KDI seeks investigation into price swells in Health Ministry tenders during pandemic time

One of the most priority issues during times of crisis, such as the case with the COVID 19 pandemic, is prevention and addressing the dangers of corruption in the health system. To analyze how the Ministry of Health has addressed these risks, KDI has analysed the sample of 9 tenders for medical equipment and products, implemented under the negotiated procedure, without publication of contract reporting and announced during March 4th, April 28, 2020.

Seen by the prism of institutional transparency, all tender files, decisions to select successful and unsuccessful operators in tenders, announcements of giving and signing of the contract, and contracts were made public on the E-procurement electronic platform. While the demands of the research units, the negotiation processes, invitations to offer that the Ministry of Health had sent to economic operators, KDI had provided through requests for access to public documents. The Ministry of Health has offered access to all these information within legal terms.

The Ministry of Health called to the needs created during the status of the pandemic, before any procurement activity, had announced The KCPP would exploit legal provisions allowing the use of a negotiated procedure without publishing the contract announcement. Furthermore, it had formed the commission to collect reference prices for equipment and medical products for protection from Covid-19, under which the envisioned values in all tenders were then determined. There were, however, cases when this commission had not made adequate assessments of reference prices, including non-ormeticly low and abnormally high prices presented by economic operators, which then influenced the” bid, KDI says.

This was noted in the purchase of surgical gloves. So if the commission had eliminated abnormally low and abnormally high prices in calculator then the reference price for the entity would have been 0.24 euros. Consequently, the MSH for three schools of surgical gloves would have paid the total amount of 80,709.33 euros, rather than 159,071.3 euros it paid in reality. The potential for these three tears alone would save over 60,000 Euros.

KDI-, says that, despite the fact that the Health Ministry had done preliminary market research, out of 120 required products, it had managed to provide supplies of only 70 of them worth 7.093,272.57 euros. “This was due to the failure to offer by economic operators(OE) and the annual increase in prices from the OE, but also in the absence of continued market research by the Ministry of Health, at a time when the market has undergone changes to a daily basis”.

In terms of competition, the Ministry of Health at these 9 tenders had invited three to 21 businesses for bidding, though negotiating procedures require contracting authority to invite 3 to 6 economic Operator to bid. Whatever the case, it remains disturbing that only a small OE number had filed bids, resulting in even higher prices than market prices.

KDI had found that prices for products and similar equipment range from contract contracts, where the Health Ministry had in some cases managed to secure lower prices of up to 42% of the projected value, while in other cases, the MSH had paid up to 74% higher prices. To illustrate, the price for protective clothing units for Covid-19 was 7 euros in the March 4th 2020 contract, while in the April 28th contract, the price was 12.20 euros, which represents a 74% increase from the price obtained through the first contract, though the required amount had increased by 4,000%.

And lab materials for testing products with no. Six, seven, nine, ten bought through two contracts with no. procurement 206-20-959-2-5 and 206-201224 -1-1-5 we see that although there was an increase in quantity from 25% to 166%, The MSH secured prices, which were 13% to 42% cheaper.

After accepting bids in the 4 March 2020 tender for protection equipment supply has been observed rising prices from the OE (especially mask prices) and this has prompted the MSH to seek out Kosovo Police-Department of Investigations and the Kosovar Competition Authority(AKK) investigating these contracts.

To address the high-profile concerns about price hikes and lack of supplies through emergency contracts contracted by the Ministry of Health at the time of pandemic, and to ensure that the emergency situation has not affected the favour of specific companies, KDI called on justice bodies and the National Audition Office to investigate and audit all expenses, to ensure that the citizens' money was properly and correctly exploited.

We also ask the Kosovo Competition Authority to take the necessary actions regarding the research of price hikes by economic operators for products and medical equipment, and to take appropriate measures if market manipulation proves for greater profits in a human crisis.

The Health Ministry needs to secure and ask the reference price assignment commission not to take into account abnormally low and abnormally high prices, since it is distorting the definition of the exact value envisioned by affecting supply, competition and public spending. It also requires that reference prices be updated on regular grounds.

To be more transparent with the public, we invite the Ministry of Health to publish on the e-program platform all documents which are part of procurement activities, including calls, offers and document accession reports. We also ask the Government to publish all decisions concerning budgetary divisions for the health sector.