The role of contractual arrangements in improving health sector ...

Financing
Bahrain
There is a clear doubt whether the contracted services are a priority one. Despite the fact
that cleaning and maintenance services are protected by the contracts, the hospital budget has
not been severely cut. This gives the hospital flexibility to transfer funds from low-priority to
high-priority areas. The contracted services are financed by the Ministry of Health regular
budget. In many cases, as the cost of contracts goes up from year to year, it is easier to secure
additional budget from the Ministry and Finance and National Economy to cover the increase,
although additional justification has to be provided. The Ministry of Health continues to have
the flexibility to manage its budget from the services provided in-house.
Communication between task networks
All parties at all levels are involved at different stages of the process including
concerned directorates in the Ministry of Health and concerned departments in the hospital.
Furthermore various responsibilities for contracting are assigned. This has meant that
contracts are strongly specified and enforced and well implemented at the local level, where
authority for monitoring the contract exists.
External factors affecting capacity to contract
Institutional context
Bureaucratic structure
The bureaucratic establishment supports contracting out of services to the private sector.
Long before the government announced the policy of privatization and contracting out, the
Ministry of Health proactively contracted out services like maintenance and cleaning. The
bureaucratic structure poses no hindrance to this process. On the contrary, it supports and
encourages such initiatives. There are clear laws, rules, regulations and procedures. These are
quite transparent and provide sufficient opportunities for contracting out. It should be noted,
however, that any contracting out requires prior approval of the Civil Service Bureau, because
it involves contracting human resource services, as well as the Tender Board. The renewal of
such contracts must also be approved by both agencies. This procedure is well defined in the
Standard Finance Manual [5] and the Government Tender and Purchases law [6]. It appears
that the existing Civil Service Bureau regulations do not prevent further contracting out,
although it might delay the overall contracting process.
Capabilities of the purchaser (Ministry of Health) for successful contracts
The Ministry of Health follows the national laws, rules and regulations for entering into
contracts. Any contract for a sum of BHD 10 000 (US$ 26 500) or more has to be tendered.
Based on a set of tender specifications, the contractors submit their competitive bids in closed
envelopes to the Tender Board. The bids are opened in public and handed over to the
respective ministry for evaluation. The Ministry of Health has a separate department that
deals with materials management (i.e. purchasing, storing, distributing and contracting). The
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