Concern grows on delay in drug contracts process

-NGPC seen as benefiting

Five months have elapsed since seven companies submitted pre-qualification documents vying to supply billions of dollars in medical supplies to Guyana’s health sector and having received no response since, some believe that the delay is a tactic to have current tenders given to the New GPC.

“This is a process that should have taken three months and we are…in June and no one hear anything? … Everyone knows why this is happening, three years will pass and still nothing because this is exactly the way government wants it so that (New) GPC can get all the contracts while the delay (is ongoing),” a representative from one the companies told Stabroek News .

Several efforts last week to contact the Ministry of Health’s Permanent Secretary Leslie Cadogan for an update have proven futile. Calls and visits to his office are met with responses such as “PS ain’t deh,” “You have to check back,” or “He is busy at the moment.” On one occasion Cadogan’s secretary arranged a meeting but shortly after, called to cancel as once again “PS won’t be available.”

Observers and several companies said that they believe the stalling is a tactic to have current tenders given to the New GPC, which is seen as having close ties to the government. The Ministry of Health has put together new criteria for prequalified bidders for the supply of pharmaceuticals and critics say the awarding of maximum points for turnover of $1 billon, assets of $500 million, warehousing facilities and local registration are tailor-made to ensure that the New Guyana Pharmaceu-tical Corporation (GPC) continues to harvest billions in contracts while other contenders here and abroad are shut out.

Trinidadian conglomerate ANSA McAl and the locally-based New GPC are among seven companies which submitted pre-qualification documents in February for the supply and delivery of billions of dollars’ worth of medical supplies for Guyana’s health sector. Western Scientific Company, another firm out of Trinidad and Tobago, is also seeking to supply and deliver pharmaceuticals, medical supplies and other consumables.

The remaining companies, which are all Guyana-based, are Telcom Solu-tions (Guyana) Inc, Medi-tron Scientific Sales, Inter-national Pharmaceutical Agency (IPA) and Global Healthcare Supplies Inc.

When Stabroek News checked with some of the companies, representatives informed that they have not been told if or when the pre-qualification analysis would be completed. They all said that they are resigned to waiting to see if their company has achieved the criteria set.

The submissions were opened on February 18th at the National Procurement and Tender Administration Board (NPTAB) which is located in the Ministry of Finance compound in Georgetown. Documentation submitted by the companies included an original and two copies of their tender documents and compliance certificates. The submissions were received by Ministry of Health Procurement Officer Prakash Sookdeo, who is also head of the Materials Management Unit.


Three experts


Stabroek News was told in April that three experts were identified by the NPTAB and they had begun the highly-anticipated evaluation. An official said then that the names of the selected companies could be expected by the end of June. However this week, Stabroek News was told that the evaluation process has stalled but no reason for the delay was given.

“You are asking a question I think all bidders want to know now …but while bidders wait the New GPC is being awarded contracts…Budget is passed, tenders are being awarded in the health sector for supplies but not a word,” a source said. “It is time for the government to tell the nation what is taking so long. The silence is deafening on this issue and it is what sets the tone for accusations of corruption …someone should say something to not only the bidders but to taxpayers,” the source added.

The pre-qualification for health supplies covers the period 2014 to 2016 and comes amid concerns that new pre-qualification criteria were tailored to favour New GPC, which was awarded billions of dollars in drug supply contracts over the years. If pre-qualified, ANSA McAl’s entry could shake up the market.

According to the evaluation criteria, bidders will be awarded points according to how they score on a number of questions in the categories of ‘General Information,’ ‘Financial Capacity,’ ‘Infrastructure,’ ‘Previous Experience,’ ‘Established Linkages,’ ‘Manufacturer/Distributor Information,’ ‘Quality Information’ and ‘Product Information.’ It said that out of 200 available points, all entities seeking to prequalify to bid must score 80 percent.

Preference will be given to pharmaceutical manufacturers in Guyana and companies that have appropriate warehousing facilities in Guyana, according to the evaluation criteria document. It said too that products manufactured in Guyana and certified by the Government Analyst Food and Drug Department automatically qualify and are eligible for a 10 percent price advantage compared with imported items.

Under General Infor-mation, the evaluators will ask whether an applicant is a legally registered company in Guyana and will award a maximum score of 5 points for this. Under Financial Capacity, an applicant will earn maximum points for having a turnover of $1 billion, net assets of over $500 million and paying at least $50 million a year in corporate taxes to the Treasury.

In addition, 5 points are awarded if a company has over 50 full-time employees with an average time on the job of three years. Under Infrastructure, 10 points are given if the applicant has a warehouse facility of 30,000 square feet in Georgetown or its environs, with suitable equipment, staff, IT, security, certification and sanitation. An additional five points are awarded if the facility has three separate temperature control zones for the storage of temperature-sensitive pharmaceuticals. Having a separate area for the storage of controlled substances, i.e. narcotics, will attract a score of 10 points.

While many of the criteria are reasonable for developing countries seeking to boost local drug manufacturing, the continued favouring of New GPC, which became prominent during the Bharrat Jagdeo administration, has led the political opposition to charge that the government’s intention is to steer the majority of drug supply business to New GPC no matter what. Reputable international suppliers who may not have warehouses here, are not locally registered and clearly do not have turnover of $1 billion would be automatically shut out, critics argue.

Prior to New GPC’s rise to prominence, specialized overseas agencies had supplied over 90% of the government’s requirements.

New GPC has a close relationship with the PPP/C government and opposition MPs have for years questioned the circumstances under which drug supply contracts were awarded to the company.

During this year’s budget estimates deliberations, Health Minister Dr Bheri Ramsaran told the National Assembly that it is a known fact that New GPC received a large amount of contracts. “Historic data show that the New GPC gets a significant slice of the pie,” he had said. Ramsaran then also promised to submit to the National Assembly data that shows what percentage of the health sector’s funds went to New GPC for drug supplies and which other companies supplied the Ministry of Health with drugs. A comparative pricing list was also requested for other companies, which Ramsaran promised to deliver. To date, he has not done so.

Former Auditor-General Anand Goolsarran has said that the criteria for the drug purchases should be reviewed. “It is evident that the application of the evaluation criteria in the prequalification exercise for the supply of drugs and medical supplies is likely to result in manufacturers and distributors being unable to achieve prequalification status,” Goolsarran wrote in his Stabroek News column. “They will therefore be excluded from supplying the Ministry with these essential items, or given orders for minimal quantities, with possible adverse effects on their operations,” he added.

“This will leave the local organization in question, which did not have a good track record in meeting its contractual obligations, with a virtual monopoly over such supplies,” Goolsarran had warned.


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