Procurement Commission clears Volda Lawrence in $632m drug purchases

-one commissioner didn’t sign report

-GPHC, NPTAB officials rapped

The Public Procurement Commission (PPC) has cleared Minister of Public Health Volda Lawrence of any wrongdoing in connection with the purchase of $632m worth of  drugs  by GPHC that breached the procurement law however questions will linger as one commissioner did not sign the report.

Tabled in parliament yesterday, the first report of its type done by the PPC said that while Lawrence  gave the go ahead for the fast tracking of the purchase, she never suggested or condoned a bypass of lawful systems.

“The Minister of Public Health, by all accounts, was made aware of the emergency tender and concluding the timeframe for delivery was too long, instructed the GPHC (Georgetown Public Hospital) to ‘fast track’ the procurement of emergency drugs as a means of assuaging the acknowledged, continuing shortage of these items at the hospital,” the report stated.

Volda Lawrence

“The PPC was not presented with any information which indicated that the minister instructed the GPHC to breach the Procurement Act. Approval to ‘fast track’ does not translate to ‘bypass’ the NPTAB (National Procurement and Tender Administration Board). The GPHC was asked to devise a plan to fast track the emergency drugs and they provided a plan that reflected a delivery period of two weeks for the drugs. The Minister’s approval related to her instruction for them to present a plan as to how they could bring emergency drugs in the shortest possible time. The sole source method that they ultimately adopted was the fastest means of achieving this because it avoids a tender and evaluation process,” it added.

The signature missing from the report is that of Sukrishnalall Pasha and he was said to have differed with the other commissioners over the matter and presented a dissenting opinion. That opinion not was not contained in the report and the PPC report does not shed light on it.

The CEO of the GPHC Allan Johnson had been dismissed in the wake of the controversy over the $632m purchases. In some quarters it was suggested that he was being made the scapegoat for the purchases.

Further noted in the PPC report was that while GPHC officials’ intention to sole source the emergency drugs was conveyed to the NPTAB, they did not follow through with the established procedure for sole sourcing supplies and in so doing breached the Act by making awards to the 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 made the award to the suppliers without seeking the approval of NPTAB and Cabinet. The Minister assigned Mr. O’Neil Atkins to the GPHC team specifically to identify the emergency drugs needed and not to select the contract suppliers. The GPHC officials ultimately made the decision to engage the four suppliers who were awarded contracts to supply the hospital with drugs,” the report says of Lawrence’s involvement in the matter.

The four suppliers included ANSA McAl which secured the lion’s share of the purchases at $605m.

The report also reviewed the situation pertaining to drug availability at GPHC,  months prior to Lawrence’s appointment  as Minister of Public Health.  The report stated that there was a shortage of drugs throughout 2016 and the first two months in 2017 and as such the GPHC was “plagued by shortages of pharmaceuticals” due to several issues.

These included the late award of contracts for the 2016 annual supplies of pharmaceuticals, inaccurate quantification of supplies, an outdated formulary, and the delayed launch of the tender for the 2017 supplies and the annulment of the opening of tenders for the 2017 annual supplies.

Also, the late launch of a  restricted tender for 2017’s annual supplies, the fact that some contracts for 2016 were either delivered late or not at all and an ad hoc loaning of pharmaceuticals to regional hospitals also contributed to the shortages.

Combination

“The PPC concluded that the shortage of drugs at the GPHC during February 2017 was caused by a combination of factors. No information was presented to the PPC to support the contention that the shortages was artificial or engineered to facilitate the subsequent sole sourcing of emergency supplies. One major issue that impacted the availability of drugs at the GPHC during the 2016/2017 period was the inaccurate quantification of drugs procured for the 2016 annual supplies. This situation was compounded by the late and short deliveries after contracts were awarded for that year only at the end of June, 2016 with a delivery period of three to six months.

“GPHC made numerous ad hoc purchases of pharmaceuticals whose total value was five times that of the 2016 annual tender. The length of time taken to complete the tender process for the 2017 annual supplies was similar to that of the 2016 and resulted from the same pattern of errors committed in 2016, contracts for the 2017 supplies were finally awarded at the end of June 2017,” it added.

But in the process of procuring drugs to alleviate the problem, the report says that GPHC and NPTAB officials broke several laws, possibly due to their misinterpretation of the Procurement Act.

“The GPHC also breached section 26(1) of the Procurement Act in their use of the restricted tender procedure to purchase the 2017 annual supplies. This breach was committed in full approval of the Chairman of the NPTAB. GPHC and NPTAB have apparently misinterpreted the Act in respect of the application of the restricted tender procedure in the procurement of goods and services. The request for restricted tendering was made even though the anticipated values of the tenders exceeded the thresholds for this procurement procedure as set out in the Cabinet decision, dated January 26th 2016. Based on this cabinet decision, for entities such as the GPHC, the restricted tendering process should not be used to procure goods and services whose values exceeds the threshold of G$3 million,” the report states.

