The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian medical equipment and pharmaceutical suppliers yesterday blasted the alleged continued refusal to include them in the bidding process for multi-million dollar contracts related to the Princess Margaret Hospital expansion, arguing that “none of this investment will be recycled” in the local economy.

Winston Rolle, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, who has been spearheading the sector’s quest for answers from the Public Hospitals Authority (PHA), told Tribune Business that the situation remained “very disconcerting” for Bahamian-owned businesses.

The value of equipment and technology required for PMH’s new Critical Care Block has been estimated at between $40-$50 million alone, and Mr Rolle disclosed that he had been looking at arranging a meeting between the suppliers and Prime Minister Perry Christie over the situation.

One supplier, speaking on condition of anonymity, told Tribune Business there appeared to have been no change in the PHA’s procurement “stance”.

“You’re talking about millions and millions of dollars being routed out of the country to go direct,” they said, adding that “close to 1,000 persons” worked in the Bahamian medical equipment and pharmaceutical supply business.

Tribune Business revealed last month that the suppliers met with Senator Frank Smith, the PHA chairman, over concerns that the Authority and its procurement manager were excluding them all from the tender process by going directly to overseas manufacturers - many of whom they already represented in the Bahamas.

Mr Smith promised to get back to the industry on the the PHA’s procurement policy, in a bid to address their concerns, but up to yesterday this had not happened.

“There has been no feedback from Frank Smith, and even though Herbert Brown [the PHA managing director] has indicated they invite or encourage Bahamians to participate, they are still sending out tenders for the company facilitating for them, and are still taking the same approach,” Mr Rolle told Tribune Business.

“They [the PHA] haven’t issued any instructions to them about the participation of local manufacturers’ representatives. They’re moving ahead and seem to be totally ignoring the matter that was brought to their attention.”

While still contemplating arranging a meeting with the Prime Minister, Mr Rolle yesterday conceded that he was “not sure how much success that’s going to have”.

He based his analysis on the fact that the legislative and regulatory framework underpinning the PHA gives it a huge amount of autonomy from the Government, with authority over its operations and direction largely in the hands of Mr Smith and the Board.

Mr Rolle said the PHA Board was supposed to have met before Christmas, but no information had been forthcoming. He expressed disappointment that it had seemingly failed to address the sector’s concerns, particularly since a number of Bahamian businessmen were among its directors.

The PHA, in a statement issued before Christmas, denied that there was a policy of exclusion for Bahamian medical equipment and pharmaceutical suppliers over the ongoing Princess Margaret Hospital (PMH) expansion, but the continued complaints raise questions about whether its strategy runs counter to the Government’s professed commitment to put ‘Bahamians first’.

Mr Smith did not return a voice mail seeking comment that was left on his answer phone at Sunshine Finance yesterday, while an e-mail sent to PHA spokesperson, Judy Hamilton, also went unanswered by press time.

But Mr Rolle told Tribune Business: “It’s extremely disappointing and concerning. Here you have a procurement process of this size that comes around once every 10-15 years, and they’re [local distributors] being left out of the process.

“The concern for the local Bahamian companies is that they don’t participate, so they don’t stand to gain any revenues.”

Mr Rolle said each tender for equipment and pharmaceutical supplies that had gone out was worth several million dollars.

The concerns raised by Bahamian medical equipment and pharmaceutical suppliers are that the PMH expansion’s procurement manager, GBA Equipment Consultants, is cutting them out of a tender process that lacks transparency and fairness.

The industry believes the PHA’s rationale for ‘going direct’ to the manufacturers is a belief this will result in cost savings, but it is sceptical these will be achieved.

Mr Rolle pointed out that apart from lacking the necessary supply chain and logistics management, services normally performed by the Bahamian distributors, the PHA would be unable to access the price ‘discounts’ available to local representatives.

“I think it’s actually going to create a higher cost for them,” the BCCEC chief executive, pointing out that the PHA would be forced to take manufacturers’ pricing, increasing its costs.

He added that the PHA might not be able to access credit from the manufacturers, which it currently received from Bahamian distributors, requiring it to pay large sums up front.

And there was also the potential problem that the PHA’s bid to ‘go direct’ would cut across existing contracts between Bahamian distributors and their manufacturers.

The distributors had already invested heavily in manufacturer relationships and training staff on equipment, raising questions about how easily the PHA would find it to obtain parts and servicing if Bahamian firms were cut out of the loop.

“You have a significant opportunity for local businesspersons to participate in sizeable activity. It’s very disconcerting that persons do not see fit to include local businesses as participants to the process,” Mr Rolle told Tribune Business.

“None of the investment being made in the Critical Care Unit will be recycled back into the local economy through vendors and their employees. It’s very, very concerning.”

Mr Rolle said it was not just one or two disgruntled firms that were complaining, but a whole industry. Some 20-plus companies had been represented at the December meeting with Mr Smith, and these included numerous competitors for the same business.

“If they’re all being squeezed out, left out of the process, they realise that if they don’t come together all will suffer,” he added.

Touting the fact that Cavalier Construction, a Bahamian company, was building the Critical Care Block, the PHA last month said: “While we seek an inclusive, fair and transparent process, we are cognisant that taxpayers are entitled to the best value possible for tax dollars with respect to this substantial investment.

“In this regard, we encourage participation by all Bahamian suppliers who feel that they may be in a position to provide more competitive prices and value for money to the Authority.

“What the Public Hospitals Authority will rigorously avoid, as we complete this transparent process, is a few suppliers seeking to obtain an unfair advantage or some exclusive arrangement. All Bahamians must enjoy the same opportunities.”