ZPPA'S RESPONSE TO NEWS DIGGERS EDITORIAL COMMENT
2 11 2022
The Zambia Public Procurement Authority (ZPPA) wishes to respond to the editorial comment published from Monday, 7th February to Thursday 10th February 2022, under the heading “Drug procurement under UPND: The ZAMMSA, ZPPA saga-Part 1, 2, 3 and 4” in the News Diggers Newspaper.
ZPPA is concerned with the sentiments expressed in the editorial comments and would like to set the record straight and advise that:
On 27th October, 2021, the Zambia Medicines and Medical Supplies Agency (ZAMMSA) wrote to ZPPA requesting to deviate from citizen bidder participation requirement and to reduce the floatation period from four (4) weeks to seven (7) days citing low stock of key health commodities resulting in service disruption throughout the health facilities in the country. ZAMMSA stated that the status of commonly procured medicines and medical supplies was at an alarming low level with almost nil stock in all health institutions in the country, which had negatively impacted the delivery of health care in the country.
ZAMMSA explained that it deemed it necessary to procure emergency essential medicines and medical supplies as there was a critical stock situation of health commodities which called for wide supply availability with quick and resolute action.
The aforementioned request for a deviation which was regarding Section 39 of the Public Procurement Act No.8 of 2020 (PPA), was to allow for local bidders in addition to citizen bidders, to compete in the tender for supply of drugs. Further, ZAMMSA explained that the request was warranted by the lack of citizen bidders who were capable of satisfying the need.
On 14th December, 2021, ZAMMSA requested for a ‘No Objection’ to reduce the best evaluated bidder notification period to 24 hours from ten (10) working days. The justification that ZAMMSA provided was the emergency tender, limited time and critical stock situation of health commodities. Further, on 17th December 2021, ZPPA rejected the request from ZAMMSA to waive the notice of the best evaluated bidder period from 10 (ten) days to 24 hours. ZAMMSA was advised to ensure effective procurement planning and selection of effective procurement methods to meet requirements.
On 20th December, 2021, ZAMMSA wrote to ZPPA justifying why they needed the waiver for the notice of the best evaluated bidder from 10 working days to 24 hours based on the following information:
- It was difficult to effectively plan for the procurement in question because of the transition processes as the procurement function was moved from Ministry of Health to ZAMMSA and the requirements were urgently needed.
- Restricting the number of bidders through Limited bidding would have been risky because the suppliers were required to have the items ex- stock. However, the suppliers could not reserve the stocks as they were not guaranteed of awards from ZAMSSA hence suppliers would continue selling their stock to other clients.
- To justify the procurement method, ZAMMSA explained that considering the Covid -19 pandemic, the suppliers would have continued selling the available stock. ZAMMSA stated that although Limited bidding would have appeared to be the most appropriate method to meet this requirement, it would have been difficult to identify bidders who would have ex-stock availability from the ninety-seven (97) products required under the tender. Further, to ensure commodity security and as part of the evaluation processes, ZAMMSA conducted a due diligence to ascertain physical availability of the commodities. The findings indicated availability ex-stock. However, bidders were quick to indicate that available stocks would quickly surge downwards as they had continued selling since no formal orders were made by ZAMMSA. ZAMMSA’s emergency requirement was further advanced by the risk of the Omicron variant which increased significantly worldwide with restrictions on flights and some of the products under this tender were critical to the management of the outbreak. Further, ZAMMSA explained that the expected delivery of critical commodities would be required before Christmas as some suppliers might go on industrial break. Further, ZAMMSA stated that the poor road network in rural communities in the country, posed a serious challenge to the distribution of drugs in the rain season as there was risk of roads being flooded which would lead to access challenges when distributing the drugs. Hence their request for the notice of the best evaluated bidder to be reduced to one (1) day
ZPPA responded to ZAMMSA by granting five (5) working days instead of one (1) in order to uphold the fundamental principles of public procurement as well as respond to the emergency situation in accordance with section 79 of the PPA and Regulation 152 of the Public Procurement Regulations (PPR) which provides for waiving of provisions of the PPA where circumstances justify.
Section 79 (a) of the PPA states that:
“The Authority may, in a prescribed manner and form permit a procuring entity, to deviate from the use of a public procurement method, rule, process, or document. –‘
(a) where exceptional requirements make it impossible, impractical or uneconomical to comply with the provisions of this Act;”
Appeals by suppliers against the awards of the tender for the emergency supply and delivery of medicines and medical supplies:
On 5th January 2022, P and G Pharmaceuticals appealed to ZPPA against the decision by ZAMMSA to award the tender for supply of drugs to a local bidder.
The Appeal Ground No.1: Condition number 3 in the solicitation document provided that bidding was to be conducted through Open National Bidding (ONB), however, it shall be open to both citizen and Local Bidders’.
