Evaluating Equipment Quotes & Proposals
MedWrench Guru Tommy Lobato discusses how one of the tasks for clinical engineers involves reviewing equipment quotes, yet can be easily mistaken.
Tue May 24 2022
Clinical Engineering is often tasked with reviewing equipment quotes prior to purchase. Most of the time the quotes are easy to review and mistakes or oversights are small or insignificant. Missed items though can lead to installation issues. Here are some that come to mind:
-A replacement table-top sterilizer was ordered with 220VAC power to replace an aging 120VAC unit. There are a couple of options to remedy what should essentially be a plug and play installation: Return/exchange it, or see if a 220V outlet can be installed.
-A purchase order was placed for a new gamma camera that had an overhead gantry. During the site survey, the project manager asked the account manager, “Is this room tall enough” while pulling out his tape measure. The account manager replied, “Oh, sure it is.” As it turns out, it was not tall enough, and a 12x12 portion of the tiled ceiling had to be recessed four inches to accommodate the gantry. This required additional costs and working closely with the fire marshal as the sprinkler heads were relocated.
Here are some things that I look for when reviewing a quote for new equipment. This list is not all inclusive, and I sure many of you could add helpful items. My intent is to give you a starting point, and some insight if you’re new to the field or the purchasing process.
1) Expiration date. This may seem rather trivial but companies may not accept an expired quote. As well, many buyers and finance managers will require a current quote before issuing a purchase order. When requesting a quote to be refreshed, make sure the expiration date will surpass the date you intend to purchase. It’s a good idea to ask if the price will change, and if there are any current promotions that you might be able to take advantage of.
2) Trade-ins. The quote may stipulate a trade-in on the old equipment. Here is where you can possibly make money or negotiate a better deal. Ask if the price (less the trade-in) is contingent on the old equipment. If not, shop it out. There are a number of medical equipment buyers who would be happy to give you a price on it. If the company is insistent on the return of the old equipment, you may be able to negotiate a better price. This plan should be run by Finance before pursuing as sometimes the sale of equipment to a third party buyer will go to a different accounting unit (AU) or a general fund as opposed to the capital allocation.
My hospital recently received a quote that included a trade-in amount. However, they also had line item charges for removal and disposal. Although, we brought this up to account manager, there was not a lot of negotiating we could do on these large sterilizers. There is not a lot of competition on these items and standardization was a must.
3) Line-Item Pricing versus Summary. Summary quotes hide the line item pricing. This makes it difficult to discern what you are getting for the price of each item and the cost of those items. Line item pricing on the other hand lists out the line item, and the cost for that product or service.
Suppose you are putting out a bid for a new nurse-call system. The various manufacturers have the basic tenants of a system but more often than not, can offer upgrades that other OEMs may not have, like hand-hygiene. In these instances, stipulating line item pricing will help you to be able to compare the costs of like items. You will be able to tell how much you are paying for those upgrades.
4) Vendor. This brings up the vendor. Be aware if your customer is seeking to buy a product that is new to your hospital system. I say system because many standardize to particular products or manufacturers. However, there can always be that one doctor that stipulates using a non-standardized video integration system. Those requests need to be looked at more closely.
5) Integration. It is important to note how a vendor’s technology will integrate with other systems in the hospital. For example, we just finished building a new Neonatal Intensive Care Unit (NICU). A requirement was to have alerts from the bedside monitors ring through to the staff phones. This required a software purchase from the patient monitoring company but also required the services from our interface vendor.
6) Quantities. I remember the Count from Sesame Street. He always made counting look so easy. Sometimes counts can get challenging though, particularly with nurse call, patient monitoring projects in large hospitals. In my conversations with the account managers, I will let stress the need for them to be accurate in their counts. Going back and requesting additional funds once a project is funded, may be difficult to get approved.
7) Consumables. Be aware of any consumables, including non-rechargeable batteries that may be used for a new device. Our telemetry boxes require AA batteries which must be changed twice a day. Our annual costs are in the double-digits. Other than that, the department should work with Supply Chain to ensure they have the correct consumables in stock before go-live.
8) Licenses, Software Maintenance Agreements (SMA), etc. These may or may not be on the quote. Enquire about them nonetheless for any software intensive devices. SMAs may or may not be a must have, but in some cases they can make your job easier. For example, some companies may not offer free phone support if an SMA is not in place.
9) Implementation Fees. These may not be negotiable. However, it is good to know what is and what is not included under these types of line items.
10) Project Management Fees. In my opinion, this means the project will be managed by the vendor and not myself. Establish the expectations with the vendor before purchase. In any case, it lets the account manager know that you have reviewed the quote and what you expect before the PO is issued.
Again, requests for replacement or additional equipment are often fairly easy. They can normally be reviewed and signed off as long as the software, connections, power requirements, etc., are the same as your existing equipment. Take more time on those capital purchases, and devices that may be a one-off so-to-speak. And remember these tasks can be viewed as opportunities to negotiate trade-ins, better pricing, and maybe even technical training.