State company Medical Procurement of Ukraine was set to buy 90,000 protective suits for Hr 22 million at the health ministry’s request.
Doctors fighting the COVID-19 pandemic urgently need these suits. Kyiv-based textile company Textile Contact won the contract and made a deal with the state company.
Now the ministry appears to be halting the order, saying the suits are not up to European standards, even though the original tender made no mention of them. Instead, the ministry made its own separate tender with a distributor that will import 71,347 suits from China for Hr 35 million — about double the cost per unit.
The move is a critical blow to Textile Contact, which may not be getting paid even though it already bought the materials and is close to completing 25,000 suits. Without the money, it cannot pay its workers.
“In 25 years of operation, we have never run into a situation where a state enterprise made a deal with us and then said there is no financing because the ministry did not agree,” said Textile Contact founder Oleksandr Sokolovsky. “This is catastrophic for us.”
But worse still, this can deepen the conflict between the health ministry and Medical Procurement of Ukraine, the independent state company in charge of buying almost half of Ukraine’s drugs and medical supplies. The ministry has been blocking the state company’s work. This is delaying critical supplies that will affect hundreds of thousands of lives.
The Anticorruption Action Center, an activist watchdog, raised the possibility that corruption is behind the ministry’s latest actions regarding the protecting suits.
“We see major corruption risks in the health ministry’s desire to re-assume [procurement] functions,” wrote ANTAC board member Olena Scherban, in a statement.
While Medical Procurement told the Kyiv Post it could not comment directly on the suit contract, the company released a statement on its Facebook page. It said that if the ministry demands to sign off on every single tender, it destroys the whole purpose of Medical Procurement of Ukraine.
“This… negates the principles of transparency and impartiality of the procurement process,” the state company wrote.
The Ministry of Health has not responded to the Kyiv Post’s questions on procurement despite multiple requests.
Background
Starting in 2015, Ukraine ceded responsibility for important medical purchases to international organizations. This was done to prevent corruption by health officials with ties to companies.
“Prior to the establishment of effective drug procurement mechanisms, the Ministry of Health has had documented cases of corruption and working with predominantly ‘its own’ suppliers,” the Anticorruption Action Center wrote.
Medical Procurement of Ukraine was designed to be the international organizations’ successor. It was supposed to start working this year but the ministry has yet to give it the green light.
Last month, Medical Procurement accused previous health minister Ilya Yemets for holding up all medical procurements to force the state company to hire his trusted associate. In response, Medical Procurement head Arsen Zhumadilov was called into the national police on suspicion of wasting state funds.
Yemets has been replaced by Maksym Stepanov. But the ministry still delayed giving Medical Procurement the go-ahead.
Tender snafu
On April 10, the ministry requested for Medical Procurement to buy 90,000 protective suits for beleaguered medical workers. Protective equipment shortages have gripped Ukraine, with many hospitals having less than a week’s supply.
The ministry allocated Hr 36 million for the purchase. Medical Procurement launched a tender and found Ukrainian producer Textile Contact, which would provide the goods for Hr 22 million, about 40% cheaper.
The tender mandated that the product complies with all Ukrainian health and safety standards. Textile Contact provided the Kyiv Post with documents certifying their compliance.
But that turned out to not be enough. Sokolovsky said that out of the blue, the health ministry told him that his company had to meet European standards on sterile manufacturing procedures. He was also told that there was a conflict between the ministry and Medical Procurement and that his company would not be getting paid.
“We have done everything according to the request, the contract was signed for biological protection suits, nowhere was it written that this was supposed to be sterile medical production pursuant to international norms,” said Sokolovsky.
Sokolovsky was told that Ukraine does not have a single laboratory that would be able to perform this kind of certification, making it almost certain that the ministry would be buying suits from outside the country.
Instead, the ministry made a deal with Meddiv, a pharmaceutical goods wholesaler, which will be bringing in the 71,347 protective suits from Chinese producers.
According to transparency database YouControl, Meddiv only started participating in tenders as of late February. It has supplied three dozen orders of protective equipment to various medical institutions throughout Ukraine.
The orders ranged from Hr 4,500 to Hr 416,000 in value; most were Hr 120,000. The latest deal with the Ministry of Health is many times larger than all its other tenders put together.
Conflict brewing
On Friday, UNIAN news agency published an article stating that Medical Procurement failed to provide certification for the suits to the health ministry, which it has been demanding since February.
The article featured an image of a letter to Medical Procurement from deputy health minister Svitlana Shatalova, dated April 14.
“No information was provided regarding the technical requirements for the biological protection suits that are planned to be purchased in order to verify the proper quality of the products, which will ensure reliable protection for doctors and other workers from COVID-19,” the letter read.
In its Facebook response, Medical Procurement said that it has sent letters to the ministry laying out every detail of the pending order and requesting the ministry’s consent to go forward.
The state company also pointed out that Ukraine was not even preparing for the coronavirus epidemic in February. The tender itself did not take place until April.
