LAHORE: A fact-finding inquiry panel has recommend strong departmental action against the members of the Services Hospital Lahore`s purchase committee after detecting alleged corruption and financial irregularities worth around Rs400 million in the procurement of drugs, and surgical and disposable items for the financial years 2022-23 and 2023-24.

The disciplinary proceedings against the committee members were proposed under Punjab Employees Efficiency, Discipline and Accountability (Peeda) Act 2006, besides a regular departmental inquiry, for blatantly violating Provincial Procurement Regulatory Authority (PPRA) rules, committing procedural irregularities and using unfair tactics, causing loss to the exchequer.

The four-member inquiry panel was headed by deputy secretary (general) of Specialized Healthcare & Medical Education Department, Punjab. The department`s internal audit wing director and the audit officer were also members of the panel.

The then medical superintendent (MS) of the Services Hospital was the chairman and a professor of surgery was co-chairman of the committee. The co-chairman is serving as a principal of a government medical college in Punjab these days.

According to a report (a copy available with Dawn), the inquiry panel completed investigations and furnished its recommendations after examining all the procurement processes for procurement of medi-cines and surgical and disposable Items.

Purchase of surgical and disposable items for FY 2022-23 As per the report, during the scrutiny of procurement file of surgical and disposable items, the purchase committee ignored the lowest bidder without giving any reason(s) in black and white and awarded the contract to another company, causing a loss of Rs5,138,500 to the national exchequer.

The report says the same blunder was repeated when another company participated in the tendering process and was declared `technically and financially responsive`.

As per financial bids of the bidder, the offered rates were the lowest, but the purchase committee ignored the firm, declaring that the `CDR of the firm was fake`.

While examining the record, the panel found no communication with the concerned bank regarding `fake` CDR.

`The CDR was shown with a hand written remark, `It is a fake Draft`. Moreover, there was no evidence available in the file regarding verification of bid securities of all responsive bidders,` reads the report.

Therefore,the probe panelobservedthat the hospital management adopted a `pick and choose` method in awarding the contract on higher rates, causing a loss of Rs23,025,940 to the exchequer.

The probe committee also pointed out that during the scrutiny of procurement files of surgical and disposable items, it was observed that supplies amounting to Rs 25,931,595 were still pending/ not receivedfrom the concerned firms.

It says the hospital administration neither took any action against the concerned firm, nor found the supplies. Consequently, the hospital was to procure the said items from the local market on quotation/LP basis at higher rates.

The panel also pointed out that the contract for the ECG rolls of all sizes was awarded at a price of Rs648 for each item to a firm which had not even participated in the tendering process, ignoring the lowest bid of Rs488.

It also accused the purchase committee of discouraging healthy competition by adopting a biased approach to give `undue favour` to a firm in the purchase of surgical gloves so that it may be able to supply partial items and refuse to provide most of the important items. The `favourite` firm did the same, and hampered the whole purchase process by refusing to supply most of the items, it added. The estimated cost of all the items at the time of bidding was said to be Rs86,335,000, the probe panel observed.

In reaction, the panel says, the purchase committee was supposed to forfeit the CDR of the firm in question, but no such action was initiated, causing a huge loss to the public funds.

The probe panel further revealed that following the refusal by the above-mentioned firm, the purchase committee considered another company for the purchase of gloves on quotation basis, which was technically rejected `on the basis of poor quality of samples` by the technical committee,as well as grievance redressal committee.

`It clearly shows that earlier rejection of the said company by the technical committee/grievance redressal committee was baseless and aimed to facilitate the first firm,` reads the report.

Purchase of surgical and disposable items for FY 2023-24 The inquiry panel observes that the purchase committee also awarded tender of various items to a firm on the basis of `ambiguous documents`, while rejecting five other firms without any solid reasons.

It says the purchase committee negligently considered the past experience letters presented by the `favourite` firm, which belonged to three other private companies.

It found that the firm offered a high rate of Rs330 (for each pair of gloves), while the same item was available at Rs242 in the market. The difference between the contracted firm`s price and the market price caused a loss of Rs79, 200,000, to the exchequer,the panelsays.

It observes that the Services Hospital also purchased the surgical gloves at Rs330 each through local purchase (LP) and paid an excess amount of Rs144,000,000 from the national exchequer.

Purchase of medicines for FY 2022-23 The inquiry panel observes that supplies amounting to Rs46,548,996 were still pending/ not received from the concerned firms, while the hospital administration neithertook any action against the concerned firm, nor found the supplies.

The report reveals that the hospital management prepared a list of 500 medicines for the `bulk purchase` but most of the 59 firms participating in bidding offered quotations against 155 items only.

The probe panel also observed various procedural irregularities and violation of the PPRA rules during the bidding process of these medicines.

It says the purchase committee rejected the lowest offer of some firms, citing `poor efficacy on clinical ground` and purchased medicines at the second-lowest prices.

`No mechanism was prepared /developed to check the poor efficacy of the medicines, no any of the purchase sessions briefed to the probe committee. This means that [hospital] management fully facilitates their favorite bidders for purchase of medicines and ignores the healthy competition,` reads the report, adding that this faulty practice led to a huge loss of Rs36,184,180 to the exchequer.

Similarly, the probe panel pointed out irregularities of millions of rupees in the procurement of medical gases, equipment, including dental units, ECG, suction machines, nebuliser ultrasonic and laryngoscope, during FY 2022-23.

`Unfair rejection of firms, violation of due process and not considering the `value for money` caused financial loss to the public money, apart from unfair and non-transparent procurement processes,` concludes the probe panel`s report. Asif Chaudhry