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Ghana should repay $3.8 million to Global Fund in faulty condom deal


Lauren Gelfand
December 11,  2014

condoms1

 

 

Tender for more than 120 million condoms was riddled with fraud — and the goods were bad

Ghana’s Ministry of Health spent some $3.8 million of a Global Fund grant on faulty condoms procured in a tender that was riddled with fraud, the Office of the Inspector General has found. In addition to developing a plan to recover the funds, the Secretariat will be placing all purchasing for Ghana under the pooled procurement mechanism and requiring greater oversight by the local fund agent.

The investigation report published on 11 December confirmed that the procurement of 128 million male condoms purchased for the Ghana Health Service between 2010 and 2013 were “substandard, over-priced and bought through a non-competitive tender process involving forged documents”.

The tendering process was flawed from the outset, according to the report. Advertised only locally for a very short time period, the bid was whittled down to a single source with the immediate disqualification of two other bidders. An evaluation by the Ghana Central Tender Board was not reviewed, making the process decidedly untransparent.

Only a month after the bid was approved, the MoH agreed to a 35% per unit cost increase — an increase worth nearly $1 million over what had been a fixed-price contract that was ostensibly not subject to adjustments. According to the investigation, there is no evidence that the supplier, Global Unilink, provided the Ghana Health Service with documentation including market-pricing data to justify the price increase.

Moreover, the tender was predicated on the provision of falsified documents. Global Unilink provided misleading information related to where the condoms were manufactured, including a falsified manufacturer’s certificates that declared the condom manufacturer was WHO-certified.

This led to the other major problem: the condoms were of decidedly inferior quality. The investigation confirmed that the supplier did not source the product from a WHO-certified manufacturer, as it had been contracted to do. The purchased prophylactics did not meet WHO specifications or standards, even though the samples submitted during the tender for quality tests did come from a WHO-certified manufacturer. What this means is that quality condoms were provided for testing and low-quality ones supplied for use.

These quality issues came to light when end users reported that they burst too easily, did not contain enough lubricant and, according to one Ghanaian media report, were not big enough.

Why the Ghana Health Service failed to continue to carry out quality control tests on the Be Safe condoms remains to be seen; going forward, Aidspan understands from the Global Fund Secretariat: “the Secretariat will provide the Ghana Food and Drug Authority with advance notice of the dispatch of critical health products and commodities procured for Global Fund programs from whatever source. The LFA will verify the quality testing has been conducted before distribution.”

Other safeguards have been put in place, specifically related to the procurement of health products and commodities for Ghana. Since 2012, Ghana has been enrolled in the pooled procurement mechanism and global drug facility, meaning that ARVs, HIV test kits, drugs and diagnostic kits for malaria and TB drugs are all now procured by the Global Fund on Ghana’s behalf. The MoH is now only responsible for the procurement of products such as gloves and cotton swabs.

The Secretariat should pursue the recovery of the full $3.84 million spent on the faulty condoms — funds that Ghana itself has since 2013 been seeking from the supplier, Global Unilink, according to Ghanaian media reports.

A majority of the faulty condoms remain undistributed, stored in an MoH warehouse that, itself, has been subject to major scrutiny for the poor quality and conditions. In one Ghanaian media report, the facility was described as having a leaky roof and poor temperature controls — less than ideal conditions even at the best of times. The condoms are to be withdrawn and destroyed by the MoH and Ghana Health Service in line with “international procedural and environmental regulations” — whether this will happen is unclear.

Ghana has a generalized HIV prevalence rate of under 2% but within certain key populations, including commercial sex workers and men who have sex with men, the rate is considerably higher. Results from a demographic and health survey supported by the Global Fund should be published in 2015: the best way to determine whether there has been an increase in infection rates. It will not, however, be possible, to make any causatory inference that a spike in infections is due to the use of these problematic prophylactics.

Op-Ed: We’re withdrawing from the Arms Procurement Commission, and here’s why


Daily Maverick

By A FEINSTEIN, P HOLDEN AND H VAN VUUREN

August 29, 2014

The Arms Deal was a uniquely damaging moment in our young democratic history. It was concluded after decades of uncontrolled spending on foreign and internal wars by the apartheid regime. From the signing of the contracts in 1999 up to R70 billion of public money continues to be spent on weapons of questionable utility. The country was not and is not facing any meaningful military threat. But rather the most pressing problems that faced us then as they do now are inequality, poverty and unemployment

Since its inception the Arms Deal has been dogged by well supported allegations of corruption. We together with many other activists have consistently challenged the State to fully investigate and prosecute these allegations. Four previous investigations have failed to fully probe the Arms Deal.

