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 I
BACKGROUND
(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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The present document attempts to describe the guidelines to be followed for contracting
out health services in India.
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SECTION – II
CONTRACTING 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.
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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
equity, 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?
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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
question. 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
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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
level 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
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‘performance review committee’, which should be an external agency. The
decision on this committee, too, should be taken by the high level committee.
d) 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
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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
government 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).
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• 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.
• 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
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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.
• 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 services
B) 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 cases
J) 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 Activities
2. 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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5. 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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3. 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 Provider
1. 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
Page 17 of 18

nature 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)
Page 18 of 18

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