Report of the Public Procurement Commission on the procurement of emergency drugs (Part II)

Last week, we began a discussion of the report of the Public Procurement Commission (PPC) on the procurement of pharmaceuticals for the Georgetown Public Hospital Corporation (GPHC). So far, we dealt with two of the five conclusions relating to the Minister of Public Health’s involvement in the transaction which saw ANSA McAL Trading Ltd. being awarded a contract in the sum of $605 million.

We had stated that the threshold for sole source emergency procurement is one million dollars. Upon further review of the Procurement Act and the related Regulations, it does appear that this limit is only applicable to restricted tendering and not sole source procurement. That apart, the PPC report referred to a figure of $3 million as the limit for restricted tendering, citing a Cabinet decision dated 26 January 2016 on the matter. However, to give legal effect to this decision, the Minister of Finance has to issue a Regulation under the authority vested in him by Section 61 of the Act, which Regulation has to also be gazetted. It does not appear that this was done.

Suffice it to state that the $605 million contract with ANSA McAL was not based on sole sourcing but rather restricted tendering involving four suppliers. The other three suppliers – New GPC, Health 2000 and Chirosyn Discovery Technologies – were awarded contracts to the value of $25.8 million, representing a mere 4.1% of the total procurement. It is relevant to note that the evaluation of the tenders for 2017 annual procurement that was annulled due to certain irregularities, did not recommend ANSA McAL since it did not satisfy all the criteria and was therefore not considered substantially responsive.

In today’s article, we will examine the three remaining conclusions of the PPC relating to the Minister’s involvement in the controversial procurement, after which we will discuss the PPC’s recommendations. The three remaining conclusions are:

The GPHC officials’ intention to sole source the emergency drugs was conveyed to the NPTAB, but they did not follow through with the established procedures for sole sourcing supplies and, thus, breached the Act by making awards to suppliers prior to receiving NPTAB’s approval and Cabinet’s “No objection”.

The PPC was not presented with any information which indicated that the Minister was informed by the GPHC officials that they had made the awards to suppliers without seeking the approval of NPTAB and Cabinet.

The Minister assigned Mr. Oneil Atkins to the GPHC team specifically to identify the emergency drugs needed and not to select and contract suppliers. The GPHC officials ultimately made the decision to engage the four suppliers who were awarded contracts to supply the hospital with drugs.

Comments on the above conclusions

First, it is not within the authority of the National Procurement and Tender Administration Board (NPTAB) to approve of restricted tendering or sole source procurement whether on an emergency basis or not. Except for the transitional arrangements involving the Public Procurement Commission (which are no longer applicable since the Commission has since been established), Section 17(1) of the Act requires the NPTAB to be “responsible for 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