Revisiting that $605 million contract for the procurement...

investigations into the matter. Last Friday, GPHC’s board announced the results of its investigation in which it indicted the then acting CEO but exonerated the Minister.

Comments on the findings of the GPHC board

The GPHC was established by Order No.1 of 1999 under the Public Corporations Act and is therefore a separate legal entity with a board that provides the necessary oversight of the organization. The current members of the Board were appointed by the Minister, and the Chairperson reports to the Minister. In such a circumstance, the Board would have found itself in a difficult situation when assessing the role of the Minister on the matter. Indeed, it would have been more appropriate for the Board to avoid making any statement about the Minister’s involvement because of this reporting relationship. Better yet, it should have stepped aside to allow for the independent investigation into the matter. As it turns out, the Board’s conclusions were at complete variance with not only the contents of the letter from the CEO to the NPTAB but also the statement put out by the Ministry in the midst of the controversy and public outcry.

There was no board at the time the procurement took place. From a governance standpoint, no public corporation, statutory body or other entity is which controlling interest vests in the State, should be allowed to function, even for one day, without a board. That this has happened in the case of the GPHC is a serious indictment against the person responsible for making the appointment. Suffice it to state that it is the Board that is required to provide the much-needed and necessary oversight of the management and operations of the Hospital. The Minister’s role is restricted to one of giving directions of a general nature regarding policy only as well as specific directions as regards the disposal of capital assets and the accountability of the proceeds. She cannot step down from that policy directive position and get involved in operational matters, since in doing so, she would be not only usurping the role of the Board but also exposing herself to personal liability in the event of any violation of the law. The Minister’s utmost priority should have been to appoint the members of the GPHC board so that they can critically examine the apparent shortage of drugs and medical supplies at the Hospital and take urgent measures to address the matter, within the confines of the Procurement Act.

If it was decided that supplies should be acquired on an emergency basis, whether through selective tendering or sole source procurement, the logical course of action should have been the acquisition of the minimum quantities to cover the period it would take to acquire larger supplies through the application of the full tender procedures. The fact that the procurement of such a large quantity using the emergency route did take place, would suggest a complete disregard for the requirements of the Procurement Act.

NPTAB’s role in public procurement

Section 16 of the Procurement Act outlines the NPTAB’s role in the procurement process. This involves exercising jurisdiction over tenders the value of which exceeds such an amount prescribed by regulations, appointing a pool of evaluators for such period as it may determine, and maintaining efficient record keeping and quality assurances systems. There is no provision in the Act for the NPTAB to approve of a particular method of procurement, whether by way of restricted tendering, sole source procurement or emergency procurement.

By Section 24 of the Procurement Act, public corporations and other entities in which controlling interest vests in the State are required to have their own procurement rules and regulations approved by the NPTAB. To the extent any provision conflicts with the Procurement Act, the latter takes precedence. The GPHC, however, does not have its own procurement rules and regulations, and therefore reverts to the Procurement Act in relation to its procurement activities. This shortcoming needs to be addressed urgently.

Restricted tendering and sole source procurement

The Procurement Act distinguishes between restricted tendering and sole source procurement. Restricted tendering occurs where the goods/services or construction, by their highly complex or specialized nature, are only available from a limited number of suppliers or contractors. In this case, all such suppliers or contractors are invited to submit tenders, and all other procedures relating to open tendering are applicable, including the involvement of the NPTAB depending on the amount involved, assessment by a technical evaluation committee, the determination of the lowest evaluated tender, and the ‘no objection’ from the Cabinet for contracts in excess of $15 million.

Sole source procurement, on the other hand, occurs where: (a) the goods or construction are available only from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights with respect to the goods or construction, and no reasonable alternative or substitute exists; or (b) the services, by reason of their highly complex or specialized nature, are available from only one source. It is also applicable where, owing to a catastrophic event, there is an urgent need for the goods, services or construction, making it impractical to use other methods of procurement because of the time involved in using those methods. Again, depending on the amount involved, the involvement of the NPTAB and the Cabinet would remain be obligatory.

Conclusion

Considering all of the above, we feel obliged to disregard, indeed set aside the Board’s findings, and await the outcome of the investigations by the Public Procurement Commission and the Auditor General. It is difficult to imagine that, in the absence of a board, an acting CEO can make a decision regarding the use of $605 million in public resources without consultation and agreement with the Minister. The Minister was the chairperson of the PAC for several years after the death of the respected Winston Murray. In that capacity, she would have acquired indepth knowledge of the workings of the Procurement Act. It should have dawned on both the Minister and the GPHC management that fast-tracking the procurement the way the GPHC did would constitute a serious violation of the Act. And, considering the amount involved, why was the matter not taken to the Cabinet with a request for a waiver of the tender procedures to facilitate the procurement?

This unfortunate episode should never be allowed to rear its ugly head in our system of public management, especially as regards transparency and proper accountability of public funds. It also reflects badly on ministerial, board level and senior management decision-making and actions.

Letters...Letters...Letters...Letters...Letters...