Delhi centralises hosp procurement to combat corruption, ensure uniformity

New Delhi: In a major overhaul of its public healthcare procurement system, the Delhi government has enforced a centralised procurement model for all government-run hospitals, routing every purchase exclusively through the Central Procurement Agency (CPA). The shift officially came into effect this week, following an administrative order issued last month.

Under the new system, hospitals are no longer permitted to make independent purchases of medicines, medical equipment, consumables, or machinery. Instead, all procurement requests must be submitted to the CPA, which will manage the entire tendering and purchasing process. The health department believes this move will streamline operations, standardise prices, and root out corruption.

“The centralised model will put an end to inconsistent pricing and quality disparities that resulted from hospitals sourcing independently from different vendors,” a senior official from the health department said.

The first tender processed under the new system cleared earlier this week, was for linen supplies to be distributed across Delhi’s public hospitals, marking the operational launch of the reformed procurement structure.

The CPA, which has functioned since 1994 as the nodal agency for acquiring medicines and surgical supplies for government health institutions, will now have enhanced responsibility and oversight. It operates under the Delhi government and will now serve as the sole authority for all healthcare procurement.

In situations of urgent medical need, hospitals are still required to route their emergency requests through CPA. The agency will assess the urgency and make arrangements accordingly, thereby eliminating any loophole for direct buying even in emergencies.

Health Minister Dr. Pankaj Singh confirmed the intent behind the transition, stating, “This decision is aimed at dismantling the procurement cartels that had long operated within the system. With centralised oversight, we will achieve pricing transparency and ensure uniform quality of all supplies.”

On June 2, the health department formally directed all government medical institutions to cease direct purchases, including via the Government e-Marketplace (GeM) portal, citing serious concerns over inflated prices and audit irregularities.

The government has also issued a strict warning, any violation of the new rules will be considered a serious breach and may result in disciplinary or legal consequences. No hospital is authorised to initiate tenders or procure independently under the current framework.