guidelines_for_contracting out-final

Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, India

PUBLIC – PRIVATE PARTNERSHIP IN HEALTH CARE

GUIDELINES FOR

CONTRACTING OUT PUBLIC HEALTH SERVICES TO

PRIVATE ORGANIZATIONS

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ABOUT THE MANUAL

With the increased role of non-government organizations in various social welfare activities, it has now been recognized that their involvement in the management and delivery of health care in general, and primary health care in particular, can improve efficiency and effectiveness. In addition, their involvement in health care can mitigate the problem of accessibility to a large extent. It is, therefore, desirable that the private as well as government players work together towards the common goal of health for all. This is possible through a partnership approach – called Public Private Partnership (PPP) in health care.

While the public providers are engaged by the government, the private providers may be of different types – Non-governmental organizations (NGOs), Trusts, Private Practitioners, Corporate hospitals etc. The relationship between the government and the specified private party forms the basis of different partnership models. The contracting out model of PPP is one of these models which has been used more extensively. As per this model, the responsibility of health care delivery of a health care institution / a group of institutions / some part of a health care institution / specific services of a single or group of institutions is contracted out to private providers under certain terms and conditions. The present manual is an attempt to provide the necessary guidelines for contracting out health services and it is hoped that the manual will be of help to policy makers. The present version of the manual is a preliminary draft for obtaining feedback from the health care policy makers on the process of implementing the contracting out model in various states of the country.

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SECTION IBACKGROUND

(A) WHAT IS PARTNERSHIP IN HEALTH CARE?

Partnership is a collaborative effort and reciprocal relationship between two parties (government and private sector) with clear terms and conditions to achieve mutually understood and agreed upon objectives following certain mechanisms. The aim is to utilize the strengths of the government/public health care delivery system and the private sector in order to obtain maximum output with the minimum feasible cost, so that the overall objective of the government, i.e. improved health status of the population, is achieved. Improvement in the health status is measured in terms of pre-defined indicators.

(B) PUBLIC AND PRIVATE – OPERATIONAL DEFINITION (i) Public The public element of the partnership is constituted of (i) government expenditure - which is around 15 per cent of total health care expenditure; and (ii) the individuals’ out-of-pocket expenses - which is around 85 per cent of the total expenditure on health.

(ii) Private: The private health services delivery sector consists of:

For profit private sector: comprising of institutionally qualified medical practitioners providing services in clinics (this includes both modern and indigenous systems of medicine); less than fully qualified medical practitioners; institutions such as hospitals, nursing homes etc. providing different levels of services and corporate institutions.

Not for profit private sector: Known as non-governmental organizations, these are private, but define their mission in terms of achieving social and public health goals. They also include professional medical and nursing associations and philanthropic groups.

Community Based Organizations: sometimes also included under the NGO category, they are usually smaller and less formally constituted than an NGO, serve a limited geographical area and are formed to serve the interests of their members alone (e.g. women’s self-help groups, mother’s groups or savings and village banking groups).

(C) MODELS OF PUBLIC-PRIVATE PARTNERSHIP

The partnership between the public and private sectors has been tried out in different parts of the world. There are various forms (models) of partnership: (a) Franchising (b) Branded Clinics (c) Contracting out (d) Contracting in (e) Social Marketing (f) Build, Operate and Transfer (g) Joint Venture companies (h) Voucher system (i) Donations from Individuals (j) Partnership with social clubs and groups (k) Involvement of Corporate sector (i) Partnership with professional association etc.

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, IndiaThe present document attempts to describe the guidelines to be followed for contracting out health services in India.

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SECTION – IICONTRACTING OUT HEALTH SERVICES- CONCEPT AND

GUIDELINES

1. CONTRACTING OUT GOVERNMENT HEALTH SERVICES: CONCEPT

The term “contracting out” here broadly refers to the outsourcing of health care services and activities - which have been traditionally managed by the public sector – to the private sector. Thus contracting out is a purchasing mechanism used to acquire a specified service, of a defined quantity and quality, at an agreed upon price, from a specific provider, for a specified period. In effect, government decides to pay the private sector provider for services that it used to provide itself. The two parties – the contracting agency and the contractor – agree on a contract/ written agreement enforceable by law. While, the private providers decide how the services are to be provided, if appropriate, the government may also provide specialized facilities, equipment and other inputs, as decided upon in the contract. Thus the private sector is autonomous, not under the direct control of the government, and retains the flexibility to perform according to its own set of objectives and norms. The private providers have the freedom to choose which services to provide, determine their own level of quality, mix of inputs and costs.