The ZPPA findings were as follows:
Pursuant to section 79 (a) of the PPA, the Authority granted ZAMMSA a ‘No Objection’ to deviate from section 39 to allow local bidders to equally participate in the tender for the supply of emergency essential medicines and medical supplies and to reduce the floatation period from four weeks to seven days.
Appeal ground no. 1 was dismissed pursuant to section 100(5)(a) of the PPA because of the ‘No Objection’ that was granted to ZAMMSA by the Authority to deviate from Section 39 (2) of the PPA.
Appeal Ground No.2: ‘The procuring entity purely intended to award contracts to Local Bidders ignoring the fact that the law in this instance provide for partnership with citizen bidders’
The following were the ZPPA findings:
The Authority observed from item 3 of the Invitation for Bids in the Solicitation Document that the tender was conducted through Open National Bidding and was open to both local and citizen bidders. Item 3 in the Invitation for Bids states:
‘Bidding will be conducted through Open National Bidding (ONB), however, it shall be open to both citizen and local bidders’
The Authority observed that the requirement in section 39 (3) of the PPA for local bidders who are awarded the contract to partner with citizen bidders was not stated in the Solicitation Document. Appeal ground No. 2 was therefore, upheld in part in respect of the omission of the requirement for local bidders who are awarded the contract, to partner with citizen bidders in the Solicitation Document issued for the tender.
The Authority was unable to grant the remedy sought for the cancellation of the tender as the requirement for partnering of local bidders with citizen bidders applies to a local bidder who is awarded a contract. Therefore, ZAMMSA was advised to ensure that the award of the tender was in line with section 39 (3) of the PPA. The requirement for partnership with citizen bidders is a legal requirement which local bidders who are awarded contracts need to comply with.
Appeal Ground No.3:
‘In order for the procuring entity to deviate from the Act, it is required to demonstrate the three conditions that it is uneconomical, impossible or impractical to use a public procurement method, rule, process or document. In the absence of exceptional circumstances, a deviation is flawed. That was the case in the tender in issue.’
In view of the urgent nature of the request from ZAMMSA to mitigate the impending stock out of critical medical supplies, there was justification to exploit possible ways of meeting the demand in the shortest possible time to avoid possible loss of lives. The justification for the possible loss of life due to inadequate medical supplies met the criteria for emergency procurements in line with regulation 39 (1) (b) of the PPR. Therefore, ZAMMSA was justified to explore possible ways of reducing the lead time of procuring these critical items which included a deviation from section 39 (2) of the PPA to allow both local and citizen bidders to participate in the first instance of the tender process in order to increase the chances of responsive bids at the earliest possible time.
Section 39 (2) of the PPA provides for a two-tier procurement process, where the tender is first limited to citizen bidders and in the absence of successful citizen bids to local bidders. Following a review of the application by ZAMMSA, it was the considered view of the Authority that the application met the criteria in section 79 (a) of the PPA warranting a deviation, as it would have been impractical and impossible to meet the emergency need disclosed by ZAMMSA within the shortest possible time in the event that the first tier of the tender process with citizen bidders failed thereby requiring a retender to local bidders. It was therefore considered justifiable to run one tender process allowing participation of both citizen and local bidders in order to increase the chances of responsive bids at the earliest possible time to achieve the objective of urgently procuring critical medical supplies to address the emergency situation disclosed by ZAMMSA.
In light of the foregoing, the application for a ‘No Objection’ satisfied section 79(a) of the PPA and regulation 152 of the PPR and the Authority was on firm ground to grant the deviation as requested.
Therefore, appeal ground no. 3 was dismissed pursuant to section 100(5)(a) of the PPA in due to the ‘No Objection’ that was granted by the Authority to deviate from Section 39 (2) of the PPA to allow local bidders to equally participate in the tender for the supply of emergency essential medicines and medical supplies.
ZPPA wishes to categorically state that it did not find merit in the cancellation of the tender due to the aforementioned reasons stated by ZAMMSA compelling the emergency procurement of drugs and it is within ZPPA’s mandate to grant deviations in accordance with section 79 of the PPA.
Furthermore, you may wish to note that in line with its mandate, ZPPA undertakes compliance monitoring, procurement audits and capacity assessments of procuring entities, to ensure that they are compliant with the provisions of the PPA and PPR. In this case, should ZAMMSA and or any other procuring entity be found wanting on this or any other procurements, the relevant sanctions in the PPA will be imposed.
In conclusion, ZPPA would like to appeal to the media to verify facts before the production of a news story, and familiarise themselves with the procurement processes and functions of ZPPA and procuring entities, as well as be acquainted with the provisions of the PPA.
ZPPA would like to appeal to members of the public who are aware of any corrupt activities or other irregularities in public procurement to freely report such issues to ZPPA so that action is taken in accordance with the law.
Idah chileshe Chella