A deficit of masks is clear not only to regular citizens but also to public procuring entities: hospitals, the military, public and local authorities. We have analyzed demand and prices for three-layer medical masks during the past three months on Prozorro.
On April 1, the Government of Ukraine has tightened the measures to fight against COVID-19. Among other things, it is now prohibited to attend public places without a mask or a respirator.
There Are Different Masks
There are several types of masks. A single-use medical mask reduces the spread of infections spread through exhaled droplets. It is usually a three-layer mask with a filter between two external layers of non-woven fabric.
There are also respiratory masks of three types depending on the level of protection: FFP1, FFP2 and FFP3. They are usually used by medical staff or the military working in the epicenter of events.
Mask Prices in Prozorro
The nationwide quarantine and the rapid spread of COVID-19 in Ukraine have led to price gouging and deficit of goods which were not in high demand before, as expected. Prices for medical masks have grown several times. So how many medical masks have been purchased in 2020 via Prozorro and for what prices?
According to our calculations, public procuring entities bought almost 2.5 mln medical masks for the total amount of UAH 25 million between January 1 and March 28, 2020. The biggest number was purchased in March — 1.8 million masks. In February, they bought 547,000 masks, and in January — 108,000.
In the middle of February, procuring entities started buying medical masks more actively. For instance, on February 14, there were 8 tenders announced in Prozorro for purchase of 228,000 units total. Almost 90,000 were purchased through direct agreements, the rest — through open bidding.
The second peak of procurement happened on March 26: over 1.1 million masks. Out of them, 1 million items for UAH 14 million was purchased by Kharkiv Municipal Clinical Hospital No. 13. Medical masks with rubber loops Medicare must be supplied by TOV SOFI-MED by April 30.
In January and February 2020, procuring entities mostly purchased medical masks based on competitive bidding (pre-threshold procurement, open bidding). Most of them were successful and ended in the conclusion of agreements. But as soon as March 2020, 55% of competitive tenders were unsuccessful, meaning not a single participant made a bid. This means that there is a deficit of the product and/or that suppliers have raised their prices. Back at the beginning of March, suppliers refused to sell medical masks for UAH 2-3 per unit, and in the middle of March, even UAH 7-12 per unit was not enough anymore.
In January 2020, suppliers bought medical masks for UAH 0.68-UAH 1.5 on average, in February – for UAH 0.7-UAH3.2. The big jump happened in March 2020. Suppliers have been selling medical masks for UAH 10-25 per item.
For instance, ME ODESFARM supplied 1,000 medical masks for UAH 24.5 per item to the Department of Municipal Property of Odesa City Council. SP Zheleznova O.V. supplied 2,000 masks for UAH 25.5 per item to the Territorial Directorate of the State Judicial Administration of Ukraine in Donetsk Oblast. SP Bastiuchenko O.V. supplied 5,000 masks for UAH 23 per item to the Center for Traffic Organization.
The rapid price growth and the big gap between the average price and the maximum price may attest to price gouging.
Back on March 12, Deputy Minister of Healthcare Viktor Liashko said that the Anti-Monopoly Committee of Ukraine would check prices for personal protective equipment. On March 30, 2020, Kyiv Oblast Territorial Division of the AMCU started a case against manufacturers, suppliers and pharmacy chains of Kyiv and Kyiv oblast due to the significant price growth of masks.
Interestingly, one of the suppliers involved in the case sells masks for the same prices as in January and February 2020 to public procuring entities. TOV Firma Tekhnokompleks supplied 5,000 Slavna masks to Okhmatdyt children’s hospital for UAH 2.99 per unit, 3,600 masks for UAH 3 per unit to the Head Directorate of the National Police of Ukraine in Cherkasy oblast, and 1,500 masks for UAH 2.96 per item to Kyiv Municipal Children’s Infectious Hospital.
Top 5 Suppliers of Masks: Who Are They?
