NONE of the seven supply contracts for personal protective equipment worth P1.387 billion approved by the Procurement Service of the Department of Budget and Management (PS-DBM) in 2020 and 2021 had a Certificate of Medical Device Notification (CMDN) from the Food and Drug Administration.
“In the absence of the CMDN, the personal protective equipment were not authorized for sale or public use,” the Commission on Audit said in its report released last July 18.
State auditors noted that under FDA Circular No. 2020-031, it was made obligatory for importers and manufacturers of PPE to first secure a license to operate (LTO) and a CMDN “prior to commercial sale and distribution of such medical devices.”
The term PPE covers medical masks (N95 and surgical masks), shoe covers, gloves, head covers, and gowns usually worn by medical personnel.
Since the PS purchased the PPEs for other government agencies, COA said those who wore them were not assured of the quality and safety of the items distributed to them.
“Consequently, the PS cannot assure its client-agencies of the safety of the personal protective equipment especially to the medical staff users who are directly exposed to the COVID-19 virus during this pandemic,” the audit team pointed out.
As the representative of the end-user agencies, it was the PS that prepared the technical specifications for the PPE that was to be purchased.
Auditors said that out of the seven contracts, two did not include product notification or CMDN as a requirement.
For the other five contracts, the PS included the CMDN as a requirement for participating bidders yet the purchases were still approved despite failure of the five suppliers to submit the CMDN.
Six of the contracts shared the same date for their purchase orders — December 29, 2020.
The first two involved full range PPE sets and were worth P450 million and P225 million.
The technical specifications for both did not include the CMDN.
Based on records obtained by the COA, full payments for both contracts have been released by the PS.
The other four contracts were worth P58.834 million, P59.845 million, P57.419 million, and P29.72 million all involving delivery of surgical masks. Despite non-submission of CMDNs, all were still paid in full by the PS.
Unlike the first six contracts that underwent public bidding, the last and the biggest contract for full range PPEs worth P505.708 million was a negotiated procurement, with the PS citing emergency due to the pandemic.
Like the other contracts, the supplier also did not submit the CMDN.
Government auditors said that as of December 31, 2021, no deliveries and payment have been made on the last contract.
The audit report identified Hafid N’ Erasmus Corporation as the supplier for the four contracts on surgical mask and the biggest contract that was not paid as of the yearend.
In its comment to the audit findings, the Procurement Service invoked the emergency nature of all seven contracts.
It argued that because of “shifting quarantine classifications, community lockdowns, and shifting work arrangements,” existing rules and regulations may have been no longer applicable or difficult to implement.
