Before awarding a healthcare supply contract, procurement teams should ask ten questions covering: whether the supplier can cover all required non-clinical categories; whether they deliver reliably to all your sites; whether contracted pricing meets NSW Health PD2024_044 requirements; whether they have a dedicated healthcare account manager; whether they can provide NSQHS Standard 3 compliance documentation; whether they hold a published ethical sourcing policy and Modern Slavery Act compliance documentation; whether their online ordering platform supports contracted pricing, standing orders, and multi-site delivery; whether they have references from comparable healthcare customers; how they manage product changes affecting compliance; and what their process is for resolving delivery and invoice issues. These questions turn supplier selection from a price comparison into a structured assessment of whether the relationship will deliver value over the life of the contract.
The NSW Auditor-General’s 2019 report on HealthShare NSW found that HealthShare was not applying key contract management elements to over 80% of the high-value contracts it manages. The same report cited HealthShare’s own Contract Management Guide finding: without rigorous contract management, 75% of projected sourcing savings can disappear within 18 months of contract award.
These findings point to a structural problem in healthcare procurement that starts well before contract management begins. If the wrong questions are asked before awarding a contract, or the right questions are not asked at all, the contract starts with gaps that no amount of subsequent management can fully close. Delivery reliability not confirmed at award becomes a chronic issue. Compliance documentation not requested upfront creates accreditation risk months later. Performance monitoring arrangements not established before signing cannot be imposed after the fact.
NSW Health PD2024_044, mandatory for all NSW Health entities and a condition of subsidy for public health organisations, requires that all procurement delivers value for money outcomes. The questions set out in this article are the pre-award due diligence that makes this requirement achievable in practice.
10 Questions to Ask Before Awarding a Healthcare Supply Contract
1. Can you cover all the non-clinical categories we currently purchase?
This is the foundational question, and the answer determines whether consolidation is genuinely possible or whether the organisation will still need multiple vendor relationships after awarding the contract. A supplier that covers stationery but not cleaning, or kitchen supplies but not bathroom consumables, leaves procurement gaps that defeat the purpose of consolidation.
Before awarding, map every non-clinical category your organisation purchases and verify against the prospective supplier’s catalogue. The minimum coverage for most Australian hospitals includes cleaning and disinfection, hand hygiene and bathroom consumables, kitchen and catering supplies, office and stationery products, PPE and infection control items, safety and first aid, and furniture and general facility items.
COS: COS supplies 40,000+ products across all of these categories. Most Australian healthcare organisations can replace multiple separate non-clinical supplier relationships with a single COS account.
2. Can you demonstrate delivery reliability to all our sites, including regional locations?
Delivery reliability is a non-negotiable criterion in healthcare procurement. A supplier that cannot deliver hand hygiene products, cleaning agents, or PPE consistently to all required sites creates NSQHS compliance risk and operational disruption. This is especially critical for organisations with regional or rural sites where alternative sourcing options are limited.
Before awarding, ask the supplier to provide on-time, in-full delivery rate data for existing healthcare customers in comparable geographic locations. Ask specifically how out-of-stock situations are managed, what the typical resolution timeframe is, and whether compliant substitute products are available. Ask how urgent orders outside standard delivery cycles are handled.
If the supplier cannot provide delivery performance data for healthcare customers comparable to your organisation, treat this as a significant risk factor in the award decision.
3. Will contracted pricing meet the requirements of NSW Health PD2024_044?
NSW Health PD2024_044, mandatory for all NSW Health entities and a condition of subsidy for public health organisations, requires that goods and services must meet all applicable quality, safety, security, and regulatory requirements, and that rates must be reasonable and consistent with normal market rates.
Before awarding, obtain written confirmation of contracted pricing across all categories, verify that rates are fixed and will not be subject to unilateral catalogue changes, confirm that pricing will apply automatically through the ordering portal so staff cannot inadvertently purchase at non-contracted rates, and establish the process for pricing reviews and renegotiations over the contract term.
This documentation is also the evidentiary basis for demonstrating value for money compliance in any subsequent audit or procurement review.
4. Will we have a named, dedicated account manager with healthcare supply experience?
The account management structure of a supplier relationship is one of the most consistent predictors of whether it performs reliably over time. The NSW Auditor-General found that HealthShare’s contract management practices were limited by inadequate performance monitoring. In the context of a non-clinical supplier relationship, inadequate account management is the supplier-side equivalent of inadequate performance monitoring: issues go unresolved, compliance documentation becomes outdated, and standing orders drift out of alignment with actual usage.
