 30 bids to start with; we narrowed down to 2. No idea about industry associations - they are all independent private companies. I think a £3M (25%) saving is good. In a competitive tender you get the best deal by default, unless there is some sort of collusion going on. Having seen the bust ups and tactics these companies have employed over the years to win business from the NHS I find it hard to believe that this is the case - and if it is the case then any procurement process involving these 5 companies would go the same way. insufficient info for a detailed analysis for pat on the back or slap on the wrist. 1. What estimate had the originators of the project put to the job?...how did they calculate their price? 2. If this was existing technology, and you had loads of suppliers at outset...how much did your own shopping list come to and compared to the originators? 3. Why only two bids? 4. how much had other purchasers paid? 5. When the bids arrived, why the cut off and congrats....why not a new meeting of minds and haggle? The best way to check a quote is to price the components your self...there are problems here when you price in labour at what YOU are paying yourselves...for example, to allocate an NHS manager to oversee a task, you will have a formula for that...probably bears no relation to the actual cost...whereas the private contractor will price in the wage, the expense the tax, add the margin and come up with a price that is meaningfull. If the privateer knows what you charge yourself for parts of the shopping list, then he will price accordingly. Link to comment Share on other sites More sharing options...
Bloo Loo Posted August 4, 2011 Share Posted August 4, 2011 There's a lot of sharing of ideas in the NHS. That might diminish significantly once we're all in competition with one another. you need to rethink your ideas...too much ENTITLEMENT In your posting today. Link to comment Share on other sites More sharing options...
RichB Posted August 4, 2011 Share Posted August 4, 2011 £9m for something that the suppliers costs are only £500k for is still not that great a deal... Link to comment Share on other sites More sharing options...
ScrewsNutsandBolts Posted August 4, 2011 Share Posted August 4, 2011 Approx 30 bids to start with; we narrowed down to 2. No idea about industry associations - they are all independent private companies. I think a £3M (25%) saving is good. In a competitive tender you get the best deal by default, unless there is some sort of collusion going on. Having seen the bust ups and tactics these companies have employed over the years to win business from the NHS I find it hard to believe that this is the case - and if it is the case then any procurement process involving these 5 companies would go the same way. What were the prices of the other 30 bids ? I am guessing you didn't get costings, otherwise you would have mentioned the original pricing from the 2 final suppliers that went to sealed bids. You say that you narrowed it down to 2 for technical reasons, but then you seems to have played only these 2 companies off against each other. As a supplier you feel little pressure in this scenario (if they knew), and as a buyer you are very unlikely to get a good price. And I just don't get your concept of 25% off. I could narrow down my next car to a 15,500 quid Ford Focus or a 20,000 quid VW Golf. I ask the dealers to make sealed offers. VW don't discount and tell me 20,000, Ford say 15,500 quid then at the last minute knock 500 quid off. I see that as a 3% saving on the Ford... not a 25% saving which your model suggests. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.