Beginning in 2012, the former Ministry of Health and the All-China Women's Federation worked together to implement the "Nutritional Improvement Program for Children in Poverty Areas" using special subsidies from the central government to distribute free nutritional packages to families with infants and young children.
The project's recent bidding in Hunan Province, but the winning company's offer is lower than the theoretical cost of the situation, after accounting for the actual price of the nutrition package is only 0.07 yuan / packet, lower than the minimum cost of other companies and project team experts to calculate the minimum cost, but also much lower than the national budget of 1 yuan per packet standard. In addition, the bidding of nutrition packages in Hunan Province has also been delayed, and one of the direct impacts caused by the low-priced winning bids and project delays is a large surplus of funds.
Deducting the cost of the winning bid price of only 0.07 yuan
According to the reporter's understanding, the core of the "Nutrition Improvement Program for Children in Poverty Areas" is the nutrition package. Project nutrition package 12 grams per packet, 30 packets of a box, nutrition package is used as a supplemental nutritional supplements, free of charge to infants and young children 6-24 months of age, a packet per day.
The procurement process is: the national financial funds issued to the provinces, the provincial health commission as the purchaser, commissioned by the bidding company or government procurement center for the nutrition package bidding, the winning company to provide products and is responsible for the distribution, personnel training, project publicity and other ancillary services work. The procurement process is organized and supervised by the provincial finance department.
In December 2016, Hunan Province, nutrition package tender results announced, according to the "Competitive Negotiation Transaction Announcement" (hereinafter referred to as the "Announcement"), the bidding for three segments of the nutrition package, *** 6 companies to participate in the bidding, the winning manufacturers were Wuhan Huakangchen Biotechnology Co. (hereinafter referred to as "Huakangchen"), Ferguson (Wuhan) Bio-technology Company Limited and Ganzhou Quanbiao Bio-technology Company Limited. Among them, Huakangchen won the bidding of 1,421,600 boxes, or 42,648,000 packages.
Our reporter calculated that the winning bidding prices of the three companies were RMB 0.35/package, RMB 0.49/package and RMB 0.529/package, respectively, according to the Announcement, of which the winning bidding price of Huakangchen was significantly lower than that of the other two.
The invitation notice for competitive negotiation for the procurement of nutritional packages in Hunan Province stipulates that the winning manufacturer is responsible for providing a specified number of nutritional packages in addition to nine supporting services such as supporting publicity materials, personnel training, project publicity and distribution of nutritional packages. The above notice of invitation for negotiation specifies the standard of each cost, according to this calculation, Huakangchen need to bear the cost of 8566300 yuan, apportioned to the cost of each packet of nutrition packet is 0.2 yuan.
The staff of the nutrition package manufacturers who participated in the bidding of this period estimated to the reporter of "China Times (public number: chinatimes)" that, in addition to the above costs, Huakangchen also needs to bear the winning service fee of 441,406.8 yuan, which is apportioned to each package of 0.01 yuan; the cost of the supporting materials, distribution costs (factories to the townships), and the value-added tax (VAT) apportioned to each package of at least 0.07 yuan.
So, after winning the bid at 0.35 yuan per package, Huakangchen has to bear the cost of 0.28 yuan per package, leaving only 0.07 yuan per package for the production of nutritional packages.
The above manufacturer staff told the "China Times (public number: chinatimes)" reporter, the project requires nutrition packets of soy protein to be derived from all class I instant soybean meal, to all use class I instant soybean meal calculation, the production of 12g / packet of nutritious packets need to use no less than 11.4 g. Currently, its market price of 15,400 yuan / ton, the cost of 12g nutritious packets of instant soybean meal required to be used. Currently, its market price is around RMB 15,400/ton, and the cost of instant soybean flour for 12g nutritional packets should be no less than RMB 0.17/packet. If the project contract is executed as stipulated, Huakangchen will lose at least 10 million yuan.
Huo Junsheng, a researcher at the Institute of Nutrition and Health of the Chinese Center for Disease Control and Prevention, told the China Times (public number: chinatimes) that, according to their rough estimates, the direct cost of producing a nutrition packet product that meets the standard, that is, the cost of raw and auxiliary materials, packaging materials and inspection, is about RMB 0.4/packet, without taking into account the operating costs of the enterprise, etc., and that the cost of nutrition packet products should not be less than RMB 0.17/packet, if added to the costs of personnel, transportation, ancillary services and business operations and other costs, the actual costs incurred will be much higher than the direct costs. But he also emphasized that he did not rule out the possibility that some companies could achieve even lower costs.