2. WHY CONTRACTING OUT?

The political, economic and social changes in the country during last two decades have played a significant role in improving the health status of the people. However, from the present health care delivery system scenario, it is apparent that strenuous efforts still have to be made on a number of fronts if the country is to achieve the goal of health for all. There is an urgent need to strengthen political commitment in the health sphere in general, and for Reproductive and Child Health (RCH) in particular, and to formulate and implement policies to ensure health security and accountability.

Discrimination in allocation by favoring the urban over the rural population, or technologies serving a few at the expense of benefiting the many, are issues of prime concern. Furthermore, the issue of accessibility to health services, particularly for the people residing in remote areas, is equally important and needs to be taken seriously by the policy makers.

The absence of appropriate mechanisms for quality monitoring has resulted in wide variance in the quality of health services provided across facilities, leading to considerable disparity in the quality of services available to the wealthy and poor segments of the population.

These and other problems have led a number of countries to opt for alternative mechanisms of public health care delivery. The alternative mechanism that has been adopted by most of the countries is Public Private Partnership (PPP). Among the various models of PPP mentioned in Section I, contracting out has been widely used around the world iii and found to be one of the most successful models.

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3. PRE-CONDITIONS FOR CONTRACTING OUT

Before specifying the guidelines for contracting out of RCH services, it is pertinent to note that for successful implementation and sustainability, this PPP model has certain prerequisites:

Political commitment: It has been empirically proven world-wide that a supportive political climate is needed for its implementation. In addition, the health policy makers and administrators at all the levels need to be amenable to adopting the initiatives.

Trust and accountability: The government must show sufficient stability and consistency to incorporate a sense of trust among all the stakeholders, who form an essential part of all the relationships, and also maintain complete transparency and accountability in its dealing with other partners.

Decentralization: Decentralization of decision making and implementation of various activities, both within and outside the health sector, are important prerequisites.

4. INITIATION OF CONTRACTING OUT PROCESS – NECESSARY STEPS

(A) Review of experiences on the contracting out efforts

Conduct a detailed review of the experiments carried out in this regard around the world (particularly in developing countries) and more specifically in various states of India.

Make an attempt to understand the bottlenecks and the problems faced during the process of implementation.

Design appropriate strategy to overcome those problems/bottlenecks before implementation.

General remarks from present review: Given the experiences of the different states of India and of countries abroad, it is evident that several bottlenecks and constraints occur during the implementation of the contracting out model of PPP. However, changing the established system to bring about smooth implementation of the process needs to be carried out with care and in a phased manner.In most countries, including India, NGOs or philanthropic institutions (Churches) were selected as the contractors. Therefore, it appears that for the rest of India too, NGOs are the most likely or suitable candidates to assume the role of contractors.

(B) Deciding whether or not to contract out

It is necessary to assess whether the contracting out model of PPP would be feasible for a particular state/project area. This can be done by means of a detailed assessment of the existing political and organizational establishments that are instrumental for contracting out the health services.

General remarks from current experience: Governments contract out RCH services for essentially the same reasons as they do health care, i.e. to improve access and service

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, Indiaequity, to minimize the financial burden on the public sector and to make up for lack of capacity in specific areas. Looking at the health scenario in different states of India, it can be justified that PPP efforts in general, and contracting out in particular, would certainly help in improving the delivery of maternal and child health services in the country.

(C) Identification of facilities: criteria for initiation of contracting out

The identification of facilities that are to be contracted out is the first step to drawing up a contract agreement. Equally important is the justification for contracting out those facilities. Not all situations are ideally suited for initiating contracting out of the RCH services. As per the experiments conducted in various countries, contracting out activities should ideally be carried out in the following circumstances:

(a) Existence of a large number of staff vacancies over a long period.

(b) Existence of a high degree of absenteeism and consistently low performance on all indicators - which are common features of the primary health care delivery system in India.

(D) Assessment of the needs of the community

Once the appropriate reasons for contracting out are cited, the next step is to assess the needs of the community, which will help in determining the degree of demand for the type of primary health care services provided.