We have engaged with these matters in different capacities over many years and we have done this out of the commitment to the primacy of the Constitution and the rule of law in our democracy. Given this commitment we believe that all allegations of corruption must be investigated and prosecuted without fear and favour.

After careful consideration, with great disappointment we have decided to withdraw all participation in the Seriti Commission of Inquiry into the R70 billion Arms Deal.

The appointment of the Commission raised great expectations that the truth would finally be established, and that this would challenge the interests of politicians, middlemen and large corporations in one of the most corrupt industries in the world. The Commission had the prospect of serving not only South Africans but all people across the globe campaigning against the devastating impact of corruption in the arms trade.

The Commission has failed on both accounts. It has missed a historic opportunity to support the struggle for transparency and accountability of the powerful.

We have not made our decision lightly. It follows nearly two years of actively trying to support the work of the Commission, assisted by an exceptional pro bono legal team led by Lawyers for Human Rights.

We have taken our decision due to serious and fatal concerns we have regarding the manner in which the Commission has conducted itself. There are four key reasons why we have decided to withdraw:

  1. The Chairman, Judge Willie Seriti, indicated that he was not interested in hearing evidence from witnesses about documents that they had not themselves written. Judge Seriti made this ruling during the testimony of Member of Parliament Mr David Maynier. This prevented Mr Maynier from giving any substantive evidence, as he was not the author of documents that emanated from investigations or government departments. This is particularly disturbing as this limitation was not applied to previous witnesses who were supportive of the Arms Deal. The implication of this ruling is that only those who have been involved in the Arms Deal can introduce evidence. How the Commission intends to discover the truth by only hearing from participants in the Deal is a mystery.

The Chair has also ruled that witnesses should only speak to corruption allegations of which they have personal knowledge. The logical conclusion of this ruling is that only those who have been corrupted, who have corrupted others, or who were intermediaries in such corruption, can give evidence of it. It is obvious that all of these parties have an interest in hiding the truth. Why would the Chair choose to rely solely on their opinions?

We have conducted extensive research into the Arms Deal. We have analysed thousands of documents, and interviewed people who are able to point to where evidence of corruption is likely to be found. We were not direct participants in the Arms Deal. If we are not allowed to talk to documents that we have not written, nor speak to corruption allegations based on documentary evidence, there is no point in our appearing as witnesses. This process will serve to undermine the critics without addressing the evidence they have accumulated. This can only serve to protect the corrupt and compromised.

In response to our attempt to resolve this issue, the Commission has informed us in their correspondence of 27 August 2014 that “The decision [to admit evidence of which a witness not the author, nor facts within a witness’ personal knowledge] will be influenced by the circumstances of each case, including the document’s relevance to the terms of reference and the purpose for which it is sought to be used.” There is no basis on which we can have any expectation that we will be permitted to give evidence on matters not within our personal knowledge, and rely on documents we are not the authors of. The Commission’s rulings to date in respect of other ‘critic’ witnesses, and the Commission’s rulings to date in respect of our cross-examination of other witnesses, clearly indicate the contrary. The Commission has not undertaken that it will now reverse its previous approach. (If it did so, procedural fairness would require the recall of a number of witnesses). Read more here.

Tanzania to prepare strategy to implement National Public Procurement Policy


SupplyManagement

28 June 2014 | Gurjit Degun

The government of Tanzania is to prepare a strategy for implementing the National Public Procurement Policy (NPPP), according to the Public Procurement Regulatory Authority (PPRA).

Finance minister Saada Mkuya said the department has prepared the NPPP “as one of the tools to monitor the public procurement system in the country”. It has worked with the PPRA to prepare the action plan.

In her budget speech earlier this month, Mkuya said over the next financial year, the government “will continue to administer the implementation of the Public Procurement Act No. 7 of 2011 that came into force in December 2013”.

She said the Act should address challenges experienced during the implementation of the Public Procurement Act of 2004. This includes “the overly long procurement process and the high prices of goods and services procured through the public procurement system as compared to the actual market prices”.

Mkuya also announced the government will use bulk purchasing to “control public expenditure and ensure value for money”. The process will see the government buying goods and services directly from suppliers instead of its current method of using agents.