Before awarding, confirm: Is there a named account manager allocated to our account? What is their experience with healthcare supply requirements specifically? How are they contacted and what are the response time commitments? What happens if our account manager changes?
5. Can you provide NSQHS Standard 3 compliance documentation for all relevant product categories?
All hospitals and day procedure services in Australia are required to undergo external assessment against the NSQHS Standards, according to the Australian Commission on Safety and Quality in Health Care. Standard 3, Preventing and Controlling Infections, requires healthcare organisations to have systems in place for the procurement and use of appropriate hand hygiene products, cleaning agents, and PPE.
Before awarding, request a sample set of Safety Data Sheets (SDS) and compliance certificates for the infection control, hand hygiene, and cleaning products in your prospective approved product list. Assess the quality and completeness of the documentation provided. Confirm that the supplier has a documented process for proactively notifying you when product formulations, certifications, or regulatory status change for any item in your approved list.
A supplier that cannot provide organised compliance documentation promptly before award will not be better at providing it during an accreditation assessment.
NSQHS note (ACSQHC): Action 3.05 of NSQHS Standard 3 requires healthcare services to have a hand hygiene process consistent with the National Hand Hygiene Initiative. Suppliers of hand hygiene and cleaning products must be able to demonstrate product compliance on request. This is a supplier evaluation criterion, not just a product specification.
6. Do you have a published ethical sourcing policy and Modern Slavery Act compliance documentation?
The Modern Slavery Act 2018 (Cth), administered by the Attorney-General’s Department, requires entities with annual consolidated revenue of at least $100 million to report on modern slavery risks in their supply chains. For healthcare organisations meeting this threshold, supplier selection is part of supply chain due diligence. The Commonwealth Procurement Rules require procurement officials to consider a supplier’s ethical conduct as part of every value-for-money assessment.
Before awarding, request the supplier’s published ethical sourcing or responsible procurement policy, their Modern Slavery Act annual statement or equivalent supply chain risk documentation, and a copy of their Reconciliation Action Plan if applicable. File these alongside the contracted pricing documentation as part of the pre-award due diligence record.
7. Does your ordering platform support contracted pricing, standing orders, and multi-site delivery?
The operational value of a supplier contract depends significantly on the quality of the ordering platform. A platform that does not enforce contracted pricing at the point of purchase, does not support standing orders for consumables, or cannot manage multiple delivery addresses under one account creates the conditions for the off-contract purchasing and savings erosion identified in the NSW Auditor-General’s HealthShare findings.
Before awarding, request a demonstration of the ordering portal. Verify that contracted pricing applies automatically for all items in the approved product list, that standing orders can be configured and managed without requiring manual intervention for each cycle, and that different delivery addresses can be set up and managed under one account. Also confirm that order history and spend data are accessible for budget reporting and procurement compliance reviews.
8. Can you provide references from comparable healthcare customers?
References from current healthcare customers are the most reliable indicator of real-world supplier performance. Claims made during a sales process are not. Before awarding, request references from at least two healthcare customers of a comparable size and geographic profile to your organisation, specifically for the non-clinical supply categories covered by the proposed contract.
When speaking to references, ask about delivery reliability including any failures and how they were resolved, account manager responsiveness and quality, the ease of the onboarding process, compliance documentation management, and whether the relationship has delivered the value expected at the time of award.
A supplier that cannot provide comparable healthcare references, or whose references raise consistent concerns about any of these areas, is a higher-risk award decision.
9. How do you manage product changes that may affect our NSQHS compliance?
NSQHS compliance is not a point-in-time requirement. A product that meets Standard 3 specifications at the time of contract award may have its formulation changed, its certification lapse, or be discontinued during the contract term. The organisation needs to know in advance how these situations will be managed.
Before awarding, ask the supplier to describe their process for notifying customers when a product in their approved product list changes in a way that could affect compliance. Ask specifically: How far in advance will we be notified? Will you provide updated compliance documentation automatically? Will you proactively recommend a compliant substitute before the current product is discontinued?
The answer to this question reveals whether compliance support is embedded in the account management relationship or treated as the customer’s responsibility to monitor.
10. What is your process for resolving delivery failures and invoice discrepancies?
Every supplier relationship encounters exceptions. The pre-award question is not whether problems will occur but how they will be resolved when they do. The NSW Auditor-General’s 2019 HealthShare report found that contract management practices were limited by inadequate performance monitoring. The equivalent risk in a non-clinical supplier relationship is a reactive rather than proactive resolution process that requires the customer to identify, raise, and chase every issue.