The assessment of community needs (i.e., of the communities living in the proposed intervention area) should be carried out by the government health functionaries in an ascending manner, i.e. starting from village to sub-center, Primary Health Center (PHC) and district.

Assessment of communities should involve all the stakeholders starting from members of the village health committee to PRI members and sub-center level workers. A review should be carried out at each respective lower level before it is passed on to the district level or higher. Prior to this assessment, appropriate training should be given to all the stakeholders involved in the process of assessing community need. The indicators mentioned in Form 1 as prescribed by the Government of India could serve as guideline for this entire process.

Another option is to assign this responsibility to an external agency with specified Terms of Reference.

This assessment of service demand will help the government to determine the exact workload of the contractor and the amount of resources needed for the health care institutions to be contracted out.

(E) Deciding on what to contract out?

The findings of case studies in several states of India indicate that the nature/package of services contracted out is varied and based on the felt needs of the communities in

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, Indiaquestion. These findings also indicate that the services can be divided into three categories:

Primary level: In this case the contracting out would consist of handing over the functions of the PHC with all its sub-centers to some NGO/philanthropic institution. In some cases the Anganwadi centers of the Integrated Child Development Scheme (ICDS) could also be handed over to the NGOs as they provide a similar type of service. Some Community Health Centers and Urban Health Centers could also be contracted out to NGOs/Trusts.

Secondary level: At this level the private providers may be involved in support services such as diet, laundry, sanitation, security, bio-waste management etc. The contractors may be provided space within the existing facilities or bring in the services from another location. In rural hospitals and other secondary hospitals, diagnostic facilities can also be contracted out to private service providers.

Tertiary level: Contracting out of specialty support services like CT scan MRI etc. which require high initial investment and maintenance costs.

The decision on which services need to be contracted out would be the sole discretion of the government made by a high level committee, preferably at state level.

(F) Deciding the degree of freedom for the contractor: Contract Design

Government has four options for the type of contracting agreement it may choose:

Option 1: Government might decide to hand over the physical infrastructure, equipment, budget and personnel of a health unit to the contractor. The contractor in this case basically acts as a manager.

Option 2: Government hands over the physical infrastructure, equipment, and budget but gives freedom to the contractors to recruit personnel as per their terms and conditions.

Option 3: Government hands over the physical infrastructure, equipment and budget but gives freedom to the contractor to have their own service delivery models without following a prescribed pattern.

Option 4: Government hands over the physical infrastructure, equipment, and budget and gives freedom to the contractor to have their own personnel, service delivery models, freedom to expand types of services provided and freedom to introduce user fees and recover some proportion of the costs incurred.

The above options, while not exhaustive, are popularly adopted in developing countries. The government has to decide which option to choose, and generally the most cost effective one should be chosen. However, cost effectiveness must be balanced against considerations of efficiency, equity and quality, which are also of prime concern. The decision on the option should be made by a high level committee, formed at the central

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, Indialevel and consisting of delegates from the Center, State and Local government and implementing agencies.

(G) Initiation of contracting process: Contract Management

Once the exercise on points B, C, and E are completed the next task is to select the contractor. This requires setting up the appropriate contract procedure.

Contract Procedure: The complete procedure for contracting involves following processes:

a) Bidding process:

The selection of contractors should be transparent and through open competitive bidding with specific Terms of Reference (ToR). The ToR needs to be prepared by a high level committee consisting of administrative and health department officials at the district, state and central levels.

The clauses in the ToR should be agreed upon by consensus by the committee. The expression of interest for the bid must be invited by the department of health

via advertisements in leading newspapers. The bidding should be evaluated by an independent committee. The decision on

the number of members and who should be in the independent committee should be decided upon by the high level committee. Ideally this committee should consist of technical and professional experts from the field of health and should be hired externally. The members of this committee should have adequate knowledge about the health care activities in the state.

b) Selection criteria:

A set of guidelines needs to be developed where the scores are given on pre-determined indicators such as past experience of the bidder, technical capability, expertise on human resources management, credibility in the project area and state, financial strength and ability to carry out the assigned task.

