The document outlines an active procurement approach developed by the National Institute for Health Innovation in New Zealand. It involves a 6-phase process where a facilitator manages vendor selection for innovation projects on behalf of the purchaser. The goal is to encourage partnership, address knowledge asymmetries, and spur innovation through a fair and auditable process. The approach aims to be faster and more collaborative than traditional procurement. It has been applied successfully to several health IT projects in New Zealand.

1. An Approach to
Active Procurement
Malcolm Pollock
Jim Warren
Yulong Gu
The National Institute
Informatics for Health Innovation

2. Outline
• History
The NHITB and the Cluster
• Motivation
The innovation conundrum
• Approach
6 phases
• Lessons learned

3. History
• Partnership summit
• Improving procurement high on
Cluster wish list
• Active procurement idea tabled
• Targeted at innovation projects
but wider application appropriate
in some cases
• NIHI picks it up

4. Motivation
• Current approach
– assumes buyer fully understands
solution (when normally they don’t!)
– creates adversarial relationships
– costly, lengthy, ineffective
– impedes innovation
• Active Procurement
– Fast about 12 weeks
– fair, auditable process
– enables partnership culture
– encourages innovation

5. Active Procurement Team
• Partnership between purchaser and facilitator
(NIHI in most cases to date)
• Purchaser ‘owns’ the decision and the contracting
process
• Purchaser specifies high level requirements for
EoI and appoints decision panel
• Facilitator provides and manages the process of
vendor selection
– Provides decision process and framework
– Finalises and issues EoI
– Carries out technical evaluation
– Chairs decision processes as non-voting member

6. 6-phase Process
1. Purchaser & facilitator develop the Governance structure
governance model, appoint
evaluation panels & define high-
The facilitator assists Funding model
level requirements.
in phase 1, manages
phases 2, 3 & 4, may
or may not be
involved in phase 5, 2. Purchaser & facilitator draft EoI. EoI Vendors develop responses to EoI.
and will not be
involved in phase 6.
3. Evaluation panels select a short EoI responses
list from vendor responses to EoI.
Short
list
4. Evaluation panels select preferred Shortlisted vendors present to
vendor. evaluation panels.
5. Vendor, with purchaser, conducts Implementation planning study
the Implementation Planning contract with vendor
Study.
6. Commercial contracting between Full commercial contract
purchaser and vendor

7. 1. Preparing the ground
• Developing the governance model
– Roles and responsibilities of the parties
• Appointing the evaluation &
technical panels
• Defining the high level
requirements
– Purpose
– Strategic implications
– Constraints
– Key functions
– Desired outcomes

8. 2. EoI Preparation
• High level description of
– desired outcomes
– Relevant supporting docs
– context for the initiative
– selection criteria
– a description of the process
– basic terms and conditions
• Facilitator may contribute
knowledge and research

9. 3. Short Listing
• Technical group
reviews
– Architecture
– Underlying technology
– Integration
• Functional panel
– strong clinical/user bias
• Traffic light approach

10. Example of the Traffic Light Approach
EOI Response Assessment
1. The respondent has software to demonstrate.
2. The respondent demonstrates an understanding of shared care plans.
3. The respondent recognises the need to work in partnership with clinical teams.
4. The respondent has the willingness and ability to collaborate and integrate with other suppliers
Assessor 1
Criteria Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor
1 g g g g a a
2 a a g g g a
3 g g g g g g
4 r g g g r g
Assessor 2
Criteria Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor
1 a a g g g g
2 a r g g g g
3 g a a a g a
4 g g g g a g
Assessor 3
Criteria Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor
1 g g g g g a
2 a a a g a a
3 a g g g g g
4 r a g g r a

11. 4. Vendor Selection
• Functional Panel reviews totality of
the solution
– functionality, fitness for
purpose, and usability
– its suitability to work within the
envisaged clinical context
– vendor culture and commitment

12. 4. Vendor Selection
• Technical Panel reviews suitability of
solution
– standards, architectural
compliance with national strategy
– approaches to inter-
operability, security and privacy
– technical competence and
responsiveness of vendor team

13. 4. Vendor Selection
Managed decision by Evaluation
Panel:
• Identify differences in panel
members’ evaluations
• Focus on the ‘red lights’
• Chair drives process but does not
influence selection
• Opportunity exists for circuit breakers
e.g. references, follow up questions
• Consensus sought – voting as last
resort

14. 5. Implementation Planning Study
• Define trial deliverables through the collective
wisdom and experience of vendor, purchaser
and other stakeholders
• Evaluation organisation
should participate at this
stage
• The vendor is paid for
their work during this
period
– probably on an approximate
cost recovery basis

15. 6. Contracting
• The process will engender
– a culture that is non-adversarial
– good human relationship dynamics
– a trial scope that everyone understands
and buys into
• Commercial and contractual
negotiations
– vendor advantage: investment that has
been made in them and their solution
by the purchaser
– purchaser strength: their option to go
back to market
– both sides: sense of common purpose
& understanding

16. Trials of Active Procurement
• Shared Care Planning
National Shared Care Plan Programme and healthAlliance
• Broking services for community e-prescribing
Safe Medications Management Programme
• Shared Maternity Record of Care
Maternity Shared Record of Care Programme
• Maternity Clinical Information System
Maternity Clinical Information System Programme

17. Lessons So Far
• Fast, fair & low cost
• Strong positive feedback from
participants
• Development and
implementation of a
collaborative culture
• Balances the dynamics of
innovation and commercial
rigour
• Wider applicability where the
solution is not commoditised

18. Where to from here?