Before awarding, ask the supplier to describe their process for: a delivery that arrives incomplete or with incorrect items; an invoice that does not reconcile with the purchase order; a product that does not match what was ordered; and an urgent order needed outside standard delivery cycles. The responses tell you whether accountability is built into the relationship structure or dependent on the individual account manager’s initiative.
Pre-Award Checklist: What to Have Confirmed Before Signing
Use this checklist to confirm that all pre-award due diligence is complete before executing the contract:
Category coverage confirmed
Supplier catalogue verified to cover all required non-clinical categories with no gaps that would require additional vendor relationships.
Delivery performance verified
On-time, in-full delivery rate data provided for comparable healthcare customers. Out-of-stock and urgent order processes documented.
Contracted pricing confirmed in writing
All pricing documented in writing across all categories. Confirmation that pricing applies automatically through the ordering portal. PD2024_044 requirements met.
Named account manager confirmed
Named account manager allocated with healthcare experience. Contact details and response time commitments confirmed. Escalation process documented.
Compliance documentation received
Sample SDS and compliance certificates reviewed and filed. Product change notification process confirmed in writing.
Delivery performance verified
On-time, in-full delivery rate data provided for comparable healthcare customers. Out-of-stock and urgent order processes documented.
Ethical sourcing documentation filed
Ethical sourcing policy, Modern Slavery Act statement or equivalent, and Reconciliation Action Plan filed as part of pre-award due diligence record.
Ordering portal demonstrated and verified
Contracted pricing applies automatically. Standing orders configurable. Multi-site delivery supported. Spend reporting accessible.
References checked
At least two comparable healthcare customer references contacted. No unresolved concerns regarding delivery, compliance management, or account management quality.
Frequently Asked Questions
Why is pre-award due diligence so important in healthcare supply contracts?
The NSW Auditor-General’s 2019 report on HealthShare NSW found that key contract management elements were not being applied to over 80% of high-value contracts, with savings at risk of erosion over the life of the arrangement. The root cause in many cases is insufficient pre-award due diligence: delivery reliability not verified, compliance documentation not requested, performance monitoring arrangements not established before signing. These gaps cannot be fully corrected after award.
Does awarding a non-clinical supply contract require a formal tender process?
It depends on the value and the procurement framework that applies to your organisation. NSW Health PD2024_044 sets a risk-based approach to procurement with requirements varying by contract value. For many non-clinical supply arrangements, a preferred supplier arrangement with contracted pricing can be established within existing procurement policy frameworks. Healthcare organisations should refer to their state health authority’s procurement guidelines for category-specific thresholds and requirements.
What is the most commonly overlooked pre-award question?
The compliance documentation question. Procurement teams often focus on price and range during evaluation and assume compliance documentation can be collected at the point of accreditation. In practice, a supplier that does not hold organised Safety Data Sheets and compliance certificates before award will not improve its documentation management after. This gap creates accreditation risk that could have been identified and addressed during the evaluation process.
How should contracted pricing be documented to satisfy NSW Health PD2024_044?
Contracted pricing should be confirmed in writing across all product categories before the contract is signed. The documentation should show agreed unit rates, delivery charge thresholds, any volume discount schedules, and the process for price reviews. It should also confirm that pricing will apply automatically through the supplier’s ordering portal so staff cannot inadvertently purchase at non-contracted catalogue rates. This written record is the evidentiary basis for demonstrating value for money compliance in any subsequent audit.
How many references should be checked before awarding a supply contract?
At minimum, two references from current healthcare customers of a comparable size and geographic profile. If your organisation has regional or rural sites, at least one reference should be from an organisation with comparable delivery requirements. References should be checked by speaking directly with the procurement or operations contact, not just reading supplied testimonials. Ask specifically about delivery reliability, account manager quality, compliance documentation management, and whether the arrangement has delivered the value expected at the time of award.
Can COS answer all ten pre-award questions satisfactorily?
COS supplies healthcare organisations across Australia with 40,000+ products across all major non-clinical categories, with contracted pricing meeting PD2024_044 requirements, a dedicated healthcare account manager, NSQHS compliance documentation support, a published ethical sourcing policy and Reconciliation Action Plan, a full-featured ordering portal with contracted pricing enforcement, standing orders, and multi-site delivery capability, and references from healthcare customers across Australia. Speak to the COS healthcare team at cos.net.au to work through any of these questions directly.
COS supplies Australian healthcare organisations with 40,000+ products, contracted pricing, NSQHS documentation support, ethical sourcing credentials, dedicated account management, and national delivery across all non-clinical supply categories.
