Simed insists on public inquiry

Renè Formosa, chairman of the Foundation for Medical Services, claims that the clarification process was carried out "in strict compliance with the provisions of clause 26.1 and in the time scale which fully safeguards public interest".

First of all, there was no process of clarification at all. There was just a request to Simed to submit its written clarifications, without any feedback and without FMS asking Simed for further clarifications on those subjects that where not yet clear enough.

Clause 26.1 allows only written clarifications by the client. The appeals board ordered a process of clarifications which, in my opinion, means a series of written questions and answers until a satisfactory level of responsiveness is or is not reached.

While the legal expert declared Simed's clarifications fully responsive, Grant Thornton advised the same on all matters except on number two, where they advised FMS to seek further clarifications from Simed on the subjects in question. On another subject there was disagreement between the legal and financial experts whether this matter was already satisfactorily clarified. The advice to seek further clarifications by Grant Thornton came even as early as November 26, so FMS cannot claim urgency or public interest as a reason why this advise was not followed.

In a process of clarifications, conducted by both parties in good faith, all outstanding matters could have been solved in a matter of days, rather than weeks, as INSO apparently needed in the summer of 2002 and which were declared by the appeals board to be modifications rather than clarifications.

FMS also suggests that Simed complained about the clarification "process" because it would be necessary for Simed to effect changes or modifications in its bid to render it more compliant, which would be inadmissible from both the tender documents' point of view and in terms of the criteria established by the appeals board.

Simed stresses that in no way would it need to change anything to make its bid sufficiently responsive. Only INSO needed many modifications and was allowed to do so, as upholding their award, despite having breached repeatedly this and several other conditions, shows. As Orwell says: "All animals are equal, but some are more equal than others".

During the clarification process, Simed does not even need to classify modifications as "typing errors" in order to make items compliant without registering them as changes, as happened frequently during the clarification process that took place under the responsibility of the director of contracts in the summer of 2002.

According to Simed's own assessment, the first clarifications should have given a technical compliance well in excess of 95 per cent, when evaluated, as ordered by the appeals board, in a process of clarifications by an objective, unbiased board and technical experts, such as Muscat Azzopardi & Associates and Grant Thornton. Over 90 per cent compliance should be more than sufficient, considering the fact that FMS, the director of contracts and the minister of finance consider 83 per cent sufficient to award the contract to a bidder that, according to the appeals board, could only reach this figure by violating several clauses of the tender document, each of which would result in disqualification.

Secta, in their technical evaluation of Simed's clarifications, reported, with regard to most items: "Cannot evaluate without further examination of bid document". The apparent low responsiveness of Simed's clarifications on technical matters is purely the result of Secta's inability to access the documents in Simed's original bid that we referred to in our clarifications. Simed's apparent low responsiveness had, therefore, nothing to do with Simed's failure to give satisfactory clarifications.

We are pleased that FMS at least considers Simed as a reputable company with sufficient experience to find out themselves what areas needed clarifications.

The fact that we did manage within the deadline to give satisfactory clarifications to all legal and practically all financial matters shows indeed that we do know our job. However, considering that FMS had no problem whatsoever to highlight, in their report, 17 areas that needed clarifications, but repeatedly refused to give these to Simed, shows that, at least, they were not very cooperative.

With regards to the timing of the decision on December 26, Simed does not understand why, after delaying an evaluation for one-and-a-half months - something that could have been done in a few days, a decision was then taken within a matter of hours by the adjudication board, passed on to FMS, who took a decision and communicated it to the director of contracts, who, again, communicated it to the minister of finance who, apparently, informed INSO on the same day about the decision of the "government", the most senior members of which were abroad. This means the red tape for an award worth close to €100 million was suddenly passed on Boxing Day, usually a day when people are off on holiday.

FMS doubts Simed's quote of €1 million for mandatory spare parts to be sufficient, considering that other bidders had much higher quotes. I would like to stress that Simed is not responsible for other bidder's quotes and that the awarded bidder is obliged to submit a performance bond of 10 per cent of the contract value. Should Simed not commit to the conditions of its written offer, then the government has the right to draw from this performance bond. This applies to the matter of spare parts as well as to the clarifications given by Simed on technical matters and which gives Simed's tender a compliance of well over 95 per cent.

The price difference for spare parts, however, can be easily explained. "Mandatory spare parts" are defined (during the Q&A process preceding the closing date) as those parts that need regular replacement due to wear and tear and this does not include parts that have to be replaced by normal, unscheduled breakdown. In "car terms" oil, oil filter and air filter are mandatory; engine parts that are supposed to last life-long but, nevertheless, have to be replaced, are not. The latter fall, even if due to gross negligence, under the five-year post warranty maintenance contract; so the government is covered on all sides.

Finally, price: I strongly reject the suggestion that I would be double counting figures with respect to INSO's five-year maintenance and service contract. The figures I quoted are direct from the Grant Thornton financial report and are not the result of adding up figures. It would be interesting to see if an independent inquiry would qualify INSO's repeated statement, that the €12.81 million for spares is already included in their maintenance contract as again an attempt to change price, which requires disqualification. From the Grant Thornton report, at least, it apparently did not appear to have been included.

Also the Secta report (chapter 6.2 and 6.3) which on technical matters may be considered more competent, quoted the total of the five-year post-warranty maintenance and spare parts to be €32,232,562 for INSO and €19,513,769 for Simed (€18,514,521 post-warranty five-year service contract plus €999,248 mandatory spare parts, to be correct).

We strongly reject the price comparison FMS made in their press release published on Wednesday, where Simed's quote of €94.35 million (published quote for equipment including VAT plus five-year post warranty maintenance) with INSO's €87.08 million, which does not include VAT nor the items INSO failed to quote for, such as the €500,000 gamma camera, the total of which exceeds €3 million. It also assumes that INSO's spares are already included in their price for the five-year post-warranty maintenance, a position Grant Thornton in their report disagrees with.

With respect to INSO's compliance, I would also like to refer to last Tuesday's "Bondiplus" programme. INSO's lawyer insisted that despite the breach in four important clauses, each of which should result in disqualification, "INSO's original offer still stands". We have our own views as to whether INSO should have been disqualified for those breaches but, at least, their lawyer is referring again to INSO's original tender, that had only 53 per cent compliance and was referred to by the technical experts Secta as being "of poor quality and with many items of dubious quality". The poll held during the programme demonstrated that well over 90 per cent of the viewers would prefer quality over price.

It is rather strange that these clarifications from both sides are now happening through the media, which proves again the point that a real clarification process did not take place.

The whole situation with accusations and counter-accusations is becoming quite cloudy and the only way to solve this is by an independent public inquiry.

Mr Dubbers is Simed's area manager.