NatPharm reverses exclusion of Chinese firm from test kit tender

March 29, 2021

Harare—The National Pharmaceutical Company (Natpharm) has been forced to reverse a decision to disqualify a Chinese firm from a Covid-19 test kits tender after it had been denied on the basis of excluding transport costs from Robert Mugabe International Airport to the parastatal’s stores.

Brian Chitemba

An investigation by the Zimbabwe Independent in collaboration with Information for Development Trust (IDT), a non-profit organisation helping the media to probe corruption and bad governance, showed that Natpharm had opted for companies which charged higher prices for three million Covid-19 test kits.

The parastatal, under tender details “NAT RBM 02/2021 for the supply and delivery of laboratory equipment and consumables for Covid-19 management to Natpharm Harare regional stores (manufacturers only)”, shortlisted companies to supply of Covid-19 materials.

Procurement of Covid-19 materials and consumables was done in line with Circular 1 of 2020 which was issued by the Procurement Regulatory Authority of Zimbabwe (Praz) in March 2020 to allow state-owned companies to expedite purchase of personal protective clothing, laboratory equipment, consumables and reagents.

According to a notice published on Tuesday 16 February, 2021, Natpharm procurement management unit (PMU) named three firms – Beijing Diagreat Biotechonologies, Abbott Rapid Diagnostics, Germany and SD Biosensor, South Korea.

3 million kits

Beijing Diagreat charged US$3 per Sars Cov-2 antigen RDT kit, giving a total of US$9 million for the 3 million kits.

Abbott Rapid Diagnostics pegged its price at US$5.50 per kit and US$16, 5 million for the consignment while SD Biosensor’s kits cost US$7.50 per test kit and US$22, 5 million for the Covid-19 materials.

The contract to supply has not been awarded to any of the three shortlisted companies for the test kits.

However, Beijing Diagreat Biotechnologies had initially been disqualified by NatPharm because it had allegedly not included transport costs from Robert Mugabe International Airport to Natpharm.

This effectively left Abbott, Germany (US$16,5 million) and SD Biosensor (US$22,5 million) as shortlisted companies.

In a letter dated 5 March gleaned by the Zimbabwe Independent written by Natpharm acting managing director Evans Dumba to Beijing Diagreat stated that the company failed to meet the tender requirements.

The Chinese company wrote to NatPharm on 26 February 2021, inquiring about the tender.

In response, Dumba clarified that Beijing Diagreat had not won the tender but was only shortlisted as one of approved suppliers of Covid-19 tests kits.

“Kindly be advised that shortlisting does not translate to winning a tender as evaluation takes into consideration other factors as stated in the tender document,” wrote Dumba.

“It must be further noted that in your bid submission, prices were quoted as Cost Insurance Freight (CIF) Incoterm instead of the Delivered at Price (DAP) Incoterms required in the tender document under Section 1.4.1. The CIF Incoterm would mean that there are hidden freight and insurance charges for delivery to NatPharm Harare that were not declared by your firm.

“Accordingly, this would mean your quoted prices did not reflect the full cost of delivering the product to Natpharm Harare.

“In view of the background given above, your organisation did not meet the requirements for the supply of SARS CoV-2 Antigen RDT kits.”

However, Beijing Diagreat wrote back to Natpharm explaining that it had no hidden costs.

The parastatal then backtracked on its decision and wrote to the Chinese firm stating that it was shortlisted for consideration.

Dumba wrote that, “It must be noted that Natpharm’s assessment had been based on CIF Incoterm as stipulated in your bid document and the resultant interpretation was that the destination of the goods procured would be the port of entry being Robert Mugabe International Airport, Harare.

“On further scrutiny of your bid document, supported by your letter dated 10 March 2021 written in response to your letter dated 5 March 2021, it is clear that your quoted price covers delivery to Natpharm Harare regional stores (DAP) as stipulated in our tender document.”

Based in China since 2013, Beijing Diagreat is a high-tech enterprise specialising in developing, manufacturing and distributing of IVD (In Vitro Diagnosis) reagents, analysers and raw materials.

Abbot Germany, is a company whose line of business includes the wholesale distribution of surgical, medical instruments, apparatus, and equipment.

Another potential Covid-19 test kits supplier is SD Biosenser – a South Korean global bio-diagnostic company that provides technologies and know-how, “aiming to contribute to the health and happiness of the human race”.

A check on Covid-19 test kits procurement history revealed that in a government gazette published on October 12, 2020, Natpharm shortlisted three companies for supply of 300 000 antigen rapid test kits and these included Abbot Germany under bidder name Medsure Diagnostics which charged US$3,1 million for the consignment.

Assure Tech (Hangzhou) Limited, China under bidder name Platinum Resources at US$1,8 million.

The other manufacturer was Xiamen Bioteme Biotechnology which charged US$1,5 million for 300 000 Sars Cov antigen rapid diagnostic test kit.

Abbot Germany has been shortlisted in the new February 2021 tender together with Beijing Diagreat and SD Biosensor.

Zimbabwe has been sourcing tests kits through procurement and donations from international health partners such as the United Nations International Children’s Emergency Fund (Unicef).

Contacted for comment Dumba asked for question in writing but had not responded by time o going to print.

‘For me to give a detailed response I need questions in writing,” he said.

Procurement regulations

The NatPharm Covid-19 test kits tender was done in line with Circular 1 of 2020 issued by Praz, which allows public entities to acquire Covid-19 materials for a quick response to deal with the novel coronavirus.

Praz published Circular 1 of 2020 on March 27, 2020 titled ‘Procurement of Requirements to Manage Covid-19 Disease Outbreak’ for quick purchase of personal protective clothing, laboratory equipment, consumables and reagents.

Praz was established after the Public Procurement and Disposal of Public Assets Act (Chapter 22:23) came into effect on 1 January 2018. It replaced the State Procurement Board which conducted procurement on behalf of public entities.

The authority is responsible for overseeing and regulating procurement by government ministries, parastatals and local authorities.

Public procurement regulations provides for public entities to buy from the lowest bidder who meet tender specifications for cost-effectiveness.

Immediate past chair of the Parliamentary Portfolio Committee on Public Accounts Tendai Biti said all public entities must follow the law that govern public procurement.

He said, “And where public companies don’t follow the law, that’s unconstitutional, and illegal.

We had asked for an audit of all Covid-19 procurement and that was coming because we are aware that huge amounts of money are being expended.”

Natpharm polluted history

NatPharm has hogged the limelight for alleged tenders mishandling.

The parastatal is a successor to the Government Medical Stores, and has a responsibility on behalf of government to purchase, sell and store medicines for hospitals, clinics and pharmacies.

NatPharm has in recent years become a feeding trough for executives including those under an old management led by former managing director Florah Nancy Sifeku, finance manager Charles Mwaramba and operations manager Rolland Mlalazi who were arrested in 2020, for flouting procurement regulations.

Others who were fired include human resources manager Walter Nhau, regional manager Raguel Mthombeni, stores pharmacist Rumbidzai Kanhema and Bridget Kumapenda.

Some NatPharm ex-bosses were accused of mishandling a US$5.6 million Covid-19 consumables tender which was given to Young Healthcare Limited. However, the tender was cancelled.

Former Health and Child Care minister Obadiah Moyo was arrested over his alleged role in US$60 million Covid-19 materials supplies deal in which he was accused of awarding tenders to obscure companies – Drax International LLC and Drax Consult SAGL.

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