• Swimming goggles delivered instead of safety goggles
• Technical evaluation overlooked in emergency purchase
• SPC says no specifications were available at the time

A recent report by the National Audit Office (NAO) has exposed a major procurement blunder at the State Pharmaceuticals Corporation (SPC) during the Covid-19 pandemic, where swimming goggles had been delivered instead of safety goggles, causing a loss of millions of rupees in public funds.

In 2020, an emergency procurement by the SPC valued at Rs. 14.27 million had been conducted to purchase 10,000 safety goggles at Rs. 1,400 each and an additional 200 safety goggles at Rs. 1,350 each. 

However, the procurement process, which had been conducted through direct purchase from a single supplier, had lacked a critical technical evaluation.

The NAO’s investigation has revealed that the decision to bypass a competitive bidding process and proceed without proper scrutiny had resulted in a disastrous outcome.

Contrary to the Government Procurement Guidelines, which allow for a maximum 20% advance payment, the supplier had been paid Rs. 7 million – 50% of the total contract value – as an advance.

This has violated the stipulated regulations, adding to the irregularities in the procurement.

The NAO report has revealed an even bigger shock: the supplier had delivered 10,200 swimming goggles instead of safety goggles as per the original purchase order, quotation, and goods received note. 

The procurement oversight had gone unnoticed until a physical inspection carried out on 9 and 24 November 2021 had disclosed the massive error.

The financial repercussions of this blunder have been significant. Out of the 10,200 swimming goggles, only 54 had been sold, priced at Rs. 1,610 each. 

The unsold 9,945 goggles, with a total value of Rs. 13.92 million, remain in stock, creating a significant inventory burden for the SPC. 

Furthermore, a shortage of 201 goggles, valued at Rs. 281,400, has been identified, raising concerns about further potential losses.

The NAO report has criticised the lack of necessity assessment and proper sales forecasting in the procurement process, which led to the SPC being burdened with thousands of unsellable swimming goggles.

The NAO has highlighted another serious mismanagement incident where the procurement of Personal Protective Equipment (PPE) during the Covid-19 pandemic had cost the country a staggering Rs. 29.62 million. 

The failure stems from a flawed purchasing process in 2020 for 5,000 PPE kits meant for the Medical Supplies Division (MSD), where neither the MSD nor the SPC had prepared detailed requirement specifications for the kits.

The SPC had spent Rs. 21.49 million on the purchase of PPE based solely on a proforma invoice from a single supplier. No quotations had been obtained and no technical evaluation had been conducted to ensure the supplied kits met necessary medical standards. This lack of due diligence had set the stage for a costly error.

Of the 5,000 PPE sets ordered, the first batch of 2,000 kits delivered to the MSD had been rejected. The MSD had pointed out that instead of full PPE kits, only isolation gowns had been provided, although the order submitted had clearly requested complete PPE kits. 

Despite the rejection of the first batch, a second batch of 3,000 kits had also been sent, only to be rejected for the same reason.

As a result, the SPC had not only failed to reclaim the Rs. 21.49 million paid to the supplier but also lost an additional Rs. 8.13 million in service fees. Altogether, this had amounted to a total loss of Rs. 29.62 million.

The NAO report further reveals that as per the physical inspection conducted during the year under review, 4,997 PPE kits remain in stock, with a shortage of three kits unaccounted for. This failure highlights a lack of accountability and technical oversight in managing public procurement, especially during a time when proper medical equipment was crucial in the fight against the pandemic.

Responding to the NAO findings, SPC General Manager Dinusha Dasanayake explained that during the onset of the Covid-19 pandemic, the SPC had faced challenges in supplying PPE kits to both the Government and private sectors.

“At that time, we didn’t have specific requirements for PPE kits because we had never previously procured them in Sri Lanka. We purchased PPE items individually rather than as full kits. We were struggling to provide PPE kits for Covid-19 patient care and we procured various items like goggles and boots as part of PPE. 

“The basic purpose of safety goggles is to prevent anything from entering the eyes. Swimming goggles also serve this function. In water, swimming goggles prevent water from entering, so at that time, with the intention of assembling PPE kits, we purchased swimming goggles. 

“There are no separate specifications for safety goggles, and since swimming goggles serve the same purpose, we included them,” Dasanayake explained.

He went on to say that the SPC had procured the items, but as the situation developed and fully equipped PPE kits became available in Sri Lanka, they had no longer been able to sell the goggles.

“This is the issue. The stock is still with the SPC. We tried to sell them through our outlets, but frankly, it was unsuccessful. We are now considering selling them for other purposes, like disaster management, where such goggles could be useful. We’re exploring alternative ways to sell these goggles. When Covid-19 first hit, our supply chains were completely disrupted and we did our best to secure these items. It was done in good faith,” Dasanayake said.

Referring to the issue with the isolation gowns, he explained that they were also part of the PPE kits.

“Dr. Ananda Wijewickrama, who initiated Covid-19 treatments, personally requested me to provide PPE kits. At that time, we couldn’t obtain a complete PPE kit from any source. I personally delivered the first 38 PPE kits to the National Institute of Infectious Diseases (NIID). 

“There was a local company providing parts of PPE kits, which were originally used for cancer and radiology treatments. No one was willing to collect and deliver these items to the NIID due to fear of the virus. I drove my vehicle and handed over the first 38 kits to Dr. Wijewickrama myself. We are doing our best to minimise the loss in this regard,” Dasanayake added.