Assigning the scores and other necessary activities for selection need to be done by the independent committee. The decision of the independent committee shall be final.

c) Specification of performance outcomes:

The contracts should aim at ensuring that low income clients receive adequate care. A detailed review of the contracting out experiments indicates that many government contracts with private providers require the contractor to charge less to poor patients. So the number of poor patients served by the contractor could be set as an indicator.

Another possible indicator could be the amount of revenue earned by the contractor. The performance indicators need to be set by a committee, such as a ‘performance review committee’, which should be an external agency. The decision on this committee, too, should be taken by the high level committee.

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, Indiad) Contract duration and renewal on the basis of performance:

The contract duration may be short term or long term. The initial contract may be given for three years’ duration with the condition that it will be renewed further for satisfactory performance.

The performance indicators and their levels need to be specified prior to the contract and the evaluations need to be made by external agencies having expertise in performance evaluation. The indicators given in “RCH Phase II National Program Implementation Plan” can form the basis for the selection of performance indicators.

The contract duration should be linked to the amount of capital investment required from the contractor as the duration is closely associated with cost recovery. The greater the investment the longer would be the period needed to recover the cost, and thus the longer should be the notice period for contract termination.

While the state would have the power to cancel the services of a vendor, it is not desirable for vendors to be changed frequently. In the event of such an occurrence, the state needs to intervene and decide whether the facilities should actually be contracted out or not.

The clause related to termination should be linked with a penalty clause specifically for continually poor performance and violation of agreed upon terms and conditions. Contract termination should be based on an objective, evidence based review of the performance of the private provider.

Renewals can either be through extension or through re-bidding as decided by the government.

e) Quality assurance mechanism:

The quality assurance mechanism should be a part of the Memorandum of Understanding (MoU), which should clearly spell out the expected output indicators and service delivery standards. It is necessary to verify whether the contractors are maintaining those quality standards, and for this purpose surveys and facility visits by independent agencies are very important.

In addition, the assessment of quality should include feedback from the community members as well. Maintenance of an adequate supply of quality drugs is another issue which needs to be taken into account while checking on the contractor’s performance. Modifications required in logistics management should also be considered.

f) Monitoring and evaluation:

The monitoring and evaluation mechanism should comprise of ongoing progress reports in terms of pre-defined indicators (on a weekly/fortnightly basis) as well as biannual and annual assessments and evaluations. This can be done by the health department itself.

The periodic reports can be used to collect information on facility utilization and progress being achieved under the various health programs that are on the

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, Indiagovernment agenda. This activity can also be carried out by specialists in the government.

The biannual/annual assessment should be carried out by an externally hired agency.

g) Administrative costs:

Costs for developing and publishing advertisements, for consultants to prepare requests for proposals, for evaluation of bids received, administrative costs for sustaining contract management including financial management and fund flow administration etc. should be taken into consideration during the bidding process.

(H) Payment Mechanism:

An appropriate payment/disbursement mechanism for reimbursing the contractor needs to be established and agreed upon in the MoU signed between the concerned parties. However, the schedule of disbursements would depend upon the nature of the services contracted out to the contractor.

It is seen that payments are generally made retrospectively, as reimbursements or after the achievement of pre-determined benchmarks. As the financial status of the bidders is assessed during the selection process, it is presumed that most of the private providers selected are financially capable of making initial investments on equipment and operating expenses. However, an appropriate disbursement mechanism needs to be developed in order to avoid conflict between the government and the contractors. This may be on a monthly or quarterly basis, subject to the contractor’s performance evaluation.

The component of fees for services also needs to be a part of contract agreement since the contractors may have to invest in the purchase drugs and other consumables depending on the design of the contract.

(I) Monitoring and Evaluation

Performance measures and goals in contracts – even if not directly tied to payments – must be chosen with care, and among factors to consider are how to quantify the goals, and the extent to which they can be measured. PPP initiatives should increasingly consider using “performance based contracts” which pay the private provider only upon achievement of certain targets. Under this arrangement contractors have a strong incentive to set performance targets.

It is necessary to fix achievable performance goals in order to avoid conflicts between the contractor and the government. The establishment of non-achievable specific numerical benchmarks can have adverse consequences if, in the attempt to achieve these, the contractor neglects “small” goals (e.g. consumer satisfaction or equity in service provision).

