$367M HDM Labs Inc. contract smacks of corruption

Aug 13, 2018 News

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– Former Health Minister calls for probe

Former Health Minister, Dr. Frank Anthony said there are many discrepancies in the narrative provided by Minster of Public Health, Volda Lawrence over the $367M contract awarded to HDM Labs Inc.
According to Dr. Anthony, the revelations surrounding the contract make a mockery of the government’s claim that it is fighting corruption, while, on the contrary, it seems that they are actively involved.
“If they are not involved in corruption, then they should have no problem with the various statutory agencies investigating this matter urgently and thoroughly,” Dr. Anthony told Kaieteur News.
“I therefore call on the Public Procurement Commission (PPC) to launch an immediate investigation into the multiple breaches of the Procurement Act and those culpable must be brought to justice.”
He also called on the Auditor General’s Office to carry out a value for money audit to determine whether the medicines acquired by the Ministry of Public Health through this arrangement gave the Guyanese people the best value for their tax dollars.
Dr. Anthony stated that the Government Analyst Food and Drug Department (GA-FDD) must immediately investigate the quality of medication to determine if it met the minimum safety standards.
Providing a sequence of events based on information provided by the Minister and press reports, Dr. Anthony explained that in the first restrictive tender, of the six companies that were requested to bid, only three submitted bids.
These included the International Pharmaceutical Agency (IPA), Caribbean Medical Supplies (CMS) and ANSA Mcal Trading Limited (AMTL). Although HDM Labs Inc. was requested to submit a bid, this was not done in the first round of restrictive tenders.

He stated that it is instructive that of the three companies that submitted bids, IPA, Caribbean Medical Suppliers, ANSA Mcal Trading Limited (AMTL) were all disqualified.
Dr. Anthony, the Opposition’s Shadow Minister of Health, noted press reports that IPA’s bid was $187M; Caribbean Medical Suppliers, $95.5M; while ANSA Mcal Trading Limited (AMTL) was for $190.6M.
Having disqualified the three responsive bidders in the first round, Dr. Anthony noted that the Ministry of Public Health requested permission from the National Procurement and Tender Administration Board (NPTAB) on June 30, 2017, for a second round of restrictive tendering.
The same six companies were requested to submit new bids within six days.
However, Dr. Anthony noted that press reports show that the Ministry of Public Health wrote HDM Lab Inc. on June 16, 2017 to ascertain whether they were able to supply specific pharmaceutical items.
Dr. Anthony cited that on June19, 2017, the Ministry of Health’s Permanent Secretary wrote to NPTAB requesting sole sourcing to HDM Lab Inc.
On June 20, 2017, the Permanent Secretary wrote to HDM Labs Inc. informing them of an award.
“If this is the case, then there is a clear breach of the procurement process, where a company was handpicked for the job,” Dr. Anthony noted.
Dr. Anthony stated that he had submitted questions to Minister Lawrence on July 17, 2018 to elucidate some of these matters.
But the Minister using the Government’s majority in Parliament was granted a request to have her answers deferred. Parliament is currently in recess until October 10.
There are reports that HDM Labs, owned solely by US-based Guyanese Hardatt Singh, never did any prior business in Guyana since it was set up in 2012.
The companies which participated in the restrictive bid process failed various requirements. Interestingly, one of the requirements was technical capacity. Companies needed to have carried out similar transactions before.
It is not clear how HDM passed this requirement. But from all indications, the evaluation that disqualified other companies was not applied to this company.
CONSEQUENCES
Dr. Anthony noted that there seem to be several consequences that have flowed from the reckless action of the Ministry of Public Health.
The first, he stated, is a clear breach of the Procurement Act Section 26 (1) on restrictive tendering.
In round two, while the Ministry of Public Health claims that they had restrictive tendering, the evidence, according to Dr. Anthony, is suggesting that there was sole sourcing from HDM Labs.
He stated that the GA-FDD needs to assure the nation, that the medications brought through this contract has met its regulatory standards, and provide the evidence to show that this company was licensed to import, and had met the necessary regulatory standards.
Further, Dr. Anthony noted that HDM Labs were awarded a contract of $366.8M which is $271.3M more than the bid from Caribbean Medical Suppliers Inc.; $179.8M more than International Pharmaceutical Agency’s bid; $176.2M dollars more than the Ansa Mcal bid.
“These are clear indication that taxpayers of this country did not get value for their monies,” Dr. Anthony stated.

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