Multi-billion dollar drug contracts…

Pre-qualification system flawed, must

be scrapped – AFC says

- public can now nominate members to Public Procurement Commission

Government’s multi-billion-dollar drugs purchases are again coming under intense scrutiny.
This time the Alliance For Change (AFC) is demanding that the administration scrap plans to shortlist or pre-qualify suppliers.
The last pre-qualification period expired on December 31 and the Ministry of Health had been looking to select the suppliers for the next three years.
A pre-qualified contractor is automatically considered when it is time to order critical or emergency supplies.

AFC’s Leader,
Khemraj Ramjattan

Over the past year, there have been scathing criticisms, even from the country’s leader, over drug supplies and wastage to the tune of hundreds of millions of dollars.
Reportedly, a number of hospitals are currently short on critical pharmaceuticals like saline, painkillers, diabetic and high pressure medications.
With billions of taxpayers’ dollars at stake, independent suppliers and the Opposition have time and again been accusing Government of favouring New GPC, a company whose principal, Dr. Ranjisinghi ‘Bobby’ Ramroop, shares close ties with former President Bharrat Jagdeo.
The company has been benefiting from billions of dollars annually, controlling supplies of up to 80 per cent of the drugs purchased by the Georgetown Public Hospital Corporation (GPHC) and the Ministry of Health.
“On the one hand, the savings to the taxpayers and the treasury would have been enormous. Over the last two years alone the computation as to the amount saved would have been $1.8B! This would have been sufficient to give public servants this year an additional ten percent increase,” said the Alliance For Change.
On the other hand, the drug purchase has enriched the favoured company, New GPC hugely! This has been going on for years now.
AFC, which has seven of the 33-seat Opposition majority of the National Assembly, says that it is studying complaints that the pre-qualification evaluation criteria as laid down by the Ministry of Health, was deliberately prepared in a manner that sidelines small suppliers and tip the balance in favour of the controversial New GPC.
Public Invitation
The development would come even as the Parliament Office yesterday invited the public to propose names of persons for the Public Procurement Commission (PPC), the body that would oversee the way state contracts are awarded and which would have sweeping powers to investigate complaints of irregularities in the process.
According to AFC’s Leader, Khemraj Ramjattan, his party is pushing to have the Commission established and operational by this month end. Former Auditor General, Anand Goolsarran, and accountant, Christopher Ram, have been proposed by the party.

Health Minister,
Dr. Bheri Ramsaran

Ramjattan said that as such, the entire prequalification of contractors for the supplies of drugs should be reviewed by the Commission. Government would do well to hold off until the Commission is working, he urged.
Under the Constitution of Guyana, the PPC will consist of five members with expertise and experience in procurement, legal, financial and administrative matters.
President Donald Ramotar will have to appoint the members of the Commission after they would have been nominated by Parliament’s Public Accounts Committee and approved by not less than two-thirds of the elected members of the National Assembly.
The names of the persons have to be submitted not later than January 20th to PAC, Parliament Office.
Stage set?
Prior to 2010, the Jagdeo administration, under what is known as sole sourcing procurement, ordered that New GPC would be the preferred company for the supplies of pharmaceuticals.
In 2010, a prequalification system was used to select New GPC, MedPharm (a local company) and international suppliers. There were severe criticisms, too, over the process and whether it was fair.
According to the Auditor General’s Report of 2011, New GPC received a whopping 80 per cent of the contracts to supply. In 2012, that entity was awarded over $1.1B or 70 per cent of the drugs contracts for the GPHC.
At the Health Ministry, of the $2.7B budgeted for drugs and other supplies, New GPC received $1.87B or 68 per cent.
There have also been questions over the handling, accounting and delivery of drugs in a timely manner, and criticisms of the fact that up to late 2012, Government was paying New GPC to store pharmaceuticals it was delivering, in one of its properties.
Regarding the evaluation criteria introduced for this round of prequalification, Ramjattan said that suppliers, both local and international, complained that conditions were introduced that would clearly allow New GPC and a few others to automatically be qualified.
“I am not sure how they arrived at the evaluation criteria but with the many complaints about drug purchases, we are not happy over this.”
$1B turnover
Under financial capacity of the criteria, the potential supplier will have to show gross turnover of $1B (US$5M) and net assets of $500M (US$2.5M). The criteria said that maximum score will be awarded to applicants which have paid $50M in corporate taxes annually.
The company with 50 or more employees, and warehousing capacity of 30,000 square feet in the city, will also gain an

New GPC’s boss,
Dr. Ranjisinghi ‘Bobby’ Ramroop

edge.
Maximum points will also be awarded in the evaluation process to the applicants who have been supplying Government more than seven years without any negative reports.
Health officials over the past week admitted that the system is far from perfect as the majority of drugs are imported.
“There are many unanswered questions and if it is that this Government is priding itself with accountability and transparency, then the right thing…the correct thing to do will be to hold off. It is obvious the current system of storage, inventory and procurement is just not working. How do you explain almost $50M in wastage in one year?”
Ramjattan also pointed out that it is a major fact that other suppliers who were not pre-qualified had submitted bids for medicines and pharmaceuticals at far lower prices, in some cases, five to 10 times cheaper.
“Could you imagine the resultant impoverishment of the treasury and corresponding enrichment to New GPC! This is bloody larceny, but in the eyes of past and present PPP administrations it is economics. The little boy who picks your pocket for a $2,000 would have to go to jail. But this big company will be extolled as virtuous when over $2B is what it profits in a roughly similar activity.”