New Guyana Pharmaceutical Corporation (NGPC) supplied $3.4B worth of drugs to the Ministry of Health and the Georgetown Public Hospital Corporation (GPHC) – 80% of the combined needs of the two entities in 2011.
The 2011 report of the Auditor General on the Public Accounts of Guyana provided a breakdown of the allocations. In respect of GPHC, NGPC supplied $1.2B of its $1.6B requirements. The next highest supplier was Docol-Medical Gas at $142,068.
In relation to the Ministry of Health, NGPC supplied $2.12B of its $2.66B requirements. The next highest supplier was the Pan American Health Organisation at $131,198.
In previous years the Auditor General had commented on various aspects of contracts awarded to NGPC.
In relation to the GPHC, the Auditor General’s report said that $1.294B was paid to NGPC pertaining to 10 major contracts and other minor contracts. The report noted that the major contracts had an aggregated value of $1.355B of which $1.275B was paid during the year. “In this regard, the NEW GPC Inc. had not delivered orders valued at $140.925M. However, one contract with a balance of $80.027M was terminated and this adjusted the balance to $60.898M”, the report said. Of the balance outstanding, the Auditor General’s report said that $58.12M worth of supplies were delivered this year to the hospital, leaving a balance of $2.778M still to be supplied.
In its discussion of the Ministry of Health contracts, the report said that on 30 December 2010, Cabinet gave its no objection to two suppliers for the Ministry of Health and signalled that international agencies engaged in drug procurement would continue to enjoy their pre-qualified status. The Auditor General’s report said that evidence was also seen where on 31st December 2010, the National Procurement and Tender Administration Board (NPTAB) issued an award for New GPC and Medpharm to be pre-qualified to supply drugs and medical supplies for the period January 1st, 2011 to December 31st, 2011. This award by the NPTAB came just one day after Cabinet had granted its no-objection to NGPC and Medpharm. The Auditor General’s report averred that the “award was noted to have been made on the basis of competitive bidding following public advertisement”. Even though Medpharm was pre-qualified, it clinched only $7.9M worth of contracts compared to NGPC’s $2.12B.
Ministry of Health
The Auditor General’s report said that for the Ministry of Health, there were nine contracts valued at $2.12B which were supported by NGPC-issued bank guarantees to the value of $1.8B. The report noted that these guarantees had expired at the end of 2011 with outstanding obligations for supplies worth $88.1M. In relation to outstanding deliveries worth $85.5M for the years 2009 and 2010, the 2011 report said that these were cleared at the time of reporting in September 2012. However, the report asserted that in relation to 2008, the Ministry of Health is still to furnish evidence to support deliveries valued at $79.2M.
In its response to the Auditor General’s report and contained within, the Ministry of Health said that NGPC is in a position to make delivery for the contracts for 2011 but because the ministry’s Materials Management Unit was in the process of relocating, the ministry had put a hold on the items to be delivered. The ministry added that with reference to the 2008 contracts, these were fully supplied by NGPC but that the documentation to support the deliveries were obliterated in the fire that razed the Ministry of Health. Efforts were however being made to obtain copies of all documentation from the supplier.
2010 report
The pre-qualification of NGPC for the 2011 contracts was aimed at staving off criticisms that had been made of the process in the 2010 report. Then, the Auditor General’s report had said that in relation to the GPHC contracts, that a “A waiver of tender procedures was granted by the NPTAB to allow the purchases from New GPC Ltd. As such, competitive bidding, occasioned by public advertisement, as required by the provisions of the Procurement Act (2003) was not undertaken. In this regard, that waiver was noted to have expired on 30 June 2010 following which orders did not satisfy stipulated tender procedures. A similar situation existed in 2009, when the corporation purchased drugs and medical supplies valuing $812.766M without competitive bidding. Nonetheless it was noted that corrective action was taken in 2011”.
The hospital’s response to this was that the process of seeking approval required by the Procurement Act was undertaken by the Materials Management Unit of the Ministry of Health.
The Audit Office’s recommendation then was that the GPHC put systems in place to ensure the strict adherence to Sections 26 and 27 of the Procurement Act (2003) in relation to the tendering process while making certain that all medical supplies are delivered in keeping with the terms and conditions of contracts.
Where it related to the Ministry of Health, the 2010 report of the Auditor General had also complained about contracts awarded to NGPC on the basis of sole sourcing.
Said the report “During 2010, the Ministry expended amounts totalling $1.546 billion for drugs and medical supplies. Of this sum, an amount of $1.252 billion was paid to New GPC Ltd, after approvals were obtained from the NPTAB for contracts awarded. The award were however made on the basis of sole sourcing and not competitive bidding, occasioned by public advertisement. This therefore could not justifiably be considered a fulfillment of the tenets of the Procurement Act (2003). A similar situation existed in 2009. The difference of $293.558M was paid to the other suppliers”.
The Ministry’s response to this was that it had advertised for the pre-qualification of suppliers for medicine and medical supplies in compliance with Sections 26 and 27 of the Procurement Act, the expressions of interest for bids were opened on November 23rd and award was made by the NPTAB.
In recent years, both the AFC and the PNCR have raised questions about the basis on which drug awards have been made to NGPC.