“To begin with, all vehicles and ICT Equipment will be procured through bulk procurement,” she said. “Given the large volume of fuel used in vehicles and machinery, the government will install an electronic system that will be used in purchasing, storing and selling of fuel in order to ensure value for money in these transactions.”

South African government aims to buy three quarters of goods and services locally


SupplyManagement

18 June 2014 | Gurjit Degun

The South African government is to promote local procurement by buying 75 per cent of goods and services from producers in the country.

Speaking at the joint sitting of parliament in Cape Town for his state of the nation address, South Africa’s president Jacob Zuma also said the government wants to increase domestic production.

He also plans to address weaknesses in procurement, management and operations systems “that undermine the efficiency and effectiveness of government.” Zuma said this will be done by centralising procurement under the Office of the Chief Procurement Officer in the National Treasury, which is already under way.

“We have begun piloting this new approach with the centralised procurement of school furniture in the Eastern Cape,” he said. “The furniture will be delivered in all Eastern Cape schools by the middle of August 2014.

“Measures will be introduced to prevent public servants and public representatives from doing business with the state.

“These will be supported by improved implementation of the Financial Disclosure Framework, strengthened protection of whistle-blowers, and the provision of technical assistance to departments for the effective management of discipline.”

Zuma also said the government needs to come up with “innovative” ways to “fast-track procurement and delivery by government in the energy sector.”

South Africa: SCOPA must investigate Hitachi’s govt contracts


PoliticsWeb

Natasha Michael
March 3, 2014
DA MP says Chancellor House’s sale of its shares in company has made this a matter of urgency. Parliament must intervene in Hitachi debacle.

The DA will be writing to the chairperson of the Standing Committee on Public Accounts (SCOPA) requesting him to urgently lead an investigation into all Hitachi Power Africa and government contracts and deals in the last five years.

The recent revelation that Chancellor House – the ANC’s business wing which partially owns Hitachi – has opted to sell its shares in Hitachi Power Africa for an “undisclosed amount”, has made this a matter of urgency and is very questionable.

This is because Hitachi is the company that was not only awarded the contracts of R38 billion to install boilers at the Medupi and Kusile power stations. But those projects have been delayed because of many mistakes and bungles by contractors, including Hitachi itself. Medupi is not yet even close to being complete, and Kusile has only just begun.

In the wake of the delays at Medupi, the DA made efforts to establish the cause for the delays. All efforts to obtain such information however have subsequently been shut down at every turn.

For years the DA has been saying that there is a clear conflict of interest and corruption for President Jacob Zuma’s ANC to be making money off government contracts. That is corruption, plain and simple.

It is simply unacceptable that the ANC is allowed to dubiously award itself a R38 billion contract, make a mess of the project at Medupi – putting South Africa’s energy supply at risk – and then deciding to cash in whenever it pleases, all at the cost of millions of people.

If Parliament is determined to represent its people and ensure transparency in public contracts, Chairperson Godi must urgently call on Minister Gigaba to bring all contracts between Hitachi and the government in the last five years before the committee. SCOPA must ensure this happens without delay.

I will, alongside the DA representative on SCOPA, Dion George ensure that Chairperson Godi does not ignore our calls for Hitachi to be brought to account without fail.

This is not a good story for the people of South Africa, and the truth must be made known.

Statement issued by Natasha Michael MP, DA Shadow Minister of Public Enterprises, March 3 2014

Swaziland finance minister announces procurement reform


Supply Management

29 February 2012 | Angeline Albert

This year, the Swaziland government plans to introduce a public procurement agency to oversee the purchasing carried out by public bodies.

In this national budget speech, finance minister Majozi Sithole said that the Swaziland Public Procurement Regulatory Agency will be created in the 2012/13 financial year.

As well as overseeing public purchasing, the agency will provide an independent forum to assess suppliers’ complaints. In addition, a code of conduct for public sector procurement officials will also be adopted.

The changes come as a result of the country’s Procurement Act of 2010, which gained assent from His Majesty King Mswati III last year. The act also disqualifies public sector workers and politicians from supplying government with goods and services.

In his budget speech, Sithole said: “Government understands that improving public procurement can generate savings without compromising services to the public. It is also an area prone to corruption. That is why we have a new procurement act. In 2012, the government will apply the changes required.”

The minister emphasized the need for stronger fiscal discipline in government by investing in cost-saving policies, improving procurement and public finance management and fighting corruption.

SA watchdog slams ‘flawed and unlawful’ procurement process


Supply Management

By Will Green

September 8, 2013

The public protector in South Africa has called for cash to be recovered after R15 million ($1.5 million) was “irregularly spent” in the procurement of legal services.

