Kaieteur News news item, Saturday 27 June 2009 - "Cabinet cannot waive tender procedure - Jagdeo" - http://www.kaieteurnewsonline.com/2009/06/27/cabinet-cannot-waive-tender-procedure-jagdeo/
Ministries can apply a waiver of the Tender Board procedures to source supplies once it is done within the confines of the law.
Yesterday, President Bharrat Jagdeo, in response to the recent reports that Cabinet was in violation of the Procurement Laws of Guyana, said that the procurement law clearly states that Cabinet acts on the recommendation of the Tender Board.
“We cannot say that if a recommendation comes from the tender board ‘we don’t approve with you and give it to the next person’,” the Head of State said.
He further explained that Cabinet can disagree with the Tender Board recommendation, by stating its reason and recommit the disagreement to the board.
This means, he said, that the technical processes have to be done at the levels of the Tender Board.
If a Ministry, the Head of State said, wants a waiver of Tender Board procedures, it has to get approval from that body and then send the waiver to Cabinet for ‘no objection.’ In such a case, the President said, the Ministry will have to go the tender process.
“We had a policy some years ago that the Ministry of Health will buy from the UN agencies because they offer us the lowest price internationally. Then several years ago we said that if the local producer could match the UN prices then (the health Ministry then can procure from them.” At the time, he noted, the only local producer was Guyana Pharmaceutical Corporation.
“The waiver of Tender Board procedures is to buy from UN alone, because they give low prices and if the local producers match those prices you buy here.”
Guyana’s procurement law gives a 10 percent margin of benefit for local suppliers.
In such a case, if the local person can bid even up to 10 percent above that margin, it can be favoured but in this particular case it does not work, since it is agreed in the case of Pharmaceutical that the company has to match the UN price or offer a lower cost.
According to the Head of State, the issue with the Ministry of Health has been resubmitted to the Tender Board and has been resolved.
He added that the law also allows for single sourcing.
Earlier in the week, the Permanent Secretary of the Ministry of Health, Hydar Ally, along with a team of officials from that Ministry appeared before the Parliamentary Public Accounts Committee to submit to scrutiny and to offer explanations for discrepancies highlighted in the 2006 Auditor General’s report.
One of the issues that featured prominently was the way in which the Ministry purchased its drugs, which according to shadow Finance Minister, Winston Murray, was in violation of the Procurement Laws of Guyana.
Ally told the House that the Ministry was not in violation of the procurement and provided the PAC with three letters from the National Procurement and Tender Administration.
According to Murray, Cabinet did not have the authority to waive the tender process that is outlined in the law. Today President Jagdeo said that Cabinet does not, that it simply offers no objections.
Murray noted that further directing the Ministry to purchase from the New GPC was a vexed issue.
When the issue was first raised by this newspaper in August last year, Health Minister, Dr. Leslie Ramsammy, had admitted that his Ministry made a mistake as it relates to the procurement process in purchasing drugs and medical supplies. The recent Auditor General’s report in question stated that the Georgetown Public Hospital Corporation (GPHC), which is now a separate entity from the Ministry of Health, continued to use the Ministry’s Cabinet approval to purchase drugs and medical supplies from specialised agencies, both locally and overseas.
In essence, the Health Ministry kept breaking the law when it did not seek the tender board’s approval for the purchase of drugs and medical supplies, totalling hundreds of millions of dollars, according to Murray.
But yesterday, President Jagdeo said that his government had nothing to do with the tender procedures, that every issue goes to tender.
The Auditor General report stated that the Health Ministry spent $608.4 million on drugs and medical supplies and could not “totally account for (these) drugs and medical supplies.” According to Minister Ramsammy, this has now been corrected.
The Auditor General’s report had also stated that, during 2006, amounts totalling $608.4 million was expended on drugs and medical supplies, for which the corporation could not give total accountability.