The winning company said it "lost money for charity"
So how does Huachen make a profit?
A bidding staff member of the Hunan Provincial Health Planning Commission recalled to a reporter from the Huaxia Times (public number: chinatimes) that, in response to Huakangchen's low offer, the bidding had been questioned by a bid evaluation expert. The reply given by Huakangchen was that they were willing to do the nutrition package project as a charity project, and because they were not trying to make a profit, they gave a much lower offer than other manufacturers.
A reporter from the China Times (public number: chinatimes) tried to contact Liu Zhiwei, chairman and general manager of Huakangchen, but as of press time, the phone always refused to pick up and did not reply to the reporter's text message.
The director judge responsible for evaluating bids in this tender is Du Qiyun, a chief physician at the Hunan Provincial Maternal and Child Health Hospital, who also declined to respond to possible problems with the bid evaluation.
According to the national enterprise credit information publicity system, Huakangchen*** has two natural person shareholders, Liu Zhiwei and Gao Yanhui, of which Liu Zhiwei contributed 7.674 million yuan, Gao Yanhui contributed 2.558 million yuan; there is also an enterprise legal person Qing Dingmu (Wuhan) Biotechnology Co. (hereinafter referred to as "Qingdimu"), among its three natural person shareholders, there are also Liu Zhiwei and Gao Yanhui. In addition, Liu Zhiwei is also the chief scientist of Qing Dingmu, director of the Institute.
An investigation by a reporter from the China Times (public number: chinatimes) found that Liu Zhiwei was a postdoctoral student at the CDC's Institute of Nutrition from 2003 to 2008, which was confirmed by a staff member of the CDC. The official website of Qingdingmu describes him as "working with a group of experts from the Chinese Center for Disease Control and Prevention (CDC) from 2005 to 2010 on the research and demonstration of nutritional improvement programs for infants and children".
Industry insiders told the Huaxia Times (public number: chinatimes) reporter that Huakangchen was the first bidding in Hunan Province in December last year, and the low price of 0.35 yuan / packet of attention in one fell swoop. At the same time, with other nutrition pack manufacturers actively involved in various batches of nutrition packs around the bidding is different, Huakangchen only participated in the bidding in Hunan Province in December last year, and had no experience of winning the bidding in other regions before that.
Bidding delayed for nearly two years, the funds remaining serious
In addition to the low price of winning the bid, Hunan Province, nutrition packages bidding also appeared to delay the problem.
According to the information found on the Hunan Provincial Government Procurement Network, the Hunan Provincial Health Planning Commission issued an invitation notice for competitive negotiation for the 2014 nutrition package procurement project on December 10, 2015, and then issued an invitation notice for competitive negotiation for the 2015 nutrition package procurement project on November 30, 2016, according to the information found on the Hunan Provincial Government Procurement Network. And according to the project program jointly issued by the National Health Planning Commission and the All-China Women's Federation, the bidding and procurement should be completed within 2-3 months after the funding is issued.
According to a number of people familiar with the matter who told a reporter from the China Times (public number: chinatimes), the bidding for the annual project around the world is usually completed in the first half of the year, and soon after its completion the manufacturers should start shipping the products to meet the needs of infants and young children within the project program of the year.
The bidding for the 2014 and 2015 annual projects should have been completed in the first half of the year, but Hunan Province has been delayed for nearly 2 years, and the two bids carried out in Hunan Province in 2014 and 2015, the time interval of up to 20 months, the longest in the various project provinces.
Since the maximum time for infants and young children in the program to receive nutrition packages is one and a half years between the ages of 6 months and 24 months, the delayed bidding may have resulted in the fact that infants and young children of the right age who should have been in the program were over the stipulated age of the month by the time the nutrition packages began to be distributed. According to the regulations, the nutrition packages are no longer distributed beyond the age of months.
