An outrage at overpricing in government emergency procurement operations was the trending topic over the weekend. The spotlight was mainly on the RD$1.5 billion contract awarded to Tools Resources Enterprises Toreen SRL, a multi-operations company with a registered capital of RD$100,000. The company was awarded the bulk of all medical supply contracting under special conditions for procurement created by the present National State of Emergency.
As reported, the company registered itself as a medical supplier to coincide with the government declaration of the State of Emergency. Investigative journalist Altagracia Salazar had explained that the accountant and the chauffeur of the company appear as the owners of Tools Resources.
In an interview with journalist Juan Bolivar Diaz, Chanel Rosa Chupani, director of the National Health Service (SNS), defended the legality of the contract that he had signed. He said that under emergency state conditions the only requirement was that the company deliver in the five days stipulated in the contract.
In the interview with Diaz, Rosa said that the companies had not complied with the delivery deadline and the order would be canceled. He downplayed the importance of irregularities in the contracting by telling journalist Diaz that the SNS had advanced only RD$4 million to Tools Resources for the RD$1.5 billion medical supplies order. Canceled orders amount to RD$2 billion in contracting.
The irregular contract became known after the opposition party, the Modern Revolutionary Party (PRM) revealed details of the overpricing that benefited the little-known suppliers. The major medical device suppliers did not participate in the fast-tracked bid.
Goods that are available on the local market were increased in price 4-5 times for the mass purchase for the supplies to be used during the coronavirus. Modern Revolutionary Party (PRM) president Jose Ignacio Paliza says a N95 mask that sells for RD$254 in Farmacia Carol was purchased for RD$1,000 apiece in the winning bid.
Investigative journalist Nuria Piera aired her Saturday, 4 April show with a segment on the overpricing in the bid. “In these times of crisis when controls are minimum, the sharks made money when the purchases are freed of government controls. Lots needs to be purchased, and fast,” she explains when referring to Decree 133-20 that authorizes the purchases. “The gates are opened to all kinds of irregularities.”
Piera pointed to the price ceiling presented by the Ministry of Public Health and how companies had offered higher prices than these, and nevertheless won the bids. She mentioned several examples, including one bid beneficiary Balmes Import, which had won a medical supplies contract for RD$511,702,752 when the ceiling for the bid was RD$192 million. She also mentioned contracts for millions of pesos where suppliers had hours to present the bid and deliver the goods.
Piera noted that Yocasta Guzman, in charge of government procurement, has said the case would be investigated.
Journalist Altagracia Salazar on her Sin Maquillaje morning radio talk show presented quotes for established medical suppliers that were many times lower than what the government had contracted for.
The Minister of Public Health defended the purchases and said the claims of corruption and overpricing in procurement of medical supplies were irresponsible given the scarcities that are behind the increase in prices.
The government announced on Sunday, 5 April 2020 that it had named an oversight committee to oversee the purchases. Previous oversight committees in the Medina administration are dysfunctional.
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Juan Bolivar Diaz and Chanel Rosa Chupani interview
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Altagracia Salazar Sin Maquillaje
6 April 2020