Impact of Life Cycle Costing in Procurement of Robotic Track-Based Central Laboratory at Apex Medical Institute in India

Abstract

Introduction Life cycle costing is an important management tool that takes into account the implications of planning, acquiring, operating, maintaining, and disposing of an asset during its complete life cycle. A major hindrance to the procurement of expensive equipment in developing countries is the lack of a reliable framework combining and integrating all the equipment life cycle aspects into procurement process. Methods The study was conducted from the data collected from the bids that were received for procurement of two robotic track-based central laboratories which were installed at All India Institute of Medical Sciences (AIIMS), New Delhi. The procurement was done as per the guidelines laid down under General Finance Rules (GFR) 2017 following the two bid systems: technical bid and price/commercial bid. Results A complete financial analysis of the robotic laboratory was done that involved gathering of all the pertinent financial information into one place and then using that data to analyze the feasibility of the bid. The life cycle costs of both the labs were calculated by assuming the life of equipment as 10 years and by factoring in cost of equipment including 5-year warranty, comprehensive maintenance from years 6 to 10, indicative cost of all reagents for 10 years, and indicative cost of all other consumables for 10 years. Conclusion Results showed that the cost of equipment alone should not be the sole predictor of making purchase decisions of equipment. Further research may additionally explore differences between processes being followed in government versus private organizations, as well as national guidelines and subnational practices.