29 March 2016
An OIG investigation found that a 2011 tender for medical equipment worth US$311,637 involved collusion, falsified bid documents, shell companies, and price manipulation. The equipment was supplied by Bengal Scientific & Surgical to Bhuiyan International Corporation, a procurement agent that managed the tender on behalf of the National Tuberculosis Control Program (NTP), a Global Fund recipient of funds. The Global Fund has since reinforced significantly procurement practices and the agent is no longer in operation.
Since 2003, the Global Fund has made total investments of US$ 369 million in Bangladesh to fight AIDS, tuberculosis and malaria as of February 2016. Bangladesh ranks sixth out of the world's 22 high-burden tuberculosis countries.
The OIG identified that at least four of the six bidders in the tender had colluded and submitted falsified bids to give the impression of a competitive tendering process. The false bids were nearly identical in appearance and content, proposed the same products at manipulated prices, and contained the same or fabricated supporting documentation.
Although the investigation confirmed that Bengal Scientific & Surgical had delivered the right quantity and goods, the prices it charged for the equipment were marked up on average about 150%, or US$ 186,591, over the wholesale costs- an amount it was unable to fully justify and a likely consequence of the collusion and fraud.
The OIG concluded that Bhuiyan International was unqualified for its role and ineffective in interrupting the fraud. The procurement agent ceased operations soon after the grant was closed in June 2011.
Beginning in July 2011, the Global Fund put in place corrective measures regarding the procurement of all health products and medical equipment for NTP's tuberculosis grants. Health products including medical equipment are procured through a central procurement body called the Global Drug Facility. Non-health products are procured through an international procurement agent approved by the Global Fund.
This investigation report is the last of a series of backlogged cases relating to investigations started before 2012 (so-called 'legacy cases') that the Office of the Inspector General is now able to finalize and publish due to increased headcount.
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The Office of the Inspector General safeguards the assets, investments, reputation and sustainability of the Global Fund by ensuring that it takes the right action to defeat AIDS, tuberculosis and malaria. Through audits, investigations and consultancy work, it promotes good practice, reduces risk and reports fully and transparently on abuse.
Established in 2005, the Office of the Inspector General is an independent yet integral part of the Global Fund. It is accountable to the Board through its Audit and Ethics Committee and serves the interests of all Global Fund stakeholders. Its work conforms to the International Standards for the Professional Practice of Internal Auditing and the Uniform Guidelines for Investigations of the Conference of International Investigators.
The Global Fund believes that every dollar counts and has zero tolerance for fraud, corruption and waste. Through its whistle-blowing channels, the Office of the Inspector General encourages all to speak out to report fraud, abuse and human rights violations that prevent Global Fund resources from reaching those who need them.