Single bid marks 40pc of contracts

Nearly half of the procurement contracts executed by the Central Medical Stores Depot (CMSD) during the 2023-24 fiscal year saw low bidder participation, raising concerns about competition, transparency, and value for money, reveals the recent Procurement Post Review of the Bangladesh Public Procurement Authority (BPPA) under the Implementation Monitoring and Evaluation Division (IMED).

The review covering 30 contracts involving over Tk 650 million found that 12 of them, 40 per cent of the total, received only a single responsible bid, while several others saw just two or three participants.

Of the submitted bids, the most responsive ones came from a handful of familiar suppliers, and the quoted prices were often significantly lower than official estimates, which the report warns could indicate quality compromise or non-competitive pricing.

The report, prepared by an independent consultant, was recently forwarded by the BPPA to the CMSD, the health ministry, the IMED, and other relevant agencies.

It offers a set of recommendations to strengthen competition in public procurement, aiming to maximise value for government expenditure.

The report found that six contracts were awarded after only one firm purchased the tender documents and submitted a bid, making them effectively uncontested.

In one case, despite repeated invitations, only one supplier submitted a bid for the procurement of mobile clinic vans.

Similarly, contracts for high-value medical equipment, such as methadone, antiretroviral drugs, and diagnostic machines, also attracted just a single bidder.

"Instances of single tender selling, single tender submission, and single responsive bid were frequently observed," the report noted, adding that these tendencies undermine healthy competition and may limit procurement quality.

In some instances, the awarded prices were up to 50 per cent lower than the estimated costs, prompting the reviewers to question whether lower prices compromised product specifications.

One such case involved the procurement of freezers and diagnostic equipment, where awarded prices were 50 per cent below estimates.

The review found that in December 2023, the CMSD invited a tender to procure anti-retroviral drugs (ARVs) worth Tk 14.8 million for the treatment of HIV, the virus responsible for AIDS.

However, only one bidder - Beximco Pharmaceuticals - submitted a proposal and was subsequently awarded the contract at a price 16 per cent below the official estimate.

IMED officials observed that the estimated cost may have been deliberately set at a higher level, potentially discouraging competition and paving the way for awarding the contract to Beximco.

The BPPA's report attributed the lack of competition partly to systemic constraints within the CMSD, including the absence of a dedicated procurement cell, inadequate planning, and overreliance on a narrow pool of suppliers.

While CMSD officials ensured compliance with formal procedures, such as proper advertisement, bid opening, and evaluation, the review criticised the limited oversight in committee approvals and noted delays in issuing notices of award and payments.

The CMSD, a key procurement and distribution arm under the Directorate General of Health Services, signed 18 contracts in FY24 totalling around Tk 619 million.

To improve competition and efficiency, the BPPA has recommended establishing a functional procurement cell within the CMSD, expanding supplier outreach, and revisiting procurement planning practices.

It also advised the use of national tendering methods where applicable, stricter adherence to the Delegation of Financial Power, and faster contract finalisation and bill payment to attract more bidders.

To improve competition and procurement efficiency, the BPPA has issued a series of recommendations.

These include establishing a dedicated procurement cell at the CMSD, providing procurement training to non-technical staff, and preparing annual procurement plans (APPs) at the start of the financial year with clear timelines.

Dr Mustafa K Mujeri, economist and former executive director of the Bangladesh Institute of Development Studies (BIDS), told The Financial Express that public procurement must be competitive, inclusive, and open to all eligible parties to ensure the best value for taxpayers' money.

"A truly competitive bidding process not only safeguards cost-effectiveness but also guarantees the quality of goods and services procured," he noted.

However, he observed that the CMSD has failed to uphold the standards of quality public procurement in recent exercises.

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