Community feedback and follow up surveys can provide valuable information, particularly if they include individuals who declined services, who were not referred for certain services, or if ways were found to avoid serving the harder-and-more-expensive-to-serve clients.

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, India In difficult situations the states should have to freedom to revise their contract

managing processes through stakeholder feedback, performance analysis and the application of lessons learnt.

A sample of the Terms of Reference (TOR) for contracting out Primary Health Care services to NGOs is given in Annexure – I.

(J) Conflict Management

Since the contracting out process constitutes a transition from a government run sector to a PPP based one, both administrative and ideological conflicts are bound to arise. As this is not a desirable situation, attempts should be made to identify the possible areas of conflict and incorporate solutions in the contract agreement, a priori. There are several steps that need to be followed for conflict management if such situations do arise:

Analyze the conflict situations and discover the causes through discussion with the stakeholders.

Determine conflict management strategy such as open dialogue with the stakeholders after acquiring a general understanding of the conflict; work towards compromise via a neutral facilitator; develop objective criteria for evaluation, keeping in mind the principles of fairness.

Pre-negotiation / Negotiation in situations where the conflicts are likely to arise. Post-negotiation – managing the situation after the conflict has arisen (first and

second bullets are to be followed).

(K) Human Resources (HR) Management

The most difficult and challenging task in the contracting out exercise is the management of human resources. It is well known that bringing about any change in the existing health care establishment is a challenge. This constitutes the primary obstacle in implementing the contracting out model of PPP. However, tactful policies and preparedness to face the challenges would help smooth the process. The HR subsystem is itself a system of interdependent components. A posting policy designed to improve the equitable distribution of staff affects development prospects. Promotions designed to improve staff development and increasing intakes to meet staffing targets also affect career structures. It is thought that the human resources can better be managed by the following initiatives:

Managing the existing work force: if the new institutional setup requires changes in the assignments of the existing workforce, they need to be provided with the option to either move or adjust to the requirement. Any redeployment needs to be planned in a decentralized manner. This exercise may involve a considerable investment on training of existing as well as newly recruited staff.

Reducing numbers (cost): More efficient use of remaining staff and improving the quality of work performed.

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, India Introduction of managed competition: Allowing service providers to

compete for potential service users and introducing mechanisms which reward staff efforts to deliver efficient and quality services.

Decentralization: of responsibility for management and planning of human resources at the point of delivery.

A sample of a model contract which could be used for contracting out services to NGOs/other private providers is given in Annexure – II.

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ANNEXURE - I

Terms of Reference for NGOs

I. BACKGROUND

The RCH-II Project is aimed at providing Primary Health Care to the community at large.

II. THE OBJECTIVES OF THE PROJECT ARE:

A) Increased availability and utilization of health servicesB) Building up of an effective referral system from the health centres to the FRUs.C) Achieving ____% coverage of all pregnant women with comprehensive ante-natal services such as TT immunization, regular periodic checkups, vitamin & iron supplements, counselling about nutrition, screening of high risk cases etc.D) Increase in institutional deliveries by ___%E) Increase in the immunization coverage of children against the six vaccine preventable diseases and administration of Vitamin "A".F) Decrease in infant and child mortality occurring due to diarrhoea and acute respiratory infections, down to ___% G) Increase in the couple protection rate upto ___%.H) Increased utilization of spacing methods, both by men and women, to reach at least ___% of the total couple protection rate.I) Increase in the number of vasectomy cases to upto ___% of the total number of sterilization casesJ) Increased overall health awareness and better health-seeking-behaviour among the community members.

III. TASKS TO BE CARRIED OUT

A) Facilities and Staffing:1. Establish the facility in the rural area of the concerned block and employ qualified &

trained staff as per norms. For each centre the staff would include one Medical Officer, two ANMs, one supporting staff for the Medical Officer and two others for ensuring cleanliness.

B) Social Mobilization Activities2. Organize the community with the help of the programme manager, the ANM and

health personnel. The NGO will be responsible for mobilizing community members and increasing their participation in maternal and child health care, also involving community networks, women’s self-help groups, youth groups, elected represenatives, etc. in active collaboration with the staff of the health centre

C) Community Needs Assessment and Service Delivery:3. Undertake a household survey within the demarcated area of the CHC/PHC.4. Identify pregnant women before completion of 12 weeks of pregnancy and provide

ante-natal care including immunization & nutritional supplements till delivery, and post-natal care upto 6 weeks of the post-partum period.

