Dalli defends hospital contract award

Finance Minister John Dalli yesterday described the process leading to the award of the Lm25 million medical equipment contract to INSO as a long, transparent and strong one.

The Italian firm, Mr Dalli said, had the lowest bid, at €63,915,397, and was 90 per cent compliant with the tender documents.

The minister said negotiations for the signing of the contract would now start under instructions from his ministry that the Lm25 million listed in the tender had to be reduced.

Simed, an unsuccessful bidder, has called on the government to hold a public inquiry to investigate the "abusive way" in which the authorities awarded the contract to INSO.

The award followed a second adjudicating process set in motion after an appeals tribunal had, in early November, annulled the original decision to award the contract to the same company. The appeal had been filed by Simed and Hospitalia International.

Mr Dalli yesterday denied there was any abuse and said that if Simed believed it had a case it could go to court and sue the government for damages.

Simed's offer, the minister said, amounted to €74,841,305 and was only 76 per cent compliant. Although all three tenderers had shortcomings, INSO's offer was found to be the best.

He said the decision to award the contract to the chosen company was not a political one and the hospital project had never been and was still not part of the Italian financial protocol.

The appeals tribunal had asked the Foundation for Medical Services, which is in charge of the project, to give Simed the opportunity to clarify elements in its bid that were not in conformity with the tender documents.

The FMS asked for such clarifications and appointed an advisory board, under the chairmanship of Judge Victor Caruana Colombo, to scrutinise the adjudication. Grant Thornton Consulting Ltd, Muscat Azzopardi & Associates and Secta were appointed to study Simed's clarifications.

After seeing these experts' reports, the foundation's advisory board concluded that Simed had not given sufficient clarifications. It passed on this advice to the FMS, which agreed with the conclusions reached and passed them on to the contracts committee.

FMS advised the committee that further delay in the award of the tender would mean further increases in the cost of the project.

The committee recommended to the government that INSO be awarded the contract and the government approved this recommendation.

Mr Dalli said it was not true that the contracts committee had reached its decision in one day. Although the advisory board presented its report to the FMS on December 26, and the foundation wrote to the director of contracts on the same day, the committee had been abreast of all the developments in the past two months.

He said the process of clarification was not carried out by the government but by the appointed experts. The government had not been involved in the process at all.

Mr Dalli said that contrary to what Simed's lawyer had claimed, there was no letter which specified 17 areas that required clarification by Simed. The 17 areas were only specified in a confidential board paper, of which, it seemed, Simed had a copy.

The advisory board's report to FMS stated that the technical evaluation showed that Simed had not provided sufficient information, had provided incorrect statements and information that was not substantiated and had admitted that some items did not conform to specifications. It had left 262 items without clarification.

The financial evaluation showed that Simed's response was not substantially responsive on the cost of maintenance and spare parts and on the annual running cost and consumables.

Asked how much the delay in the award of the contract had cost the country, Mr Dalli said the cost had not been calculated but this was a process which had to be carried out according to regulations.