“The Chairman of the NPTAB gave approval for the GPHC to use the restricted tender procedure to procure the 2017 annual supplies and the subsequent six months’ emergency supplies, even though it was anticipated that the values for both tenders would have significantly exceeded the threshold of G$3M applicable to the GPHC purchases of goods and services. A formal complaint was made to the NPTAB and GPHC by the New GPC about the annulment of the annual tender for 2017 supplies and subsequent launch of a restricted tender for the same supplies. The complaint was not addressed by either entity but this procedure was indeed a breach of the Act. Further, the GPHC routinely made direct purchases of pharmaceuticals. These purchases were of significant value in total but reflected many instances of what appears to be contract splitting to avoid NPTAB review. This was in breach of Section 14 of the Procurement Act,” it added.

Another law broken was Section 22 of the Procurement Act where the report said that “the GPHC’s use of a tender committee to process and approve procurement transactions valued between $250, 000 and $1.5M” given that the committee was not properly appointed as outlined as per the Act.

Eight recommendations were made to not only avoid a repeat but to help the GPHC fix and remedy its drug shortage problems.

These include that the GPHC must execute all procurement transactions in accordance with the law and should establish appropriate systems.

“The GPHC should plan its procuring activities more effectively, including at minimum preparation of an annual procurement plan, which should be effectively executed and monitored. The GPHC is an independent agency and, therefore should not be subjected to direction and control from persons who are external to the organization. The Minister of Public Health is responsible for policy related matters and not administrative or operational issues. The Board is responsible for providing oversight and operational guidance to senior management. In future, any communication between the Ministry and GPHC should therefore be routed through the Board. Every effort should also be made by the relevant authority to ensure that there are no gaps in the appointment of a Board of the GPHC. Drugs and medical supplies loaned to other public health institutions should be recovered in an organized manner, in keeping with the Stores Regulations 1993,” the recommendations stated.

“GPHC should take appropriate steps to separate procurement from finance…GPHC needs to urgently assess and plan for adequate storage facilities for pharmaceuticals and medical supplies. The NPTAB should ensure that the evaluation process for tenders is conducted efficiently and in accordance with the Act. Agencies such as the GPHC should be closely monitored to ensure that tender documents are handled with strict security and confidentiality. The practice of documents being moved around to evaluators offices by various personnel should cease immediately and the time frame set out in the Act for completion of the tender evaluation should be strictly observed as far as practicable,” it added.

The fact that the GPHC is operating an Agency Tender Board without the approval or input of NPTAB should be also addressed urgently so that this breach ceases. “NPTAB should take the required steps to establish an agency tender board that includes representation from the GPHC Board. In addition, in view of the specialized nature of the needs of the GPHC, the procurement thresholds of expenditure applicable to the GPHC should be reviewed with the       objective of improving efficiency and reducing the need for the entity to make numerous ad hoc purchases, which may breach the Procurement Act,” the report says.

Missing

Following the release of the report yesterday, People’s Progressive Party Civic (PPP/C) parliamentarian Anil Nandall will be writing the PPC for answers as to why Commissioner Pasha’s signature was missing and why there is reference in the appendices to a minority report but none is attached.

“You will see that Commissioner Pasha’s signature is absent. Attached to the report are excerpts from documents that are headlined minority reports. So there is obviously a minority report but that report was not made available to us. Therefore what was made available was not the full report of the commission. The commission has five members. That report has the signature of only four so it is not a full report and we are asking for a full report of the commission,” Nandlall told Stabroek News.

“When the constitution speaks to a report from the PPC it speaks to a report that would have been endorsed by every member of the commission. I go back to the analogy that a judgment of a court does not only consist of a majority report but a minority. It is the majority judgment along with the minority judgment that constitute the full judgment of the court. The same principle ought to apply to the PPC. Certainly, enquiries would be made for a copy of that minority report soonest,” he added.

Pasha has told sources close to him that he had compiled a minority report and submitted it to Chairman of the PPC Carol Corbin since he felt that the PPC’s report, which would have been handed into the parliament, would omit his contributions to it.

Government in September of this year  approved a $515,178,268 payment to supplier ANSA McAL for pharmaceutical drugs already delivered by the company.

The PPC’s investigation began after the controversial purchases were drawn to the public’s notice by Stabroek News in March of this year. Stabroek News had initially reported that the GPHC had sought approval for an “emergency” purchase of $605.9 million in items from ANSA McAL. It turned out that the purchase was not in compliance with the procurement law and that a number of items sought from ANSA could not be deemed emergency supplies. It was later revealed that three other “emergency” purchases were made by the GPHC, in breach of the procurement laws, from New GPC (to the value of $20.8 million), Health2000 ($2.9 million) and Chirosyn Discovery ($2.1 million).

With the single-sourced purchases from the four companies clearly violating the procurement laws, Minister of Public Health Lawrence came under scrutiny after she disclosed that she had fast-tracked the acquisitions because of the need for supplies at the hospital and because of improprieties in the system. She later clarified that she had nothing to do with the actual procurement process.

A separate report by the GPHC had also absolved Lawrence and assigned blamed to former CEO Johnson.

Around the Web

Comments