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, India5. Ensure 80% institutional deliveries through a well developed referral system and

supply of disposable delivery kits to all the pregnant women.6. Arrange for 90% immunization coverage for children upto one year of age against six

vaccine preventable diseases, and for subsequent booster doses as per schedule upto 17 years of age.

7. Arrange for distribution of Vitamin "A" as per schedule to the children upto 3 years of age.

D) Communication for behaviour change:8. Bring about awareness for effective management of diarrhoea and ARI.9. Undertake special sensitization programmes for adolescent groups on sexual and

reproductive health, inclusive of HIV and AIDS.10. Create awareness in parents about the right age of marriage for both men and women

and the ill-effects of early marriage for girls below the age of 18 years.11. Identify eligible couples and arrange for intensive educational activities for the

adoption of small family norms.12. Spread message about benefits of spacing.13. Create awareness to increase male participation in family planning.14. Undertake sensitization programmes, among men in particular and patients in general,

on various National Health Programmes.E) M.I.S:15. Maintain registers as per the approved MIS and furnish this to the inspecting

authorities of the district level committee.16. Submit periodic reports as per the prescribed proforma to the district level committee. 17. Submit themselves for the performance review undertaken by the district level

committee at specified intervals.18. Maintain accounts as per the accounting procedures and get them audited by the

Chartered Accountant and furnish an audit report for every six months.19. Oversee all tasks to be performed by designating a Project Coordinator. F) Additional Activities:20. The contractor can add additional healthcare services/ products to the range of

services provided through the facility after taking the permission of the district level committee.

21. The contractor can also charge a user-fee for some/all of the services being provided through the facility, after approval of the district level committee. The contractor would be free to utilize the funds thus generated on facility upgradation, minor/major repairs and installing new healthcare equipment within the facility.

22. Hiring of requisite staff shall be done by the contractor according to Government of India norms. The contractor would be given the flexibility to recruit the staff either from the existing staff or from outside, as long as the new recruits meet the qualifications and experience norms set by the government.

IV. SCHEDULE FOR COMPLETION OF TASKS:1. Designation of a senior representative of the high level committee as Project Coordinator immediately on signing of the contract. The name should be made known to District Collector and Commissioner, Family Welfare.2. The establishment of CHC/ PHC i.e., positioning of staff inclusive of Medical Officers, ANMs, Assisting Staff and Community Organizer to be completed within 15 days of signing of contract.

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, India3. Ensure participation of the community via various self help groups. This can be done by imparting the appropriate training to these groups once a quarter.4. Household survey and identification of eligible couples to be completed within 2 weeks of positioning of ANM.5. The various awareness programmes on different messages to be conducted as per schedules given by Secretary, Health, Family Welfare / District Collector / CMOs.

V. FACILITIES TO BE PROVIDED BY THE PRIVATE PARTNER THROUGH THE C-O HEALTH CARE PROJECT

l. List of identified PHCs to be contracted-out to be formulated.2. Provide HC appropriate accommodation (rented / government building).3. Provide grants-in-aid for the honorarium to be paid to the Medical Officer, other staff and the organizer, as per the approved pattern. 4. Provide training to the CHC/ PHC staff.5. Supply Drugs, Equipment, Furniture to each HC.6. Supply “Model Proforma” of various registers, returns and reports. 7. Guidance for IEC activities to dsitrict PMU.8. Honorarium for the project coordinator.9. Other financial assistance for tasks entrusted to the NGO from time to time.

VI. REPORTS REQUIRED TO BE SUBMITTED BY THE NGO:

1. Monthly progress reports as per the proformas supplied.2. Audit and utilization certificates.

VII. SELECTION OF NGO

The NGO may be selected on a sole-source basis by the district level committee. The district level committee may also shortlist the NGOs by asking for “Letter of Expression of Interest” through an advertisement.

The District Level Committee consists of:a) District Collector as Chairperson.b) Zilla Parishad Health Committee Chairman as Vice-Chairperson.c) CMO, Member - Convenor.d) Municipal Commissioner, Member.e) Dy. CMO, Member (If available)f) Representatives of state chapters of professional bodies (e.g. IMA, FOGSI etc)

VIII. REVIEW COMMITTEE

The work of the NGO will be reviewed by the “District Level Committee”. The release of quarterly funds will be based on satisfactory performance as certified by the District Level Committee.

