PAC hearing: No due diligence followed before purchasing COVID-19 supplies under APNU/AFC

– masks bought at inflated prices; no proper evaluation done of suppliers

The Public Accounts Committee (PAC) on Monday heard from officials in the Ministry of Health, that notwithstanding the COVID-19 pandemic, due diligence was not done under the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government when they purchased Personal Protective Equipment (PPE).

During the statutory sitting of the PAC, Ministry of Health Permanent Secretary Malcolm Watkins was asked about the findings of a performance audit. Auditor General Deodat Sharma had conducted a performance audit into the procurement, storage, and distribution of COVID-19 supplies.
It was found that PPE was purchased at exorbitant prices. And while they were purchased at the height of COVID, the Permanent Secretary said that no due diligence was done to find the best price. By the end of the year, at which time the People’s Progressive Party/Civic (PPP/C) had entered office, they were able to purchase PPE in a competitive process, at a significantly lesser price.
“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,” he said.
According to Watkins, more effort could have been made to seek the best price. In fact, the Permanent Secretary opined that a strategic effort was made not to do a public tender. Further, he gave a breakdown of the price at which they purchased PPE, versus how much it was purchased before the change of Government in August 2020.
“We can confirm that the items purchased during that time, the COVID related, we know that some were delivered beyond the contract period. If we use the example of the mask, which were the main items, we see the prices for masks were averaging about $7.50 per mask. This is the KN-95 mask. In November when I took over, we did a public tender for masks and we paid ?83.”
“So, you’d have to consider scarcity. But it’s a very big difference in cost, versus what we paid. For example, 10,000 masks were $15 million at $7.50 a mask. And we bought more of course. But we only paid ?83 in a competitive process,” Watkins further explained.
The first case of COVID-19 in Guyana was recorded in March 2020. During the Performance Audit, the Auditor General had found that approval from the National Procurement and Tender Administration Board (NPTAB) was not sought to sole source supplies in several instances.
Despite requirements that entities can only sole source if they do due diligence on the supplier and approach NPTAB for approval, after which they would get an acceptance letter, the audit had found that 18 of the sole-sourced contracts did not go through this process.
It was also found that nine of the contracts for COVID-19 suppliers, which were prepared by the Civil Defence Commission (CDC) did not have a start and end date by which time the supplier was required to deliver the items. According to the report, this would have made it difficult for the CDC to enforce the law should the supplier be delayed.
Last year when the Auditor General presented his 2021 report to the Speaker of the National Assembly, Manzoor Nadir, five performance audit reports had also been handed over. They include the reports on the management of medical waste at hospitals; management of drugs and medical supplies at the ministry of public health and regional health facilities; receipt, storage, and distribution of textbooks at schools; review of training programmes established and developed by the council of technical and vocational education and training; and Guyana’s preparedness for marine oil spill response.