THE Parliamentary Accounts Committee (PAC) has directed the Ministry of Health to avail Honeybee Pharmacy in today’s sitting so that the institution can better address questions related to the US$17 million contract which they won from the ministry.
PAC chairperson Howard Kunda also directed that the Zambia Bureau of Standards (ZABS) be brought before the committee.
Speaking when she appeared before PAC to answer to some audit queries, Ministry of Health permanent secretary in charge of administration Kakulubelwa Mulalelo attempted to justify why Honeybee was awarded a $17 million contract.
“…in our response, we did state that the evaluation committee found the submission by the supplier as being acceptable and we have been consistent in our response in that even in our submission to this committee, we have stated that the reason why the evaluation committee could not disqualify the bidder is that the solicitation document did not clearly define what should constitute evidence of having dealt with such products and further to this, in order for us not to have a similar occurrence, honourable chairperson, we have stated in our submission that we have written to the Zambia Public Procurement Authority that the standard solicitation document be reviewed so that issues such as this, because I did observe that because of the lack of clarity, the evaluation committee found the bidder responsive…,” Mulalelo said.
But PAC member Anthony Mumba said the documents attached to a bid needed to be analysed and wondered why Mulalelo was insisting that the power of attorney documents were not requested, saying there wouldn’t have been further questions on the matter if the ministry had bothered to do due diligence.
And in response, director of procurement at the ministry Wilson Lungu said that they did not do a full-fledged due diligence but based their decision to grant the contract on documents which were submitted by the bidder.
“So, in terms of fully fledged due diligence, chair, it was not undertaken. All that we used to arrive at the decision was the information that was submitted by the bidder and for those conversant, honourable chair, with the procurement process, post qualification is a form of desk due diligence, that’s what we limited ourselves to. Allow me to submit chair,” Lungu said.
Mulalelo then said that a total value of US$3.7 million worth of kits had been delivered to date from the initial contract amount.
“Honorable chairperson, like I stated, at the time of audit, there were three contracts that were alive and two of these contracts were under termination due to failure by two companies to provide performance bonds which left a balance of one contract and that is the one for Honeybee that has been performed to date and this is contained in our submission. The contract for Honeybee Pharmacy has a total of 22,500 kits attached to it. The value of the 22,500 kits is US$17 million. Out of this US$17 million, we have to date received a total value of US$3.7 million worth of kits as at the time of the audit,” Mulalelo said.
Kunda wondered why the PS was saying the contract had performed well despite delivery delays.
And in response, Mulalelo said in early 2020, Honeybee notified the ministry that it was changing suppliers due to some lockdown complications.
“During the audit process, and I think that is the reason why it has not been put as an observation or as a query by the Office of the Auditor General, there was correspondence from the supplier early in the year where they did give us notice that there would be delay in the supply of the kits mainly because the by-products for production of the pharmaceutical products under the kits were coming from Wuhan which at the time was under lockdown. Later on in the year, we also had India being under lockdown and hence there was a protracted delay in the supply of the health centre kits. You may wish to further note, honorable chairperson and honorable committee members, as contained in the submission, there was a further submission by the supplier to change the manufacturers because of the challenges that he was having in terms of obtaining these products from the suppliers or the manufacturers that were stated in the bid document mainly due to the challenges that were there in terms of the lockdowns due to the COVID-19 pandemic. So these challenges were given to us via written letters by the suppliers and these were forwarded also to the Auditor General’s office,” Mulalelo said.
And Lungu told the committee that his ministry was not trying to use COVID-19 as an excuse, but emphasised that the pandemic has truly wrecked havoc in a lot of sectors.
“Given the context, it was an emergency. We did the best we could, subjecting to everyone who participated to the due process to arrive at the decisions that are the reasons for this query. In terms of delivery, chair, the figures that are captured in the Auditor General’s report, we confirm that they are the true figures in terms of the pack delivery that has been made. It may sound like an excuse but the truth is that the coronavirus pandemic has wrecked unprecedented havoc globally and this havoc has not spared any sector,” said Lungu.
Meanwhile, Auditor General Dick Sichembe said the ministry had not submitted a stamped power of attorney document from Honeybee despite what they were presenting before the committee.
“Chair, like we indicated, from the process of auditing that we had with the ministry, they didn’t submit that information and under our engagement with the ministry, we had written to the ministry and there was no response and we have got the DAP where it was just quiet. Where we stand, this matter is still outstanding where as the correct position of the power of attorney. It becomes difficult for it to resurface now,” said Sichembe.
Kunda then wondered why the issue of power of attorney was being raised at this point when it was not even attached to the memorandum presented to the committee.
In response, Mulalelo said at the time the query was brought up, the ministry did not have the original document as the photocopy which was earlier submitted by the company did not show the stamp from the bidder’s law firm.
“The query on Honeybee Pharmacy came into the audit process after delivery, that was August, September, 2020 and I think that should have been at DAP stage, that’s when the queries came about and like I submitted, during the process of verifying the documents, we did notify the Office of the Auditor General and we did notify the oversight committee of not being in possession of the originals,” said Mulalelo.
Mulalelo also said the ministry had so far not paid anything towards the execution of the contract despite Honeybee having supplied part of the medical kits.
But dissatisfied by the responses provided by the ministry, Kunda ordered that Honeybee and ZABS be brought before PAC today.
“Looking at time and that we have not finished this issue of contract management in as far as this issue of Honeybee is concerned, from [page] 19 onwards, this issue is still going so maybe we can break off here and request that or should I say, demand that those that are being referred to like ZABS, it should be brought to appear before this committee tomorrow, with you PS. [Zambia Medicines Regulatory Authority] ZAMRA is here already appearing, Honeybee should come appear before this committee so that we can deal with this matter conclusively and we can deal with everything that is required to be dealt with,” ordered Kunda.