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Annexure II: Model Contract

Agreement for operationalization of contracted-out health centres

Agreement for Assignment to be carried out by the NGO/ Private Provider1. Set out below are the terms and conditions under which (Name of NGO/Private

provider) has agreed to carry out for District Collector the asignment specified in the attached Terms of Reference.

2. For Administrative purposes the CMO has been assigned to administer the assignment and to provide [Name of NGO/Private provider] with all relevant information needed to carry out the assignment. The services will be required in the area of _____ for a period of about one year from____to ______

3. The District Collector may find it necessary to postpone or cancel the assignment and / or shorten or extend its duration without assigning any reasons. In such case, every effort will be made to give you, as early as possible, notice of any changes. In the event of termination, the (Name of NGO/ Private provider) shall be paid for the services rendered for carrying out the assignment to the date of termination, and the [Name of NGO/ Private provider] will provide the District Collector with any reports or parts thereof, or any other information and documentation gathered under this Agreement prior to the date of termination.

4. The services to be performed, the estimated time to be spent, and the reports to be submitted will be in accordance with the attached Terms of Reference.

5. This Agreement, its meaning and interpretation and the relation between the parties shall be governed by the laws of the Government of (State).

6. This Agreement will become effective upon confirmation of this letter on behalf of (Name of NGO/ Private provider) and will terminate on ...................................

7. The District Collector will pay (Name of NGO/ Private provider), grant-in-aid towards honorarium and other operational costs a total of Rs._____ per annum, which may vary based on programme implementation.

8. Three months advance will be paid to the NGO for effective operationalization. After receipt of reports, necessary vouchers and documents and certificate of satisfactory performance, funds for next quarter will be released.

9. Whether the performance is satisfactory or not has to be certified by the District Level Committee. After six months, the next quarter's release will be made only after receipt of Audit report.

10. The [Name of NGO/ Private provider] will be responsible for appropriate insurance coverage. In this regard, the [Name of NGO/ Private provider] shall maintain workers compensation, employment liability insurance for their staff on the assignment. The NGOs shall also maintain comprehensive general liability insurance, including contractual liability coverage adequate to cover the indemnity of obligation against all damages, costs, and charges and expenses of injury to any person or damage to any property arising out of, or in connection with, the services which result from the fault of the [Name of NGO/ Private provider] or its staff. The [Name of NGO/ Private provider] shall provide the (Name of borrower) with certification thereof upon request.

11. The [Name of NGO/ Private provider] shall indemnify and hold harmless the District Collector against any and all claims, demands, and/or judgments of any

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Created by Dr. P. C. Dash, Senior Program Specialist-PPP, FGI/USAID, Indianature brought against the (Name of Borrower) arising out of the services by the [Name of NGO/ Private provider] under this Agreement. The obligation under this paragraph shall survive the termination of this agreement.

12. All final plans, programme reports and other documents or software submitted by the [Name of NGO/ Private provider] in the performance of the Services shall become and remain the property of [the District Collector]. The NGOs may retain a copy of such documents but shall not use them for purposes unrelated to this Contract without the prior written approval of the District Collector.

13. The NGO/ Private provider undertakes to carry out the assignment in accordance with the Terms of Reference, and to ensure that the staff assigned to perform the services under this Agreement will conduct themselves in a manner consistent herewith.

14. The [Name of NGO/ Private provider] shall pay the taxes, duty fees, levies and other impositions levied under the applicable law and the District Collector shall perform such duties in this regard and to the deduction of such tax as may be lawfully imposed.

15. The [Name of NGO/ Private provider] also agrees that all knowledge and information not within the public domain which may be acquired during the carrying out of this Agreement, shall be, for all time and for all purpose, regarded as strictly confidential and held in confidence, and shall not be directly or indirectly disclosed to any person whatsoever, except with the District Collector’s written permission.

Place :

Date :

(Signature of Authorized Representative on behalf of NGO)

Attachment: Terms of Reference

(Signature & Name of the Dist. Medical & Health Officers)

of 18

guidelines_for_contracting out-final

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