Thuli Madonsela said the amounts charged by legal firm Morake Inc were “unconscionable” for services provided to the Department of Finance of the North West Provincial Government (NWPG).

Morake was appointed in connection with disciplinary action against three employees in 2011, but an investigation by the public protector found R500,000 ($49,530) was spent just drafting charges against the trio.

Madonsela said the procurement process was “flawed, unlawful and in violation of the constitution and the National Treasury regulations” and said disciplinary action should be taken against all the officials involved.

A related investigation is taking place concerning a member of the executive committee of the NWPG and their relationship with Morake, while Madonsela said action should be taken against the attorney in the case if misconduct is discovered.

The public protector, the Public Service Commission, the auditor-general and the South African Police have all been asked to investigate the matter by the North West Standing Committee on Public Accounts (SCOPA).

Madonsela said: “Morake Inc were initially procured for half a million for drafting the charges, thereafter their services were expanded. That was irregular. Morake Inc further double-charged the department on some of the invoices, particularly for travelling.

The law society should check the billing by Morake Inc and check if this was consistent with professional requirements, and if any money was overbilled it should be repaid, and if there was misconduct by the attorney in this regard it should be dealt with, because this was a junior attorney with four years’ experience.”

SCOPA chairman Hlomane Chauke said the committee was “happy” with the report.

“This matter will not end here, things that need to be referred to police will be. Both the speaker and the premier will receive a copy of the report and it will be tabled in the provincial legislature.”

Morake Inc could not be reached for a comment, and SM is awaiting a response from the NWPG

South Africa: Mbeki, Manuel to give evidence in arms probe


The Citizen

July 16th, SAPA

Former president Thabo Mbeki will testify as a witness in the first phase of the Arms Procurement Commission, it was announced.

The commission, which is probing the R70 billion arms procurement deal, will hold public hearings from August 5 until January 31, subject to President Jacob Zuma granting an extension beyond November, spokesman William Baloyi said in a statement on Monday.

Mbeki and Minister in the Presidency Trevor Manuel were set to testify in the second half of January.

Baloyi said the first phase of the commission would “deal with the rationale for the Strategic Defence Procurement Package”, and whether the arms and equipment acquired were under-utilised or not utilised at all.

The first witnesses would be navy and air force officials. Armscor witnesses would be named later.

Former Intelligence Minister Ronnie Kasrils and Congress of the People president Mosiuoa Lekota would be called as witnesses between September 30 and October 4, followed by department of trade and industry officials until November 11.

Former Public Enterprises Minister Alec Erwin was expected to testify for three days in November, followed by National Treasury officials until the end of that month.

“It is also important to note that the programme is not cast in stone and circumstances prevailing at the hearings may require that it be adapted or altered, and this may also effect the sequence of witnesses,” Baloyi said.

“Some of the witnesses may be recalled at a later stage, when the commission deals with the terms of reference relating to allegations of impropriety, fraud and corruption in the acquisition process, a phase in which the ‘whistleblowers’ and those who are implicated will feature.”

The commission would be held in the council chambers of the Sammy Marks Conference Centre in Pretoria.

The deal, which was initially estimated to cost R43 million, has dogged South Africa’s politics since it was signed in 1999, after then Pan Africanist Congress MP Patricia de Lille raised allegations of corruption in Parliament.

Zuma himself was once charged with corruption after his financial adviser Schabir Shaik, who had a tender to supply part of the requirements, was found to have facilitated a bribe for him from a French arms company.

The charges against Zuma were later dropped.

99 percent of Ugandan contracts over budget


SupplyManagement

2 July 2013 | Adam Leach

Lack of attention to detail and poor market research by buyers are to blame for more than 99 out of every 100 public sector contracts in Uganda last year running over budget, according to the Inspector General of Government.

In its third annual report into corruption within government, the IGG found that the number of procurements that kept to budget had dropped to just 0.7 per cent of those let over the past year. It blamed purchasers for leading to unrealistic estimates of overall costs. The situation also appears to be deteriorating as in 2009, only half of contracts were found to have gone over their original budget.

The report said: “Price increase during execution, through change orders in specifications or cost, may be grounds for corruption. This is a significant red flag of a possible entry point of corruption and calls for integration of risk management into public procurement.”

The report, which covered contracts in 2012, also criticised public sector buyers for taking too long. It found that less than a third of procurements – 29 per cent – were completed when they were supposed to.

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