PPC must probe procurement breaches in HDM Labs contract

Dear Editor,

Recently it was unearthed that HDM Labs Inc. was awarded a contract valued at $366,826,660 or ($1,789,886 US) on the 31st of August 2017.

In a statement to parliament on the 18th July 2018, Minister of Public Health Volda Lawrence, claimed her Ministry first had a restricted tender with six companies of which only three submitted bids which were opened on the 23rd May 2017. The National Procurement and Tender Administration Board (NPTAB) recommended that no award be made based presumably on the evaluation report that was submitted.

On the 29th June 2017, the Ministry of Public Health sought permission for restricted tendering using the same six companies from NPTAB. According to the Minister’s statement, the Ministry of Public Health received approval on the 30th of June 2017. On the 12th July 2018, the Ministry of Public Health wrote via email to the six companies requesting that they submit bids by the 18th July 2017. On the 18th July 2017 only HDM Labs submitted a bid. This single bid was then evaluated by the Ministry of Public Health and sent for approval by NPTAB on the 16th August 2017. The Ministry of Public Health then made an award to HDM Labs on the 31st August 2017.

In the first restricted tender, of the six companies that were requested to bid only three submitted bids. These included the International Pharmaceutical Agency (IPA), Caribbean Medical Supplies (CMS) and ANSA McAL Trading Limited (AMTL). Although HDM Labs Inc. was requested to submit a bid, this was not done in the first round of restricted tenders.

It is instructive that of the three companies that submitted bids, IPA, Caribbean Medical Suppliers, AMTL were all disqualified. The newspapers have reported that IPA’s bid was 187 million dollars. The Caribbean Medical Suppliers bid was for 95.5 million dollars. While AMTL was for 190.6 million dollars.

Having disqualified the three responsive bidders in the first round, the Ministry of Public Health, requested permission from NPTAB on the 30th June 2017, to do a second round of restricted tendering. The same six companies were requested to submit new bids within six days.  

However, reports in the press show that the Ministry of Public Health wrote HDM Labs Inc. on the 16th June 2017 to ascertain whether he was able to supply specific pharmaceutical items. On the 19th June 2017, the Permanent Secretary wrote to NPTAB requesting sole sourcing to HDM Labs Inc. On the 20th June 2017, the Permanent Secretary wrote to HDM Labs Inc. informing them of an award. If this is the case, then there is a clear breach of the procurement process, where a company was being handpicked for the job.

I had submitted questions to the Minister of Public Health on the 17/07/2018, to elucidate some of these matters. But the Minister using the majority in parliament asked that her answers be deferred.

There seem to be several consequences that have flowed from the reckless action of the Ministry of Public Health. The first is a clear breach of the Procurement Act Section 26 (1) on restricted tendering. In round two, while the Ministry of Public Health claims that they had restricted tendering, the evidence is suggesting that there was attempted sole sourcing from HDM Labs.

The Food and Drug Agency needs to assure the nation, that the medications that were bought through this contract have met regulatory standards, and provide the evidence to show that this company was licensed to import, and had met the necessary regulatory standards. 

HDM Labs were awarded a contract of 366.8 million Guyana dollars. This sum is 271.3 million more than the bid from Caribbean Medical Suppliers Inc., it is 179.8 million more than International Pharmaceutical Agency bid, and it is 176.2 million dollars more than the AMTL bid. These are clear indication that taxpayers of this country did not get value for their monies.

Minister Karen Cummings in her 2017 budget presentation had this to say, “We have toiled and wrestled with the beast called procurement. Under the sagacious watch of my Colleague and Comrade, the Hon. Ms Volda Lawrence, procurement at the Ministry of Public Health has been brought under control. These industry best practices are not designed to slow things down as they are implemented to practice good governance and leadership mixed with accountability, fairness, balance and transparent deliverables through and through…”

Yet in the same year when these utterances were made, the Ministry of Public Health has at a minimum breached the Procurement Act, awarded a contract to a company more than 271.3 million dollars more than the lowest bidder in the first round. This makes a mockery of the government’s claim that it is fighting corruption.

They should have no problem with the various statutory agencies investigating this matter urgently and thoroughly.

I therefore call on the Public Procurement Commission to launch an immediate investigation into the multiple breaches of the Procurement Act and those culpable must be brought to justice. I call on the Food and Drug Administration to immediately investigate the quality of medication to determine if it met the minimum safety standards. I call on the Auditor General’s Office to carry out a value for money audit to determine whether the medicines acquired by the Ministry of Public Health through this arrangement gave the Guyanese people the best value for their tax dollars.

Yours faithfully,

Dr Frank Anthony

PPP/C MP

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