Revisiting that $605 million contract for the procurement of drugs and medical supplies

The Board of the Georgetown Public Hospital Corporation (GPHC) investigated the circumstances surrounding the procurement of drugs and medical supplies early this year in the sum of $632 million. The Board found that the Chief Executive Officer (CEO) acted “recklessly” in initiating the procurement but did not find any evidence that the Minister of Public Health gave any instructions for the procurement procedures to be bypassed.

The violations relate to the failure to follow the following: public advertisement inviting suppliers to tender for the supply of the specified items; the involvement of the National Procurement and Tender Administration Board (NPTAB) to which tenders must be sent; the appointment of a technical evaluation committee so as to arrive at the most competitive bid; and the granting of the no objection by the Cabinet in the award of the contract.

Background to the matter

News carried an article on the matter and that he was rather surprised at the sequence of events. As a result, he wrote to the Minister expressing his concern.

In response to the said article on the matter, ANSA McAL stated that a meeting was held on 16 January 2017 with all suppliers to address the shortage of drugs at the GPHC and the urgent need to procure such items. At that meeting, it was learnt that the invitation to tender in November of 2016 had been compromised, resulting in the need to procure the items on an emergency basis. ANSA McAL indicated that: (a) four suppliers were asked to submit bids based on a list of items that the GHPC had supplied; (b) it submitted a bid on 14 February 2017 for over 300 items; and (c) it was awarded a contract in the above sum for 118 items.

There were a number of concerns regarding the prices of certain items supplied by ANSA McAL, compared to those charged by other pharmaceutical suppliers. For example, an antibiotic 20g clotrimoxazole cream was listed in the invoice at a unit price of $1,750 while the price charged by other suppliers was $95, a more than 18-fold difference. Similarly, a 30g anti-haemorrhoidal ointment, which previously had been sourced from other suppliers at $200, was listed at $2,150, a more that 10fold difference. The Ministry of Public Health issued a statement acknowledging the fast-tracking of the procurement. It, however, maintained that there was no breach in public procurement procedures, and blamed the situation on a conspiracy between suppliers and the staff of the Ministry. As a result, the Minister made the decision to proceed with the emergency procurement. Additionally, the Ministry stated that the supplier was one of only two companies in Guyana that provided appropriate cold storage for drugs and medical supplies and that the company not only airfreighted the required drugs but also donated four refrigerators to GPHC to store the emergency supplies! However, there was no explanation as to why the approval of the NPTAB was sought after the decision was taken to procure the items from ANSA McAL.

In the midst of a public outcry at what was a glaring breach of the Procurement Act, the Board of the GPHC, the Public Procurement Commission and the Auditor General announced their intention to mount separate