-tender board had rejected proposal for sole-sourcing
Minister of Public Health Volda Lawrence yesterday attempted to explain the controversial award of a $367 million contract for emergency drugs to New York-based supplier HDM Labs Inc. last year, raising more questions about the deal, including why the company was told it had been awarded the contract months before the national tender board’s recommendation.
Contrary to recent press reports, including by Stabroek News, Lawrence said in a statement that the contract was awarded to HDM Labs Inc. after it was the lone bidder among six companies in a restrictive tendering process but a representative for one of the other companies yesterday told Stabroek News it was not aware of any request to participate. Additionally, Lawrence, who maintained that “all the relevant procedures were properly followed,” did not mention that prior to the award the Public Health Ministry attempted to single source the drugs from HDM Labs Inc. and had informed the company at that time that it had secured the contract.
The Minister, who is due to provide a full explanation to the National Assembly tomorrow, also questioned the motive behind the timing of recent reports on the award as she alluded to the impending elections for PNCR Chairmanship, which she is contesting.
“Minister Lawrence will provide further and complete details in the National Assembly on this matter on Thursday, July 19th but takes note of the curious timing of this non-story, almost an entire year after the contract was awarded and, importantly, when a certain critical political decision is imminent,” a statement from the ministry said yesterday.
“Minister Lawrence trusts that this issue is not part of what would be a sinister campaign to influence this decision,” it added.
Seeking to “set the record straight on the mischievous, salacious and inaccurate reports in some sections of the media,” the statement noted that in April, 2017, six companies responded to the request for the supply of “Emergency Pharmaceutical Supplies for Regional and Clinic Services.” Those companies were: ANSA McAL Limited, Caribbean Medical Supplies (CMS), Global Healthcare Supplies, International Pharmaceutical Agency (IPA), HDM Labs Inc. and Meditron Inc.
However, the ministry said the National Procurement and Tender Administration Board (NPTAB) recommended that no award be made as all bidders failed to meet the evaluation criteria at the preliminary stage.
As a result, the ministry then sought permission from NPTAB for Restrictive Tendering, which was granted by the NPTAB.
“All six companies were then asked, by letter, to resubmit bids. Only one company (HDM Labs Inc.) responded. NPTAB then recommended that the contract be awarded having completed its evaluation report. A memo was submitted to Cabinet to this effect on August 29, 2017. Cabinet noted the recommendation of NPTAB. The contract was awarded on August 31, 2017, with all the relevant and applicable procedures having been duly and properly followed,” it added.
No approval for single-sourcing
However, the ministry’s statement did not mention that its Permanent Secretary, Collette Adams, had written to the NPTAB in June to seek permission for drugs to be single-sourced from HDM Labs Inc.
Letters seen by Stabroek News show that Adams wrote NPTAB Chairman Berkley Wickham on June 19th, 2017, seeking approval for the single-sourcing of the drugs and on June 20th, 2017, she wrote to HDM Labs Inc.’s US-based Guyanese head Hardat Singh confirming the award, although she had not been granted approval for single-sourcing.
Additionally, three days before writing to Wickham for approval, a request was sent to Singh for a quotation for the supply and delivery from a list of pharmaceuticals supplied. It is unclear whether similar quotations were sought from other potential suppliers, including the companies that had previously bid for the contract.
Adams’ June 19th letter sought to justify the single-sourcing by explaining that none of the bidders who had been considered during a previous tendering process in May had qualified. Additionally, her letter stated that HDM Labs Inc. has “great capacity” in delivering supplies to the Ministry of Public Health within a timeframe of two weeks; HDM Labs Inc. is a “recognized and efficient supplier” countrywide; HDM Labs Inc. has its pharmaceutical supplies registered with the Food & Drugs Department in Guyana and the Food & Drugs Authority in the United States of America; HDM Labs Inc. has its broker to clear consignments; and HDM Labs Inc. has supplied pharmaceuticals to Georgetown Public Hospital Corporation (GPHC) using all Standard Operating Procedures.
The June 20th letter informed Singh that he was awarded the contract. “The Ministry of Public Health is pleased to inform HDM Labs Inc., that it has been awarded the contract through the [NPTAB], Government of Guyana, to supply the attached list of items…,” it said, while noting the contract sum of US$1,789,866.15 or $366,926,660.8 at a conversion rate of $205 to US$1.
However, Adams wrote to Wickham again on June 29th, 2017, for the procurement to be retendered using restrictive tendering, with the six suppliers being identified as ANSA McAL, IPA, Global Healthcare Supplies Inc., CMS, Meditron Inc. and HDM Labs Inc.
The same companies had been invited to bid during a previous process but only three of them—ANSA, IPA and CMS—had bid. It is also unclear when the bids were evaluated but documents provided to Stabroek News show that all three companies failed the evaluation that was carried out by a three-person committee. The committee comprised Adams, Chief Medical Officer Shamdeo Persaud and Deputy Director of the Food and Drug Department Jewel Sears.
Meanwhile, Adams yesterday afternoon offered an explanation to Stabroek News for the procurement process, while noting that the ministry sought bids on three separate occasions.
“Listen to me carefully: We went three times. Three times we went out for the one tender. The first time was in April, the whole process started in April. We went in May [to tender]. The first restrictive was when these three [ANSA, IPA and CMS] bid. Six people were invited, three bid, all three failed and three didn’t bid. Because of an emergency, we were trying to go sole-sourcing. Tender board said no and annulled the sole-sourcing. So, the sole-source never happened. We went back to restrictive again. One person respond, so what is the problem? Three times we go with this thing,” said Adams, who noted that she would be available today to further explain.
“The first time was only three persons bid, the second time we tried sole-souring and they said no and we didn’t move with that document. We only sent a request to Finance and Finance said no. So, whoever thief out the documents and tried to carry it did a wrong thing because all we tried to do was to get these drugs in the place but we couldn’t because Finance said we can’t sole-source. So they annul the sole-source and say go back to restrictive and see if the same people what criteria they failed, they got that and they never respond,” she also said.
But while Adams noted that the three companies that failed during the first restrictive tendering process were again invited to bid for the July 18th tender opening, the representative of one of them has said that this was not the case. “After the three companies were told they did not get the contract, that was it. There are no records of another request for the same contract. …Ask for that paper and see if you get it,” one source said.
Adams maintained that the companies were invited to bid again and she said that the ministry believed that since they were given the reasons they failed the first evaluation, they would have resubmitted.
“You look at different capacity that some of them have. You have to understand that [the Ministry of] Health is different. If you have the capacity to supply, we might ask you again. You might fail for one stupidness, you might not put your financials inside, but that doesn’t mean you don’t have the capacity but because you failed to put the right thing in your document. We know you have the capacity. Why would we disqualify you again if you are going to get it?” she questioned.