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Health Ministry signs off on $12.1B in drug contracts without vital penalty clauses – Audit Report
Kaieteur News – A performance audit of the Ministry of Health, conducted by the Auditor General’s Office has determined that between 2015 and 2018 the Ministry of Health entered into $12.132B contractual agreements with local and international contractors and/ suppliers that contained no performance criteria or penalty clauses.
This represents a blatant disregard for the Procurement Act 2003 which requires that suppliers or contractors whose tenders have been accepted sign written contracts that conforms to all tender regulations.
It is expected that the Ministry of Health and the Regional Democratic Councils (RDCs) effectively manage all contractual agreements with suppliers/contractors by preparing contracts that include performance criteria and penalty clauses.
The absence of such critical stipulations leaves the Ministry and the RDCs exposed and without recourse, should there be cases of unsatisfactory performance of suppliers.
All contracts between 2015 and 2018 were signed by the Permanent Secretary of the Ministry of Health and the suppliers, binding the parties to the terms and conditions of each contract.
The report said that the Ministry of Health entered into 318 contracts valued at $12.132B over three years – January 2015 to August 2018 – with suppliers and/ contractors.
Further, the Audit Office noted that the contracts did not include provisions to prevent delays by contractors nor measures to recover any overpayments. Specifically, the contracts had no start and end dates and penalty clauses.
However, the contracts included a clause stating that delivery will be made at the request of the Ministry.
The Audit Office said that the failure to include specified dates and penalty clauses in contracts denied the Ministry recourse from delinquent suppliers.
The Audit Office has recommended that the Accounting officers and Head of the Budget Agencies ensure that contracts include contractual terms and conditions that will protect the Ministry from delinquent suppliers.
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