Health sector steeped in unhealthy practices in procurement, equipment use

High-value medical equipment purchased over a year ago remains largely unused, exposing critical gaps in resource utilisation and public money's value.

Such neglect and waste officially detected under the Expansion of the National Institute of Neurosciences and Hospital (NINS) project only shows the tip of the iceberg in the lifesaving health sector.

An ultrasonogram machine received by Bhaluka Upazila Health Complex in July last year from another scheme was only installed on January 5, 2025--and again left nonoperational for the absence of a specialist.

Diagnostic kits for malaria and rk-39, worth Tk 19.9 million, lie idle in the DGHS storehouse, and digital blood glucometers delivered to Trishal and Bhaluka Upazila Health Complexes in November 2024 cannot function as compatible strips were not procured separately.

These findings are part of a broader post-procurement review conducted by the Bangladesh Public Procurement Authority (BPPA), which spotted serious weaknesses in procurement practices across key health agencies.

The agencies under the scanner include the Directorate-General of Health Services (DGHS), the Directorate-General of Family Planning (DGFP), and the Department of Public Health Engineering (DPHE).

The review, finalized recently, assessed 30 contracts from each entity for fiscal year 2023-24 to examine compliance with the Public Procurement Act and the Public Procurement Rules, spotlighting efficiency, accountability, and value for money.

The BPPA review reveals that while Bangladesh has established robust legal and digital procurement frameworks, practical execution remains weak, particularly at DGHS that manages the bulk of public health spending.

Procurements under the DGHS faced an average delay of 433 days, highlighting systemic weaknesses in planning and contract oversight.

Field inspections showed that many medical consignments were delivered but left unused in storage, exposing equipment to deterioration. In several instances, needs assessments were missing or inadequate, resulting in the procurement of goods that were either unnecessary or unsuitable.

Competition in procurement is another key concern while 43.33 per cent of DGHS contracts were awarded to a single tender, representing 82.88 per cent of the total contract value, with only five suppliers capturing this share.

The BPPA consultants have warned that dependence on a small pool of suppliers undermines fair competition and exposes agencies to potential collusion and inflated prices.

Governance lapses were also evident, including the splitting of contracts under the Direct Procurement Method to bypass higher approval authorities, pre-delivery payments, and weak recordkeeping, which complicated post-audit verification.

Although contracted prices were on average 8.13-percent lower than official estimates, financial losses occurred owing to poor monitoring and irregular practices.

The report recommends mandatory needs assessments, stronger contract management, prohibiting pre-delivery payment, wider supplier diversification, and alignment of procurement schedules with budgetary allocations to prevent idle resources.

At the DPHE, cost estimates were often inaccurate, delays exceeded bid-validity periods, competition was limited, and some service contracts bypassed the e-GP system, undermining digital standardisation.

The BPPA recommends full e-GP coverage, electronic billing and contract management, better cost estimates through market research, and broader supplier engagement.

At DGFP, procedural violations and weak field-level accountability were noted. Contracts were occasionally awarded to lower-ranked bidders in violation of rules, and contract extensions were made beyond legal provisions. Monitoring by Family Welfare Assistants and Inspectors was poor, with daily registers left disregarded.

The Central Medical Stores Depot (CMSD) generally complied with legal requirements but faced structural challenges like staff shortages and lack of a dedicated procurement cell.

Low competition was widespread, with many contracts attracting only one or two bidders, and delays in international competitive tendering slowed delivery. Pre-delivery payments and rejected goods were also reported.

The Authority recommends establishing a functional procurement cell, expanding supplier outreach, improving planning and adhering strictly to financial authority delegation.

Across all agencies, common issues emerged: over-dependence on a small set of contractors, weak contract management causing delays and wastage, poor alignment with budgets, and inadequate needs assessment resulting in idle or unused resources.

Experts warn that unless these systemic weaknesses are addressed, the promise of efficient and value-for-money public procurement will remain a distant dream.

Dr Mustafa K Mujeri, economist and former BIDS executive director, says competitive and transparent procurement "is essential to safeguard public money and ensure quality care".

Transparency International Bangladesh (TIB) executive director Dr Iftikharuzzaman notes that "financial losses and irregularities are unacceptable, often stemming from political influence, supplier collusion, and bureaucratic inefficiency".

BPPA's review is expected to guide future reforms to strengthen competition, improve efficiency, and ensure accountability.

Without correcting these execution flaws, millions of taka will continue to be wasted, critical medical equipment will remain unused, and the government goal of improved health-service delivery across Bangladesh will be undermined.

jahid.rn@gmail.com