In the period of January to March 2020, we can identify 5 leaders that have supplied the masks for the highest amount and in the highest quantity, accounting for 67% of the total spending and 48% of the total quantity. They are TOV SOFI-MED, TOV TRANSPORT COMPANY AUTOLINE, ME ODESFARM, SP Polozhii Yevhen Oleksandrovych and TOV DIMAKS VBK.
The leader is TOV SOFI-MED, which has sold a million of medical masks for the total amount of UAH 14 million to Kharkiv Municipal Clinical Hospital No. 13, that is, for UAH 14 per item. Under the information provided by the analytical system YouControl, the primary activity of TOV SOFI-MED is wholesale trade in pharmaceutical goods.
Even though the company has existed for just over a year (it was registered on December 22, 2018), it actively participates in public procurement. In the period between February 2019 and March 2020, TOV SOFI-MED participated in 147 tenders, winning 61 tenders for a total amount of UAH 22.6 million. In 90% of the tenders, the supplied goods are medical supplies, equipment and pharmaceutical items.
It should be noted that in December 2019, TOV SOFI-MED sold 2,500 medical masks with rubber loops Medicare to L.T. Mala National Institute of Therapy for UAH 0.45 per item and supplied 15,000 masks Medicare to Balaklia Central Clinical Rayon Hospital for UAH 0.48 per item.
The runner-up, with over UAH 1 million made and 60,000 masks sold, is TOV TRANSPORT COMPANY AUTOLINE.
The main activity of the company is technical maintenance and repair of motor vehicles. Unlike the leader, TOV TRANSPORT COMPANY AUTOLINE was created 8 years ago, but hasn’t been a very active participant of public procurement.
Between January 2018 and March 2020, the company participated in 55 tenders, with only 9 of them competitive and the other 46 awarded through direct negotiations.
The main customer of TOV TRANSPORT COMPANY AUTOLINE is ME Odesmiskelektrotrans (Odesa Municipal Electric Transport). The company entered into 38 agreements with this procuring entity. The total amount of agreements concluded by this company is 49.
Interestingly, before March 20 this year, the company specialized exclusively in car parts and car repair services in public procurement.
On March 20, TOV TRANSPORT COMPANY AUTOLINE started supplying medical items, personal protective equipment, gloves and disinfectants. The company entered into 21 direct agreements for supply of these goods, including 11 with the same ME Odesmiskelektrotrans. The company sold masks for UAH 17 and UAH 18 per item.
The third-ranking company is ME ODESFARM, which sold 53,000 masks for UAH 785,000 to procuring entities. ODESFARM is a municipal enterprise of Odesa City Council, which engages in retail of pharmaceutical goods. It is an active player in public procurement. The enterprise has participated in 442 tenders, with 332 concluded agreements.
Between March 16 and March 27, the company was selling masks for UAH 17 to UAH 24.5 per item, i.e. the municipal enterprise sells masks for higher prices than private companies.
The fourth place on the list of top suppliers of masks belongs to SP Polozhii Yevhen Oleksandrovych, who won one tender in Prozorro and sold 40,000 masks to ME Kharkiv Heating Networks for a total amount of UAH 600,000, that is, for UAH 15 per item.
Note that the primary activity of SP Polozhii is wholesale trading in clothes and footwear, as well as production of leather clothes, work uniforms, etc.
Before February 2017, SP Polozhii had engaged in wholesale trading in meat and meat products but had not participated in public procurement.
The last place in the top five belongs to TOV DIMAKS VBK. The company sold 21,500 masks to public procuring entities for a total amount of UAH 366,000.
The company is quite young and has existed for only 1.5 years. It specializes in construction of housing and non-residential buildings, electrical and other construction works.
During its existence, TOV DIMAKS VBK has participated in just four public tenders. In the first two, it supplied channels and pipes, in two others – medical masks for UAH 17 per item.
In conclusion, doing business today means that you have to respond to current challenges. Don’t give up, since you can always end up doing medical trading, even if your whole life you only sold footwear, clothes or car parts.
Source: www.epravda.com.ua
