Punjab Health Systems Corporation gave 'undue favour' to medicine, furniture suppliers, says audit report

Vishav Bharti

Chandigarh, February 20

It was not the Health Department, but suppliers of the equipment and medicines, who were virtually dictating the purchase of items at the Punjab Health Systems Corporation (PHSC), which acts as a procurement agency for the Health Department.

Rs 6.58 cr order issued to one firm

• The audit report found that the supply order worth Rs 6.58 crore was issued to Promark Tech Pvt Solution as per rate contract of the Controller of Stores on December 17, 2020, which was valid up to March 16, 2022
• In this case, the total order was given to only one company, when there were seven eligible suppliers
• The firm did not even have the capacity to manufacture such a huge number of furniture items

The fact came to the fore in a special audit of the two- year purchase of the PHSC done on the government’s directions. The report found that the PHSC procured different goods for over Rs 30 crore solely on the basis of representation given by the suppliers.

Analysing the multiple orders, the report observed that it looks like a case of giving undue advantage to suppliers. The report states: “Mostly, procurement has been done on the basis of representation of the firms, which clearly seems to be giving undue advantage to suppliers. The audit observations raise grave concern over the functionality of the corporation in carrying out the procurement activities.”

Like in the case of purchase of blood cell counter with analyser for Rs 8.68 crore, it was found that previously the PHSC had procured the same equipment as a non-proprietary item.

“Neither the requisitioning/indenting department has certified the item as proprietary nor has been any precedent to club both items and treat them as a proprietary item,” the report states.

The report further observed that the manufacturer had also given representation for freezing the rates of reagents/consumables of blood cell counter with analyser for seven years, which was straightaway approved and accepted by the PHSC without following any due procedure.

“The rates of the reagents of blood cell counter have been frozen in an incorrect manner without inviting any bids or quotations required as per the transparency in public procurement rules.”

In a similar way, purchase was done for the Truenat PCR testing system and e-stethoscope worth Rs 9.89 crore, fully auto analysers worth Rs 13.19 crore and hard surface disinfectants for Rs 6.07 crore.

Apart from that the report also found that there were serious irregularities in procurement of arm BP apparatus worth Rs 1.42 crore. The ‘in-arm BP apparatus’ was procured by floating a bid on GeM portal. One bidder Pharmasuit Healthcare qualified. And on the basis of single bid, the contract was given to Pharmasuit Healthcare for supplying 17 BP apparatus for Rs 2.3 lakh per piece amounting to Rs 39.10 lakh on July 15, 2021. Why the order to the single qualified bidder was issued in the first instance? Rather, a re-bidding was required.”

Interestingly, after a period of approximate eight months, the PHSC again placed an order for 45 BP apparatus for Rs 1.03 crore to the same bidder on March 10, 2022. “The repeat order was placed without following due procedures. Placing a repeat order of almost 2.5 times the previous purchase after a period of eight months and that too, without inviting any bid or tender, is totally unjustified. Why the tender or bid (on GeM) was not floated?” the report asked.