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 $1b, assets of $500m, warehousing facilities and local registration are tailor-made to ensure that New GPC continues to harvest billions in contracts while other contenders here and abroad are shut out.

The criteria are contained in the ‘Prequalification process for the supply and delivery of pharmaceuticals and other medical supplies/ consumables for the period 2014 – 2016.’ It was released by the Materials Management Unit (MMU) of the Ministry of Health on December 18, 2013.

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 Capa-city’, ‘Infrastructure’, ‘Previous Experience’, ‘Established Link-ages’, ‘Manufacturer/Distributor Information’, ‘Quality Informa-tion’ and ‘Product Information.’

It said that out of a total of 200 available points, all entities seeking to prequalify to bid must score 80 percent.

“Preference will be given to pharmaceutical manufacturers in Guyana,” the document said. 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,” it said. It said preference will also be given to companies that have appropriate warehousing facilities in Guyana.

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

A score of 5 points is 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.

For having a separate area for the storage of controlled substances i.e. narcotics will earn a score of 10 points.

It is unclear how many of the criteria issued on December 18, 2013 are at variance with what the Ministry used for the evaluation of pre-qualifiers hitherto. Efforts by this newspaper yesterday to reach Procurement Manager at the Ministry of Health, Prakash Sookdeo for clarification proved futile.

While many of the criteria are reasonable in developing countries seeking to boost local drug manufacturing, the continued favouring of New GPC which became prominent during the 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 $1b would be automatically shut out, they argue.

Selective tendering

Speaking to the Stabroek News yesterday, APNU Member of Parliament Joseph Harmon said that with the new criteria, the Ministry of Health is establishing the conditions for selective tendering. “It is now narrowing the possibility for any other person other than Bobby Ramroop (Head of New GPC) to tender for contracts,” said Harmon.

President Donald Ramotar on Monday blasted the Ministry of Health saying that too many shortages of drugs are reported while at the same time drugs are expiring and have to be dumped.

“The President seems to be coming out against selective tendering,” Harmon said about the President’s remarks. He noted that the President’s statement however seems to be out of step with the new criteria for evaluating prequalified bidders.

“The entire procurement system has to be re-examined and that is why we need the Public Procurement Commission (PPC). The PPC will have to intervene,” he said.

Harmon does not believe that the new criteria should be allowed to be operational and called for them to be withdrawn. “How did they (the health ministry) arrive at these standards?” he asked. “What is the basis for introducing these guidelines now?” he queried. “They ought to be rejected outright,” he said.

Alliance for Change (AFC) Member of Parlia-ment Khemraj Ramjattan suggested Govern-ment crafted the new criteria knowing that the PPC is looming.

“The Government knows that one of its biggest suppliers of pharmaceuticals and medicines will come under severe scrutiny if the PPC becomes operational,” he said. “This supplier we all know is New GPC which supplies over $4 billion per annum to the Health Ministry and Public Hospital Georgetown and other Government health departments and agencies,” he said.

Crunch time

“Knowing that crunch time is around and that pressure from the PSC (Private Sector Commis-sion) and other NGOs will force it to establish the PPC, the Government is not hiding its bias towards this company,” he said.

“In the newly released ‘2014 to 2016 pre-qualification criteria for the supply and delivery of pharmaceuticals and medical supplies’ issued on December 18, 2013, Government has stacked the scales heavily in favour of this company,” he said. “For this new two-year period it has left the goalposts open for only New GPC to score, and from what I am seeing here only New GPC, as a local company, will pre-qualify,” he said.

“These three criteria mean that nobody can compete now with New GPC although I am aware other local companies can bring in the identical pharmaceuticals and medicines at five times and sometimes 10 times less the price Government has to pay New GPC.

“Under the Constitution making new rules and setting fair criteria for a level playing field for all competitors in the bidding process is the function of the PPC. I hope people are now appreciating why the PPC has not been established and become operational by this PPP Government all these years…and why the AFC is so adamant that it must be in January 2014 and no later,” Ramjattan stated.

Former Auditor General and President of the Transparency Institute of Guyana Inc. (TIGI) Anand Goolsarran said that under the Procurement Act, the procuring agency is allowed to decide on its prequalification criteria. Section 6 (5) of the Procurement Act 2003 says, “The procuring entity shall make a decision with respect to the qualifications of each supplier or contractor submitting an application to prequalify. In reaching that decision, the procuring entity shall apply only the criteria set forth in the prequalification documents.”

Goolsarran said that he would have to know for sure that the criteria set out in the documents issued this month are not the same that are currently used.

“The criteria are consistent with the Procurement Act 2003. The details of the evaluation criteria must be compared with what is being used to see whether the changes made put a supplier or contractor at a disadvantage,” said Goolsarran.

“The requirement to be registered in Guyana will put international organisations and overseas companies at a disadvantage. Are we saying that a foreign company must also set up a company in Guyana just to supply drugs?” he asked.

He said too that the tax criterion will exclude foreign companies from tendering. “I would like to see an arrangement where reputable overseas manufacturers can get the opportunity to bid to avoid the local middlemen setting up companies in Guyana,” he said.

He said too that overseas companies do not necessarily need warehouses. “They ship and the Ministry of Health should take delivery,” Goolsarran said. “You are excluding certain people who do not have warehouses. These criteria are biased towards New GPC. But we need to see how these criteria have changed over time,” he said.