We write on behalf of Simed International BV of the Netherlands with particular reference to an article entitled 'The new hospital - facts and background' by former Finance Minister John Dalli on the medical equipment tender for the new Mater Dei Hospital, published last Sunday.
Our clients cannot agree with Mr Dalli's interpretation of certain facts related to this issue and would like to correct a few inaccuracies with a view to set the record straight.
Appeals Board decision
Mr Dalli alleges that on October 28, 2003, the Appeals Board "decided to suspend the award of the tender to INSO until a review exercise was conducted". This statement is factually incorrect. The Appeals Board - and here we quote verbatim - decided "to annul the decision to award the tender to INSO SpA".
It is therefore unequivocally clear that the initial award made to INSO by the Contracts Committee was not suspended by the Appeals Board, as alleged by Mr Dalli, but actually annulled. In other words, this initial award was to be treated as though it never existed.
Mr Dalli also alleges that the Appeals Board also "granted (Simed) all the possibilities to review their offer".
In this context it is to be noted that, in its decision, the Appeals Board further recommended that the Foundation for Medical Services (FMS) should "seek and obtain clear and unequivocal clarification (from Simed) regarding all the items and areas highlighted by the technical, financial and legal advisers commissioned by the Adjudication Board" and that should such a clarification exercise prove substantially responsive, "the tender may be awarded" to Simed.
On this particular point, Mr Dalli writes that the Advisory Board (appointed to advise FMS following the Appeals Board decision) deliberated "for nearly two months" on Simed's response and quoted the Advisory Board's contention that Simed's response did not provide the "clear and unequivocal clarification" required by the Appeal's Board judgment and hence his eventual decision approving a recommendation to "resuscitate" an annulled decision to award the contract to INSO.
As far as this particular issue is concerned, the facts were as follows:
a) on November 3, 2003 (exactly six days after the Appeal Board's decision), Simed's Maltese agent was instructed by FMS to retrieve a sealed document from its offices which, as was claimed, contained the requested clarifications;
b) the document was duly retrieved from FMS chief executive Emanuel Attard but, on examination by Simed's legal advisers, was found to contain no list of requested clarifications;
c) Simed exchanged correspondence several times with FMS requesting this list of clarifications but these - for reasons only known to FMS - were never remitted to Simed;
d) notwithstanding, FMS inexplicably requested Simed's comments by November 18, 2003, on a yet-to-be-received list of clarifications;
e) in spite of FMS's persistent silence regarding the requested list of clarifications, on November 18, 2003, Simed handed over a letter to FMS with a list of remarks on all legal, financial and technical matters, which appeared to lack clarity from the evaluation reports that were made public during the Appeal Board meetings and at the same time made it absolutely clear that it remained available at all times to submit further clarifications as were necessary;
f) FMS meanwhile remained non-communicative and non-co-operative, but on December 26, 2003, Simed were informed of strong rumours to the effect that FMS had decided to award the tender; and
g) on December 29, 2003, Simed handed over a letter to the Department of Contracts requesting inter alia the details of the decision taken by FMS and, later on that day, the Department of Information issued a press release informing the public that the medical equipment tender had been awarded to INSO.
On the strength of the above facts, it is more than evident that the FMS Advisory Board expected Simed to respond to a list of required clarifications which in fact was never remitted. Simed's repeated pleas to be furnished with this list to enable it to respond adequately apparently fell on deaf ears!
Price
In his article, Mr Dalli claims that the offer submitted by INSO (which was eventually awarded the contract) was the cheapest offer, while Simed's was €7 million more expensive. Again, this allegation is factually incorrect for the following reasons:
a) during the hearing before the Appeals Board, it transpired that INSO were incorrectly and illegally granted the opportunity to make changes to their offer;
b) in spite of being granted this unjust advantage, INSO still failed not only to quote for substantial equipment to the tune of €2,590,000 (see British technical team Secta final report October 2002 pages 1-8, para. 1.1.16 xxiii) but also failed to include various important pieces of medical equipment, such as the Stereoactiv Breast Biopsy System, the Gamma Camera and the new Hyperbaric Antechamber transfer lock for the Hyperbaric Chamber Suite which together amount to several more millions of euros;
c) more importantly, INSO also incorrectly refrained from including in their bid all amounts due in duties and VAT; and
d) the tender had to be awarded on the basis of very strict criteria which, besides the price of equipment, also had to include post-warranty and maintenance costs, and mandatory spare parts.
It is to be pointed out that when the tender process commenced, INSO's bid was indeed portrayed as being the lowest cost-wise. When, however, certain facts began to surface during the Appeals Board hearings, it transpired that INSO had incorrectly failed to include the above items which would have exposed its bid in its true light as actually being €10 million more expensive than Simed's.
On the strength of the above, Mr Dalli's allegation that INSO's bid was €7 million cheaper than Simed's is therefore factually incorrect.
Zahra case
Simed were faced with a situation where:
a) the decision to award the medical equipment contract to INSO was annulled by the Appeals Board;
b) in spite of illegally being granted the opportunity and unjust advantage to apply changes to its offer, INSO still incorrectly refrained from quoting for and from including important medical equipment, duties and VAT running into several millions of euros and had these been included - as they legally and correctly ought to have been - the final result should have rendered its offer €10 million more expensive than Simed's;
c) Simed managed to prove their positive track record regarding quality and after-sales back-up while INSO could not offer this as they did not possess local technical support;
d) all tenderers, including Simed, were required and actually submitted a compliance document for each and every piece of equipment listed in the offer, but INSO inexplicably failed to do so, in spite of the fact that this was a mandatory condition; and
e) the process of clarification imposed by the Appeal Board decision failed to materialise due to the FMS's Advisory Board's silence and lack of co-operation in specifically stipulating the nature of the clarifications expected from Simed.
It was therefore more than evident that Simed had the best offer in all aspects and yet they were the losers, while INSO, with an initial decision to award the contract in its favour having been annulled by the Appeals Board and with a qualitatively poorer but more expensive offer, were awarded the medical equipment contract.
It was against this background that Simed decided to hire a private detective in an attempt to unearth what may possibly have been going on behind the scenes. Mr Joseph Zahra, who was recommended by a Maltese contact, led Simed to believe that he had access to sources who were in a position to confirm suspicions that irregularities had taken place in the tender award and was eventually hired to investigate against payment of €9,500 (Lm4,077).
As is well known, the report that Mr Zahra compiled contained several grave accusations but did not provide the required proof, the production of which was repeatedly insisted on by Simed, but which was never forthcoming.
Furthermore, Simed indeed agreed to compensate Mr Zahra but only if the required proof be made available and also in the eventuality that the proof produced would lead to a reversal of the award of the contract to INSO.
Contrary to what is implied by Mr Dalli, neither Simed nor their legal advisers exerted any influence over Mr Zahra in any way to concoct "the report they wanted". Simed were only interested in seeking justice and unearthing the whole truth regarding the award of the Mater Dei medical equipment contract and the penning of the report in question was Mr Zahra's sole responsibility.