A MINISTRY of Health audit of accounts for the financial year ended December 31, 2020 has revealed that a company, Tracon Construction and General Trading Ltd, delivered 30,000 SAR-Cov-2 Nucleic acid detection kits costing K9,435,000, five days before signing a contract.
According to an interim management letter on the audit of accounts for the Ministry of Health for the financial year ended December 31, 2020 and seen by News Diggers, Auditor General Dick Sichembe, who signed off the letter, stated that management should provide justification as to how the supplier delivered items prior to him being offered a contract.
The Auditor General stated that there was a risk of committing government to expensive contracts.
“Section 54 (2) (a) and (b) of the Public Procurement Act of 2008 states that “no contract, purchase order, letter of bid acceptance or other communication in any form conveying acceptance of a bid award of contract shall be issued prior to (a) an award decision by the appropriate approvals authority and (b) publication and dispatch of the notice of best evaluated bidder. Contrary to the regulation, it was observed that Tracon Construction and General Trading Ltd delivered the 30,000 SAR-Cov-2 Nucleic acid detection kits costing K9,435,000 on 19th August 2020, five days before signing the contract with MoH on 26th August 2020. Risk, there is risk of committing government to expensive contracts,” the Auditor General stated.
“Recommendation, the ministry should ensure that procurement guidelines are adhered to when committing government to contracts in order to guarantee value for money. Management should provide justification as to how the supplier delivered items prior to before him being offered a contract.”
The Auditor General also observed that the award of the said contract was unfair and uncompetitive due to cover bidding, which occurs when a competitor submits bids that are intended to be unsuccessful so that another conspirator could win the contract.
“Contract for supply and delivery of SAR-Cov-2 Nucleic Acid detection kits (contract no. MOH/SP/COVID-19/002/20-146) K9,435,000. On 6th August 2020, the Ministry of Health Procurement Unit using simplified bidding issued purchase inquiries for quotations of four suppliers for supply and delivery of 30,000 SAR-Cov2 Nucleic acid detection kits to help in the fight against the COVID-19 pandemic on 7th August 2020, four bidders responded. On 14th August 2020, MoH evaluation committee through its ministerial procurement committee paper no. 433 of 2020 evaluated four bids and recommended the awarding of the contract for supply and delivery of 30,000 SAR-Cov-2 Nucleic Acid detection kits to the lowest bidder, Tracon Construction and General Trading Ltd at a sum of K9,435,000 exclusive of VAT,” the Auditor General stated.
“In this regard, the ministry signed a contract with Tracon Construction and General trading Ltd to supply and deliver 30,000 test kits at a sum of K9,435,000 exclusive of VAT with a delivery period of two weeks. As of May 2021, no payment had been made to the supplier. The following were observed; cover bidding, unfair and uncompetitive procurements. Cover bidding occurs when a competitor submits bids that are intended to be unsuccessful so that another conspirator can win the contract.”
The letter further stated that out of the four bids submitted, two companies shared the same details.
“A scrutiny of the bids submitted revealed that out of the four bids, two were from two companies. Tracon Construction and General Trading and Bumu Applied Technologies Company Limited were connected to each other in that they shared the same details. In particular, two bidding companies shared the same postal address. Further, a search at PACRA, revealed that one director/ partner in Tracon Construction and General Trading is also a director/ partner and shareholder in Bumu Allied Technologies Company Limited. In this regard, the bid evaluation and award of the contract was both questionable and uncompetitive,” stated the letter.