Still no vaccine cold chain

THE CORNER ORACLE - Andrew J. Masigan - The Philippine Star

In President Duterte’s message last week, he confirmed government’s intention to vaccinate 100 citizens per day across 4,500 vaccination centers, nationwide. This means that when the vaccination program comes to full swing in the third quarter, as many as 450,000 Filipinos will be vaccinated daily. The goal is to inoculate 70 million Filipinos before the end of the year, enough to achieve herd immunity.

Is the program achievable? It largely depends on two factors – the timely arrival of vaccine supplies and the readiness of the DOH’s logistics cold chain. On vaccine supplies, Gen. Carlito Galvez claims that the bulk of 140 million vaccines will arrive in April and May, the balance of which will arrive in tranches throughout the rest of the year. As to whether or not this claim holds true remains to be seen. Suffice to say that the orders have already been made. As for the logistics cold chain, the DOH is still not prepared as of this writing and this should worry us all.

As I mentioned in this corner two weeks ago, the DOH is outsourcing all aspects of its logistics cold chain to a third party. With a budget of P1 billion, it solicited bids from private logistics companies to receive the vaccines from their points of entry, clear them through customs, provide temperature controlled warehousing and facilitate final delivery to the vaccination centers.

Mystifyingly, however, the Request for Quotation (ROQ) issued by the DOH last February lacked many important details. Among them, the schedule of vaccine delivery, location of drop-off points and, more importantly, the number of vaccines to be received, stored and deployed. All these were left for the bidders to assume.

Three logistics companies emerged as viable bidders. Royal Cargo who bid P380 million, Air 21 who bid P530 million and Zuellig Pharma who bid P999 million. Since President Duterte and DOH Secretary Francisco Duque both announced, on numerous occasions, that government’s intention is to inoculate 70 million Filipinos with two jabs each, we all worked on the assumption that the ROQ referred to processing 140 million vaccines.

But a closer look at the bids submitted by the logistics companies showed that each assumed varying quantities of vaccines to be handled. Royal Cargo’s bid of P380 million indicated that it would handle 70 million vaccines. Its bid comes out to P5.42 per dose. Zuellig’s bid of P999 million indicated that it would only handle 20 million doses or P49.95 per jab. (As of this writing, I have not confirmed the volume assumption of Air 21.)

The substantial cost disparity between the two bids can be attributed to the fact that Royal Cargo did not impute the cost of brokerage fees in its quotation while Zuellig did. Also, Zuellig’s bid covers post-delivery services such as second jab monitoring, adverse effects reports, vaccine supply replenishment, etc., while the services of Royal Cargo ends at the point of delivery, as was indicated in the ROQ. As to whether the added services of Zuellig justifies the price difference is something the bids & awards committee of the DOH must figure out.

Zuellig’s logistics cost is consistent with the amount it is charging those purchasing vaccines from private importer, ICTSI Foundation. Profiteering it is not, Zuellig claims. They are merely passing-on the cost of its investments in new cold storage facilities and a customized digital platform for vaccine administration.

But all these are now moot and academic. As expected, the DOH’s bidding exercise was declared a failure last March 8 since bidders “failed to comply with all the requirements” of the DOH. This comes as no surprise, given the many details left out in the ROQ. How could the bidders possibly meet the needs and expectations of the DOH if they were not defined in the first place? The DOH has no choice but to start the bidding process all over again even as the vaccines are already arriving, albeit in trickles.

Last March 15, the DOH issued another ROQ (a second bidding exercise) with some changes.

It will be recalled that in my previous article, I argued that to require 750 thermal bags and 2,000 pallet positions of temperature controlled warehousing was excessive given the quantities of vaccine due to arrive. Well, in the new ROQ, the number of thermal boxes required was reduced from 750 to 500. As for the warehouse size, the DOH still maintained its requirement of 2,000 pallet positions. However, the entire area need not be temperature controlled anymore. Since a good portion will be used for syringes, PPE and other paraphernalia, ambient temperature will now suffice. The contract price was reduced from P1 billion to P700 million.

A few new requirements were added to the original tender. The logistics provider must now provide electronic temperature data loggers for each thermal box. It must also provide contingency measures for natural disasters and electric generators in case of power outages, among others.

There are inconsistencies in the new ROQ too. On page 6, the ROQ requires 500 cubic meters of warehouse space capable of -15 to -25 degrees centigrade. But on pages 14 and 30, it requires only 300 cubic meters.

What is disturbing, however, is that there are still material information missing in the new ROQ. The number of vaccines to be handled is still not indicated. Neither are their drop-off points, schedule of delivery and how and when the bidders are to get paid. These details are essential for bidders to formulate an accurate cost quotation.

The DOH is committing the same mistake all over again. Bidders will have no choice but to make assumptions, some of which may result in an inaccurate cost estimate or worse, bids may fail to meet the DOH’s requirements again. This is the height of incompetence on the DOH’s part. We simply cannot afford another bidding failure, especially now that millions of vaccines are en route. It will be a national tragedy if the vaccines arrive and the DOH is caught flat footed, without a cold chain provider.

Before this turns into a national catastrophe, the DOH will do well to issue a memorandum confirming the quantity of vaccines the bidders are to handle, the exact number of drop-off points, particularly, those in the Visayas and Mindanao where air and sea freight are necessary. Only with these inputs can the bidders come up with a sensible cost estimate that meets the DOH’s needs.

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Email: andrew_rs6@yahoo.com. Follow him on Facebook @Andrew J. Masigan

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