Some people familiar with the matter told a reporter from the China Times (public number: chinatimes) that there exists a method of operation after winning a bid at a low price, in which the winning enterprise signs a contract with the purchaser but does not deliver the goods, dragging it out to the start of a new project the following year. In this way the enterprise did not execute the contract, will not produce actual losses because of the low-bid winning; also will not be confiscated security deposit, to avoid losses.
And one of the direct impacts caused by the low bid and project delay is the problem of remaining funds. A domestic professional organization had previously conducted research on the project, according to the third-party assessment report of the project formed after its research, 10 of the 21 project provinces in the 2015 fiscal year have a surplus of funds, of which Hunan has the most surplus funds, amounting to 25.41 million yuan. In that year, the central government allocated 56.94 million yuan of project funds*** to Hunan Province, and the proportion of remaining funds reached 44.6%.
In contrast to the remaining funds, 19 of the 21 provinces had a project coverage rate (the ratio of the number of project counties to the number of poor counties) of less than two-thirds, with Hunan province having a project coverage rate of 63 percent.
Yuanling County, Huaihua City, Hunan Province, is one of the project counties, and the village doctor at the health office of the Huang Yangping neighborhood committee in the local town of Mingxikou told the China Times (public number: chinatimes) reporter that the nutritional packages currently being distributed to the village were received from May last year and were produced by Ganzhou Quanbiao Bio-technology Co. The enterprise was the winning bidder of the 2014 project, and its contract fulfillment date was March 2016.
For the project's delay, the aforementioned bidding staff gave two reasons. One is that the central financial funds issued late, the current year's project funds often to September, October or even the end of the year, the funds can not bidding; the other point is that the nutrition package project to cover the population statistics, reporting and bidding process is longer, it will take a period of time. Another point is that the process of counting, declaring and bidding for the people covered by the nutrition packages takes a long time, he noted, adding that new tenders often do not start until the last cycle of nutrition package distribution is basically completed.
The statement was confirmed by several village doctors. Many local parents take their children out to work, and many of them are no longer in the village; in addition, most of the village children don't like to eat the nutrition packs, so there is a backlog of nutrition packs in the area and they can't be distributed, the said village doctor said.
Yuangling Town, Lao Crow Creek neighborhood committee health office of the village doctor is only in January this year began to receive this batch of nutritional packages, before has been issued in the last batch of successful manufacturers of products. The nutrition packs produced by Huakangchen, which won the bid at the end of last year, have not been distributed in the villages.
For the large amount of project funds remaining, the aforementioned bidding staff believe that this is not a problem, but the results of the work of the Hunan Health Planning Commission. Through a series of tenders, nutritional packages in Hunan province can basically be guaranteed (supplied) until the end of 2018. On this basis there is a balance of funds, you can continue to make purchases to ensure (supply) until 2019.
An industry expert, on the other hand, told the China Times (public number: chinatimes) reporter that according to the regulations, project funds must be earmarked for specific purposes, and even the expansion of bidding and purchasing needs to be reported and passed by the approval before it can be done.
For the remaining funds why not used to expand the project to cover the county, the bidding staff explained that the Hunan Provincial Health Planning Commission had reflected to the competent authorities, but did not get a reply.
Low bidding is difficult to ensure the quality of nutritional packages, some manufacturers detected genetically modified soybean flour
Wuhan Huakangchen Biotechnology Co. A nutrition package manufacturer staff recalled to reporters, the project in 2012 at the beginning of the offer of various manufacturers, although there are differences but still within a reasonable range; with the project, especially since 2016, individual manufacturers in order to win the bid, the offer is far below the cost price.
According to the manufacturer's statistics, in the project bidding in 2016, the winning manufacturers in a number of provinces and regions, such as Sichuan, Ningxia, Gansu, Tibet and Hunan, were the lowest bidder. The low-priced competition has led to concerns among industry experts about the quality of the nutritional packages.
Some manufacturers use genetically modified soybean flour in violation of the law
A reporter's investigation found that the nutritional packages issued in some areas were even suspected of using genetically modified soybean flour in violation of the law. Project management unit in January this year, commissioned by a Beijing analytical testing center on the nutrition packet sampling test, which Liaoning Meitianjia Biotechnology Company Limited (hereinafter referred to as "Meitianjia") nutrition packet samples test results show that the LECTIN gene, the NOS gene and the EPSPS gene positive, which indicates that it contains genetically modified ingredients.
