P900 million tender scandal rocks Health Ministry

Nicholas Mokwena - BG reporter
Wednesday, 06 March 2019
P900 million tender scandal rocks Health Ministry

The Ministry of Health and Wellness has been hit by a tender procedure scandal involving millions of Pula, Botswana Guardian has learnt. The scandal which could open a can of worms relates to a P900-million tender which the ministry awarded on 18th December 2018 for the supply of laboratory and diagnostics equipment. The tender award has caused an uproar.

Many unsuccessful bidders have raised complains at the way an invitation to tender (ITT) was designed and the tender evaluated. ITT is the initial step in competitive tendering, in which suppliers and contractors are invited to provide offers for supply or service contracts. An ITT document specifies all requirements of the organisation, including goods, services and timelines, as well as the evaluation process that will be followed. Invitations to tender are often used by public sector organisations, which are legally obligated to offer contracts for goods or service requirements by that process in many countries.

There are allegations that one of the bidders’ Orthosurge (Pty) Ltd colluded with some officials within the ministry to have the ITT designed to suit the company. The company (Orthosurge) is found in the business of laboratory equipment, medical services, Pharmaceuticals, Pharmaceutical wholesalers and veterinary products. This publication has learnt that the ITT was designed in a biased manner contrary to PPADB Act which requires ITT specifications to be unbiased and competitive. A source within the ministry who intends to remain anonymous confirmed to this publication that “the ITT specifications were written for and by Orthosurge. What they did is to make sure that the technical specifications are crafted in a manner that only Orthosurge would pass the technical qualifications stage”.

A bidder that fails the technical stage does not proceed to the financial comparison stage. If in a situation only one bidder passes the technical stage, the bidder has no competition in financial comparison and is likely to charge exorbitant prices, said another source at the ministry.  “Orthosurge has been ripping off the government by supplying overpriced equipment and reagents for years. They are able to do this because the ITTs are designed for them. To give an example, Orthosurge was awarded a simple Automated Blood grouping machine for BWP110 million whilst the market value of the machine is around BWP5 million. That is a profit of a whooping 105 million pula and an insane markup of 2100 percent (two thousand one hundred percent),” said the source. Both the ministry and Orthosurge did not respond to these allegations.

When asked why the ITTs would be designed to suit Orthosurge, the source explained that “Orthosurge is colluding with one of the ministry’s senior Biomedical Engineers to do this for them”.  The wrongdoings didn’t go well with other staff members in Clinical Services department of MOHW. Another senior Biomedical Engineer is said to have been transferred from the ministry after he raised discontent at the specifications of the ITT. The source added “many bidders wrote queries on the specifications before the closing of the tender but their queries were largely ignored”. The PPADB Act requires that all queries are well answered before the closing of the tender.

To add to the ITT manipulation there are allegations that during evaluation two very competitive bidders were disqualified on “baseless grounds” that they had a common shareholder. Declaration by shareholder’s form in the ITT has a note that reads “In the case of competing franchises, the franchises may bid for the same item but with different products.  Item means the commodity required by the procuring entity indicated in the ITT. Product means the commodity offered by the bidder”. The source explained that “the colluding officials influenced the evaluation committee to disqualify the two bidders citing collusion. However, it is fully legal for two companies to have a common shareholder as long as they are not bidding for the same item with the same brand”. 

Both the ministry and Orthosurge have not responded to questionnaires sent to them on the 22nd January 2019 even after follow-ups were made regarding the questionnaires. Oremeng Motshegare of Orthosurge had on the 23rd of January 2019 told this reporter that he was out of the country and would only be in office on the 11th of February this year. He requested that he be given the opportunity to return from his international trip before he could respond to the questions.
When approached a fortnight ago Motshegare proposed for a meeting but he would later respond via WhatsApp that he does not think it would make sense to meet because PPADB has since dismissed one of the bidders for the tender. He was however requested to respond to the questionnaire because its focus is about the ITT, but at press time this week he had not responded. 

Health Ministry Principal Public Relations Officer Doreen Motshegwa said her superiors have demanded for a meeting between this reporter and officials from Orthosurge before responding to the questions. She had however earlier indicated that the answers were ready and they were awaiting one of her principals to append a signature before they could be sent. “My principal has demanded that I round-up everyone involved including you and officials from the affected company for a meeting. I will give you the appropriate date for the meeting next week,” said Motshegwa last week. It was however made clear to her that the questions sent do not warrant any meeting between this publication, the ministry and Orthosurge. She stated that the paper can go ahead with the story the ministry would respond thereafter. Motshegwa said she is engaging both the Permanent Secretary and the Deputy Permanent Secretary on the matter.

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