Ministry single-sourced contract to Western Scientific even though probe urged blacklisting

-PPC to investigate

Though a Board of Inquiry (BoI) recommended in January that Western Scientific be blacklisted, around the middle of this year the Public Health Ministry (MoPH) single-sourced a $134.4m contract from the impugned Trinidadian company.

This development will raise further questions about practices at the ministry which had promised a revamped system following several procurement scandals.

The Public Procurement Commission (PPC) will be examining the contract granted to Western Scientific Company Limi-ted, however, not much should be expected of the findings since the country has no debarment laws and the sole-sourcing obviated competitive bidding.

“We will be looking at it,” Chairman of the PPC Carol Corbin told Stabroek News in an interview last week.

While there has been no formal complaint following the granting of the $134.4M contract to the company, also debarred by the Inter-American Development Bank (IDB) for fraudulent practices, the PPC would be examining the circumstances of how the contract was awarded.

Carol Corbin

In mid-August, government had announced that the company had secured a contract for the procurement of Sysmex reagents for the National AIDS Programme Secretariat to the tune of $134.4M.

Western Scientific was one of a number of companies that Minister of Public Health, Volda Lawrence had told Parliament in June this year had delivered expired or nearly expired drugs to the Ministry.

In January of this year, the BoI established by the Ministry of the Presidency into allegations of mismanagement and malpractices in the procurement of pharmaceuticals at the Ministry of Public Health had also recommended that the representative of Western Scientific be debarred from future tenders.

The recommendation came on the heels of information that an employee of the Public Health Ministry had conspired with the Western Scientific representative to gain insider information.

Additionally, the BoI had said that the Trinidadian company was hostile to the BoI and failed to appear before it. The BoI also recommended that legal advice be sought over the reviewing of contracts awarded to the Western Scientific representative.

Western Scientific was also debarred from IDB contracts for the period 2016 to 2020 for fraudulent practices. This related to its work in Guyana.

The employee of the company cited by the IDB was the same one impugned by the BoI in January of this year. Given all of this,  the Public Health Ministry would have to explain why it went ahead with Western Scientific and with single-sourcing when the items were likely available from multiple sources.

Government has come in for strong criticisms from observers and the opposition People’s Pro-gressive Party who questioned the procurement process and probed if the contracts were advertised.

 ‘Sole-sourced’

The  PPC Chairman explained that not only are there no debarment laws in Guyana to guide evaluators but moreover, this particular contract  was not reviewed by evaluators since it was sole-sourced  through the procuring entity: the Ministry of Public Health.

“There is no debarment law established which allows the entities to blacklist the contractors. They (the procuring entities) have to operate within the law. So if they do not select a contractor and they say it is on the basis of them committing some fraud or something of that nature, suppose that contractor carries them to court? What will they resort to? But in all fairness to them, an entity should access all relevant information when they are evaluating tenders but you can only evaluate based on what is in your tender document and your evaluation criteria. So if the evaluation criteria don’t include a specific reference to your due diligence about specific contractors, your evaluators won’t be able to substantiate any decision that they make. They can only work with what is in front of them and those would be the evaluation criteria,” she said.

“Anyway, what I noted is that it would not have even reached that point because it was a sole- sourced item. So for sole-sourcing you would have on your list of vendors or contractors, persons who are authorised to distribute (or) to procure a particular item. I was reading the newspaper and I saw where reference was being made that it was not advertised properly and all of that. But with sole-sourcing you don’t advertise, because you would have already had in your data base,  that this particular vendor is the authorised vendor for this particular item…you would ask the vendor for a quotation of the item because over the years this is what you would have been doing and so you select that vendor,” she added.

But in the case of Western Scientific Com-pany, Corbin said that there may have been a “communication gap” that allowed the company to secure the contract.

“There must have been some, I would say, gap in communication internally to the Ministry of Public Health because they should have had information saying to them that as a result of this commission of inquiry this company was involved in fraud and corruption,” she noted.

“But as to how robust the results of the CoI (that recommended blacklisting) were I don’t know. Can the Ministry of (Public) Health rely on that? If there was a specific recommendation to the Ministry of (Public) Health and they didn’t adhere then that is an issue, but one would have to verify and then look at the whole legality of that,” she added.

The PPC Chairman noted that the mere fact that they were sole-souring was that because the MoPH had probably “concluded at some point and time that this was the  only way of getting the particular item here locally.”

“Sometimes the option is to go directly to the manufacturing entity. But many times they don’t deal directly with purchasers they have their distributors for a particular region and so on. Maybe it should have been taken further at the time when it was determined that these people were involved in fraud and corruption to go to the manufacturer to get them disqualified. Those steps should have been taken so they can withdraw the manufacturer’s authorisation from them,” Corbin posited.

Debarment legislation

According to Corbin the safest way to protect a procuring entity against companies fingered in fraudulent and other illegal activities was to have debarment legislation.

Questioned on what is keeping Guyana from having such laws implemented she explained that the process has begun but there has been a snag in her commission taking over the process.

“From what I understand the legislation has been drafted and the Ministry of Finance had gotten funds from the IDB to review and finalise the legislation. Now since we have been established we should have taken over that because that is our responsibilities, and we had requested that the Ministry of Finance provide access to the funding for us to work with a consultant to do that, but that has not been done,” she explained.

Questioned as to the reason why the PPC has not gotten access to the funds, she replied, “I myself would like to know. But it hasn’t been done. That is one of the areas we should have been working on because that is one of our functions but you have to get resources because we would have to get someone that can really draft the legislation and finalise it. We don’t have those resources in house. The fact is that there are funds already earmarked and identified several years ago for that specific purpose.”

She has a theory about the delay and will again approach the Ministry of Finance to find out what is the reason for the sloth in the transfer.

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