DISS probes P100 million ARVs scandal

  • Pharma companies expose industry shenanigans
  • 300 000 patients at high risk of ARV shortage
  • Suppliers report a P100 million wastage
  • DISS director confirms multi-pronged probe
  • Office of the President reacts to petition


The Directorate of Intelligence and Security Services (DISS) Director General Brigadier Peter Magosi has summoned four pharmaceutical distributing companies – Portfolio Pharmaceuticals, Monteco Solutions, Africure and Lesek Group following their recent outburst over the awarding of life-saving Anti-Retro-Viral (ARV) drugs tender which they say is marred with irregularities and inconsistencies.

The quartet has not only instituted legal proceedings on the matter but has also petitioned the Presidency to rein in on Public Procurement and Asset Disposal Board (PPADB), Ministry of Health and Wellness and Central Medical Stores. They warned that the mediocrity at these institutions cost government an avoidable P100 million in the procurement of ARVs.
This week DIS operatives told this publication that there has been communication between the Office of the President (OP), DISS and the four pharmaceutical companies to, “probe the matter further and bring the culprits to book, explore solutions and possibly resolve the matter outside court.”

“The pharmaceutical companies have been summoned to DISS offices for a closed meeting with the leadership this week to dialogue on the matter and explore whether the matter warrants an investigation or stakeholders remedial efforts,” revealed an intelligence operative who preferred anonymity.

This was also confirmed by DISS director, Brigadier Peter Magosi who told this publication that it is true that they have taken up the matter. “I do confirm that we are following these allegations with the intent to confirm if indeed someone has a case to answer or qualify the allegations,” said Magosi in response to this publication’s enquiry.

Magosi appealed to members of the public to assist with any information they may have on the matter “to make it their responsibility to provide the spy agency with information through whistle-blowing mechanisms put in place.
Clarifying the P100 million wastage and expenditure, Magosi said the figure does not reach P100 million as claimed but could not dwell on the exact figure.

The pharmaceutical companies said they were not in a position to discuss the matter with the media.

The dispute is over a tender for the supply of Anti-Retroviral drugs for two years which the suppliers say is riddled with mistakes, irregularities and inconsistencies and suspicions are that there may be ulterior motives on the tender as well as the under hand tactics by big players with political connections who want to benefit from the tender .

The four pharmaceutical manufacturers and distributors have also petitioned the OP calling for the Office to ‘stop, review and correct the tendering process of the mentioned tender’ which experts in the field say may stall supply and distribution of the life-saving drugs if left unattended. Botswana has about 300 000 people enrolled in the ARVs programme according to NACA chief, Richard Matlhare.

The PPADB, they say, published the board decision and awards in the adjudication of the above mentioned tender on the 26th of November 2018.

“The Board issued letters of award and non-award to each individual company that had participated in the tender. Each individual company wrote to the PPADB citing irregularities and areas where the board was viewed to have erred in their decisions. Supporting evidence was attached to prove to the board that it had erred,” reads the petition, which continues that the procurement entity wrote to the individual companies that they had suspended the procurement process of the above mentioned tender.

“However, all of the appeals submitted were all dismissed and on the 9th of January and the procurement entity wrote to the individual companies stating that the suspension of the procurement process had been uplifted. We have come together as the majority of bidders to contest the findings of both the evaluation committee and PPADB’s unsatisfactory responses to us all,” argued the four companies.

DISS Probes alleged P100 Million over expenditure on procurement

The DIS is said to have recently launched a separate probe on some of the reports made by the four companies that about P100 million of tax payers money was misspent on procuring ARVs.

“Our findings collectively show an over expenditure of Government funds to a large extent. Our approximation stands over P100 million. The general rule has been that the cheaper bidder is awarded 80% of the bid and 20% to the next eligible bidder. PPADB countered this to say there is no obligation by the procurement entity to buy from the cheapest bidder, which is fair. However, it is an obligation to make a cost effective decision. No market analysis has been done and we have proven this through our various letters,” pharmaceutical companies wrote to the Office of the President two weeks ago.

The petitioners further say explanations justifying the reason for award even though price variations of 20%-40% have been proven as unsatisfactory. “Historically, a 15% CAP was applied on EDD pricing which also serves as a transparent market analysis review,” they said.

They continued: “Similarly, it is in the interest of developing our local economy to award local: foreign ratio of 80:20 rather than 50:50. If the local company struggles to supply at the ratio of 80:20, the framework contract allows for the procuring entity to then increase the order quantities to the foreign company. An initial outright award of 50% to a foreign company is unjustifiable.”

PPADB and CMS say that the ratio of splitting was due to poor performance but the petitioners say they have not shared these performance records with any of them despite requesting for them several times before the closure of the tender. In addition, the petitioners say they are unable to understand how CMS came up with the performance values sent to PPADB and these have not been transparently shared.

PPADB and CMS they say both claim that this performance is based on quarterly SRM (Supplier Relation Meetings) and End of Year activity reports but the petitioners argue that many of the companies listed have not had regular quarterly SRM meetings. “None of the companies have been given the end of year activity report either, in spite of requesting for it before the tender closing,” they argued in the court records.

The petitioners fell short of blaming CMS of incompetence, “CMS has an immense role in the performance and their role in the supply or delivery of ARVs cannot be overlooked. Issues such as lack of appropriate planning and forecasting, late issuance of GPOs, lack of space and lack of effective communication are also some reasons of delayed deliveries,” further read the petition.