AFC calls for probe of New GPC contracts

Opposition party AFC yesterday called for a wide-ranging probe into the award of multi-million dollar contracts to the New Guyana Pharmaceutical Corporation (New GPC) for the supply of drugs to the health sector.

“Given the non-commercial terms with New GPC, the special relationship between the company and government officials past and present and failure of the government to open this purchase to competitive bidding, it is necessary that (an) … investigation be carried out by an independent commission,” AFC leader Khemraj Ramjattan said yesterday as he read from a party statement.

Khemraj Ramjattan
Khemraj Ramjattan

The AFC, which holds seven seats in the National Assembly, believes that “at the very least, such an investigation would remove speculation and put at rest any perceived malfeasance.”

Ramjattan stated that the issue of sole sourcing needed to be addressed since some deals could not be explained.   “For the past 12 years, billions of dollars in drugs were being sourced through the New GPC without competitive bidding …Many reports in the media pointed to prices paid by the government many times the retail price for similar items and under … arrangements which conflict with normal commercial terms. In particular, the entire annual purchase is paid for at the beginning of the year rather than on delivery,” he said.

“The Auditor General’s report repeatedly raises questions such as over-buying, non-delivery, expired drugs, dumping of damaged items, all of which cost our taxpayer billions of dollars annually,” he added.

Auditor General Deodat Sharma had found that over $1.252 billion in contracts were awarded to pharmaceutical manufacturer New GPC using sole-sourcing rather than a competitive bidding process in 2010. He had stated that his office had recommended that the ministry abandon this method in favour of competitive bidding, since it was in violation of the correct procedure.

Ministry of Health Permanent Secretary Leslie Cadogan at Monday’s Public Accounts Committee (PAC) hearing had justified the decision, saying that the New GPC had met the specifications laid down in the Procurement Act of 2003. The government has said the sole sourcing of drugs from the supplier was discontinued in 2010.

After questions were raised by the award of a $1.3B contract to the New GPC for the supply of drugs and medical supplies to the Georgetown Public Hospital Corporation (GPHC) without public tendering last year, the company said its selection was based on its meeting pre-qualification standards two years ago.

“The Government and people of Guyana benefit in excess of G$400m per year from purchases made from the [New GPC],” the company said in a statement, adding that it was only one of two local companies to qualify during the pre-qualification process in 2010 to supply pharmaceuticals to the government.

In denying reports that it was being given preferential treatment by the government in the award of large contracts for the supply of drugs and medical supplies, the New GPC said that the Ministry of Health, in 2010, undertook a pre-qualification exercise for suppliers of pharmaceutical and medical supplies.

Five companies participated in the exercise, including two international companies and local companies Medpharm Co., IPA and the New GPC. Only Medpharm and the NGPC met the required criteria and were certified and approved to a join a list of established international organisations to supply pharmaceuticals and medical supplies to the government of Guyana, the company said, noting that the Ministry of Health has ever since been operating within this mandate.

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