–PAC hears of discrepancies in purchase of COVID-19 supplies under coalition government

THE Ministry of Public Health and the Civil Defence Commission (CDC) did not procure COVID-19 supplies in an efficient manner, which led to major breaches of procurement laws under the APNU+AFC government, a Public Accounts Committee (PAC) meeting heard on Monday.

Speaking as a member of the PAC, Minister of Parliamentary Affairs and Governance, Gail Teixeira joined her fellow Members of Parliament (MPs) in raising serious concerns about the non-monitoring of the performance of contracts.

The Auditor General in his 2021 procurement, storage and distribution of COVID-19 supplies report, concluded that the Ministry of Public Health and the Civil Defence Commission did not procure COVID-19 supplies in an efficient manner.

“There was no monitoring of the performance of contracts, which resulted in millions of dollars of supplies being delivered close to a month after the delivery dates
had expired. In addition, the entities prepared Purchase Orders after receiving supplies. These findings made us conclude that the entities did not procure COVID-19 supplies in an efficient manner,” the report detailed.

The report found that from March to August 2020, the APNU+AFC government did not allocate a specific amount to meet COVID-19 expenditures. The Ministry of Public Health and the CDC met such expenditures from monthly releases under the line items.

As stated, the two entities spent over $1 billion to acquire COVID-19 supplies. In addition to the amount expended, both agencies received a significant amount of donations or gifts from local and international organisations.

Meanwhile, the CDC received cash donations totalling $45 million for the period. Suppliers delivered close to $400 million worth of goods a month late. In one instance, the ministry did not deduct penalty fees of close to $5 million.

During the PAC hearing, the Permanent Secretary of the Ministry of Health, Malcolm Watkins, and the CDC’s Director-General Colonel (Ret’d) Nazrul Hussain were questioned about the contents of the report.

Watkins took up the post in October 2020, while Hussain was appointed last year. Their predecessors were not present at the PAC meeting.

Teixeira said that she found it “strange” that the MoH and CDC had failed to follow the guidelines of the National Procurement and Tender Administration Board when preparing contracts.

She pointed out that contracts lacked key, essential elements such as start-and-end dates of the contracts.

The AG’s report found that nine contracts prepared by the CDC did not have such information which resulted in the CDC being unable to legally bind suppliers to a stipulated delivery period, resulting in delays on the part of suppliers.

In response to a question about this, Watkins said that among the reasons given was that due to COVID-19 “they were forced to be lenient with the delivery periods in order to get the product or service versus being too aggressive…”

He said that during that time, the issue was compounded by “circumstantial” issues and “poor management” of the contacts. The CDC Director-General conceded that the procurement laws were breached, but later noted that that situation was corrected.

MP Sanjeev Datadin questioned Hussain regarding the purchasing contract of Personal Protective Equipment (PPE) from China in March 2020.

“We haven’t seen a contract of purchase,” Hussain said in reply.

Teixeira, in commenting on this revelation, said: “But that’s a major breach of the procurement rule. In other words, it wasn’t single-sourced.”

POOR MANAGEMENT

Datadin later asked Watkins if any “due diligence” was done before the purchase from the suppliers.

Watkins in response said that there were a few instances when the ministry had engaged the supplier to deliver before engaging the tender board.

“We found no evidence of due diligence or any form of checks being done to properly evaluate the suppliers. But we would have to go case by case, but from my research, we did not find any first layer of due diligence,” Watkins said.

Teixeira said that she does not buy the argument that because of the emergency, they went “willy-nilly” purchasing all over the place without NPTAB approval.

“I do not think that reason is good enough and I think the PS (Permanent Secretary) has made it clear that there was poor management of the entire process of procurement that affected the supplies being available to the medical practitioners in the public hospital and other hospitals,” she said.

Watkins told the committee that they corrected the situation before the report was even published. He said he agreed with the AG’s conclusion.

The Audit Office had recommended that the MoH’s PS and CDC Director-General include a penalty clause in each contract and enforce the clause against delinquent suppliers.

It had also been recommended that the MoH and CDC engage the
Minister of Legal Affairs and other stakeholders to have the Procurement Act 2003 amended to include emergency-procurement policies and procedures.