Pharma procurement scandal widens in Guyana

…as Govt splits more contracts to avoid public tendering

The Guyana Government is being accused of cheating the bidding system by splitting pharmaceuticals contracts below the stipulated limit to bypass the transparent process of public tendering in order to award contracts to favoured suppliers.

Records show that some G$4.4 billion has been collectively awarded for the purchase of drugs without public tendering by handing out multiple contracts valued less than the limit to preferred suppliers.

In some cases, suppliers have received more than 10 lesser contracts in just one day in an attempt to avoid the public tendering system. Guyana Times International has been shown documentation which illustrated how the contracts were split. Notably, another major Trinidadian company is in the midst of this new scheme to avoid public tendering. The Trinidadian company received up to 11 contracts from the Government on March 22, 2016 which collectively were valued some G$2.3 million. The same firm also benefited from five contracts on April 14, 2016 which were worth a total of G$1.7 million. Additionally, the same company also received five additional contracts valuing some G$630,000 on May 10, 2016.

The trend persisted throughout the entire year and other companies, both local and international, including those with known connections to the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition Administration benefited.

This practice flies in the face of the Procurement Act, which stipulates that “a procuring entity shall not split or cause to split contracts or divide or cause to divide its procurement into separate contracts where the sole purpose for doing so is to avoid the application of any provision of this Act or any regulations made thereunder.”

Commenting on the issue during his press conference on Monday, Opposition Leader Bharrat Jagdeo exclaimed that this was the first time in the country’s history that such a situation has been occurring.

Jagdeo noted that between January 2016 and February 2017, some G$4.8 billion was spent on the purchase of drugs and medical supplies, but less than G$400 million went to public tender.

The scandal in pharmaceuticals procurement first broke when the Public Health Ministry came under fire for awarding a G$605 million drug contract without public tendering to ANSA McAL – a Trinidadian firm, ostensibly because of an “emergency”. The prices for the drugs supplied were at least twice the market rates.

That company then donated what is now called the “Pharma Arch”, which was recently erected on the Rupert Craig Highway – at a cost of G$20 million.

Jagdeo reminded that the APNU/AFC had vigorously accused the previous Administration of sole-sourcing drugs by avoiding the public tendering system.

But the former President noted that the People’s Progressive Party/Civic (PPP/C) Administration had implemented the prequalification system that was modelled after international standards such as those of the World Health Organisation (WHO); United Nations Development Programme (UNDP); the Pan-American Health Organisation (PAHO) and United Nations Children’s Emergency Fund (UNICEF).

Such a mechanism ensures that quality drugs were steadily available for mass public consumption at competitive world market prices, the absence of which would invariably lead to shortages of drugs, since there were no direct established supply chains with companies that are prequalified to deliver the requisite drugs needed.