Gems’ R600m dodgy contract exposed
The Government Employees Medical Scheme (Gems) has irregularly issued a R600m multivitamins contract, in violation of the Public Finance Management Act and other regulations.
The contract was awarded to Activo Health in December last year through the quotation system. This was despite the PFMA requiring state contracts above R500 000 to be advertised and subjected to competitive bidding.
A Pretoria News report says Gems appointed pharmaceutical company Activo Health on Christmas eve to supply multivitamins A-Z to its 1m members for a period of five months, starting from January 2022.
At the current retail price of R130, the contract is valued at R600m.
The newspaper notes its sources said the decision to appoint Activo Health was done abruptly, and the approvals fast-tracked in breach of normal procurement and regulatory processes.
‘They have pursued this initiative with complete neglect and disregard for appropriate procurement policies, dispensing, and clinical best practice. This is contrary to Good Pharmacy Practice regulations as determined by the SA Pharmacy Council.’
Another industry source said black pharmaceutical manufacturers were sidelined despite playing a major role in supply of over-the-counter multivitamins, cough mixtures, and Covid-19 PPE.
Gems principal officer, Dr Stan Moloabi, signed the contract, notes the Pretoria News report.
Moloabi confirmed that Medscheme sourced quotations and adjudicated the process on behalf of Gems. However, he said GEMS made the decision to appoint.
‘The scheme mandated Medscheme to analyse claims trends for the most commonly claimed vitamins and obtain quotations. The scheme then adjudicated the quotations, to identify a preferred vitamin supplier based on procurement criteria outlined to all prospective suppliers.’
Moloabi reportedly did not respond to specific questions on whether due processes were followed and whether or not the tender was advertised.
He said the Council for Media Schemes protocols did not apply to Gems’ strategic purchasing processes.
Moloabi maintained that all Gems processes were conducted in line with its rules and in compliance with the Medical Schemes Act.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
