Ordered by the Department of Finance: concerns the procurement of equipment for all public hospitals

Recently, the Finance Department of Shandong Province issued and implemented the local standard “Government Procurement Business Specification Part 1: Procuring Personnel” (hereinafter referred to as the “Standard”) in Shandong Province.

As the country’s first full-process operation specification for provincial-level government purchasers, it has a significant impact on the procurement of medical equipment projects by all public medical institutions in the province.

Products worth more than 10 million yuan must be investigated, and the exclusion of domestic products is prohibited.

The investigation includes historical transaction information of similar procurement projects, as well as potential follow-up procurement situations related to operation and maintenance, upgrades and updates, spare parts, consumables, etc. Directly targeting industry pain points such as “equipment bundling consumables sales” and “high price procurement of imported equipment”.

In addition to explicitly specifying the procurement of imported products, the “Standards” have also solved the problem of inefficiency in bid rejection.

Less than 3
No need to ‘scrap the bid and recruit again’

Regarding the issue of “frequent bid cancellations due to fewer than 3 suppliers”, the “Standards” clearly state:
If there are less than 3 substantially responsive suppliers in the public bidding process and the procedures are compliant and no unreasonable conditions are set, the procurement can be directly transferred to competitive negotiation or single source procurement without additional demonstration and publicity. When there are only two suppliers left in the competitive negotiation, the government can continue to purchase service projects, and re purchase after the termination of other projects.

If there are fewer than three suppliers, there is no need to abort the bid and re-invite bids; instead, you can directly apply to change the procurement method. Undoubtedly, this will greatly improve the efficiency of medical equipment procurement in public hospitals.

And these optimizations undoubtedly stem from the need to rectify the chaotic situation in the procurement of public hospitals.
Multi province promotion, optimizing the entire procurement process of public hospitals

According to the China Government Procurement News, the Finance Department of Shandong Province found in its preliminary research that some purchasers’ main responsibilities were not fully implemented, their demand management levels were uneven, and their internal control mechanisms were not perfect, which hindered the improvement of procurement quality.

• In 2024, the audit department of Shandong Province conducted an investigation on 45 public hospitals, which showed prominent problems such as “ineffective promotion of online procurement” and “sales of equipment bundled consumables” -25 hospitals had suppliers disrupting market order through the “free provision of equipment+high priced bundled consumables” model.

• The Zhejiang Department of Finance also found in an audit that 13 projects of 5 hospitals had violated regulations such as the “pre bidding supplier” clause.
he Central Commission for Discipline Inspection has also repeatedly issued documents naming the issue of procurement corruption in the bidding and tendering field of public hospitals, and the standardization of public hospital procurement has become a nationwide trend.

Based on this, many provinces such as Guangdong, Shanxi, Liaoning, Qinghai, Ningxia, and Hainan have successively issued new regulations or launched special rectification actions.
Under the linkage of multiple provinces, the procurement of public hospitals is forming a full process supervision system. And this transformation will not only compress the “grey space” in the procurement field, but also reshape the industry’s value orientation.

By conducting precise demand surveys, we can avoid situations such as “blind procurement” and illegal procurement of imported products, improve efficiency through standardized texts, and rely on expert credit management to ensure fair evaluations …..

Therefore, as the procurement management of public hospitals becomes increasingly improved, for medical device enterprises, those that can provide a full-cycle solution of “equipment + consumables + services” will receive more attention in the future.

China is encouraging China end uses for more domestic products in latest years. Thus, more and more overseas manufacturers are planning localization in China. BradyKnows localization team has extensive experiences in facility establishment, audit, supplier evaluation, manufacturing, registration, and marketing in China. Pls feel free to let us know any questions on China entry via info@bradyknowsmedical.com

Source: Medical Device Distributors Alliance

Translated & edited：Bradyknown