In a landmark decision, the Special Tribunal has ordered that companies that supplied substandard surgical gowns to Free State Health must have their profits seized and that officials involved should be compelled to pay any wasted costs.
The Special Tribunal reviewed and set aside PPE contracts in the Free State worth R39.1m, reports EWN, and in the judgment declared the appointment of service providers as unlawful and irregular.
The Tribunal has been hearing suspected cases of corruption and fraud related to COVID-19 PPE contracts, which have been probed by the SIU since the start of the pandemic, and in this case, set aside the appointment of various companies that had supplied surgical gowns to the Free State Health Department. In addition, an order was made for the entities to be divested of the profit they made or stood to make.
Judge Lebogang Modiba, presiding over the tribunal, declared the contracts of 29 suppliers of sterile surgical gowns to the Free State health department to be unlawful and irregular. She further ordered that the Special Investigating Unit (SIU) appoint an expert to assess the gowns that were delivered and file a report within 30 days.
Only three of 32 companies contracted to deliver sterile surgical gowns in terms of emergency procurement delivered ones that complied with standards and had the necessary certificates, reports Daily Maverick.
None was licensed, however. Modiba ruled that a licence was not necessary, as would be the case if they were distributing medicine, but added that their case fell at the hurdle that they did not supply goods that had quality certificates.
Modiba said an expert must determine the fair value of the gowns that were delivered, and the companies can be reimbursed for this value. She added that if the government department suffered any losses relating to these contracts, accounting officers are ordered to recover these costs from the officials involved in the process.
This is the first decision on the issue of whether PPE is included in the requirement of suppliers of medical devices to be bearers of a licence issued in terms of the Medical and Related Substances Act.
The SIUʼs legal team argued that a surgical gown was a medical device and suppliers should be licensed. Modiba ruled that it should be a requirement.
During 2020, shortly after the outbreak of the first wave of COVID-19 infections in SA, procurement was centralised in the Free State treasury. A deviation from the standard procurement process was approved for the purchase of surgical gowns. More than 60 bids were received.
“The procurement seemed to have gone very well until the Free State Health Department started receiving complaints from several health service points that they had received surgical gowns of inferior quality. The complaints prompted the Department to investigate,” Modiba said.
A report concluded that only three of 32 successful bidders had delivered surgical gowns complying with the standards set out in the tender documents, adds the Daily Maverick report. Only four suppliers had complied with technical specifications.
Because of the rate of disbursement to hospitals and a chaotic delivery process, the Free State Health Department had difficulty matching the rest of the surgical gowns to the bidders who supplied them, because the large volume of gowns ordered and delivered made the validation process impossible. Most of the boxes in which they were delivered were not marked, making it impossible to identify the bidders who supplied and delivered them. Several bidders sourced the gowns from the same dealers, which only made the problem worse.
The Free State government had committed R39,1m towards the gowns and had paid R9,5m to some of the successful bidders. These were among those that had been accused of having delivered substandard gowns.
An investigator from the Health Department recommended that the non-compliant respondent entities be penalised R1 per surgical gown on the price quoted and be paid the difference invoiced.
In subsequent legal action the SIU halted further orders, deliveries and payments pending its investigation. Having found several irregularities in the procurement process, the unit instituted the proceedings currently before the Special Tribunal.
EWN article – Special Tribunal sets aside PPE Free State contracts worth R39.1m (Open access)
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Most PPE distributors investigated not licensed — SIU
SIU probe into fraudulent PPE contracts now exceeds R14bn
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