A staff member of a soybean flour supply factory told the China Times (public number: chinatimes) reporter that the price of genetically modified soybeans is cheaper than non-genetically modified soybeans by about 2,000 yuan per ton, and the cost of genetically modified soybean flour is 3,000 yuan lower than that of 1.5 tons of soybeans to produce 1 ton of soybean flour.
The procurement requirements issued by the National Health Planning Commission in previous years have clearly required that the food matrix used in nutritional packages (including Class I instant soybean flour) must be non-GMO. The above soybean flour factory staff said, the use of genetically modified soybean production of food, in the food safety law belongs to the "non-food raw materials processing food", is a serious violation of the law.
And the reporter in Ningxia and other places on the nutrition packet and related materials to see, Meitianjia in 2016 on the five batches of nutrition packet on the existence of skillful processing, such as in the package labeled "non-GM instant soybean flour" or "non-GM class I instant soybean flour "This practice obviously does not meet the requirements of the General Principles for the Labeling of Prepackaged Foods of the National Standard for Food Safety. In addition, the labeling of "vitamins" on the package also exceeds the standards given by the National Program Office.
It is understood that Meitianjia's coverage area includes Ningxia, Inner Mongolia, Qinghai, Guizhou, Gansu and Yunnan.
A manager surnamed Zhao of Meitianjia responded to a reporter from the Huaxia Times (public number: chinatimes) on the 24th, saying that it is impossible for Meitianjia to use genetically modified soybean flour in its nutritional packages, and that Meitianjia's soybean flour and nutritional packages have been tested by authoritative departments. As of press time, the reporter was unable to reach the Maternal and Child Health Service Department of the Ningxia Health Planning Commission.
Huo Junsheng, a researcher at the Nutrition and Health Institute of the Chinese Center for Disease Control and Prevention (CDC), told the China Times (public number: chinatimes) that the National Health and Planning Commission (NHPC) and the All-China Women's Federation (ACWF) have issued project bidding and purchasing requirements for each province, which stipulate that bidding in each province should fully reflect the importance of product technology and services, and suggest that the quotation scoring in the finalization of the bidding accounted for no more than 35% of the total scoring ratio.
But according to the research of a professional organization in China, in the actual bidding process, the price score generally accounted for a large proportion of between 30% -35%, individual provinces even reached 50%. A source said that although the National Health Planning Commission and the All-China Women's Federation triggered the project bidding procurement requirements will be product quality as the first assessment criteria, while emphasizing the importance of nutrition packages supporting services, but the requirements are not mandatory.
The consequence is that as long as the price is low, you can win the bid at the local level, but there may be some batches of products as good, less shipments or shrinkage of supporting services, and there is even the possibility of squeezing out competitors through short-term low prices and mastering the right to speak in the market.
The above sources also said they had repeatedly suggested modifying the project-related system, but relied on the coordination of various departments.
Products are difficult to take into account the taste
Yu Xiaoqian, vice president of the China Association of Maternal and Child Health Care, told the China Times (public number: chinatimes) reporter that due to lax supervision in the operation of the project, there may also be a low-priced bidding companies actually issued nutrition packages, and the delivery of qualified products inconsistent with the situation. And nutrition package as infant food, promotion effect and taste and other intrinsic quality is closely related to the low bidding out of the product is difficult to take into account the taste and other intrinsic quality. At the same time, the nutrition package supporting publicity, training work is difficult to ensure.
The village doctor at the Yufangping Village Health Office in Guanzhuang Town, Huaihua City, Hunan Province, told a reporter from the China Times (public number: chinatimes) that the promotion of nutritional packages in the local area is not good, especially last year, when many parents reflected that their children did not like the taste of nutritional packages.
The village doctor also said that many parents do not understand the nutrition package and have a resistance mentality. Some parents even think that expensive things are good, and there is nothing good in the free distribution. He believes that what is most lacking in the implementation of the program is the dissemination of knowledge to parents.
According to an interview with a reporter from the China Times (public number: chinatimes), a number of project counties in Huaihua City, Hunan province, are currently assigning the task of popularizing and educating parents about the project to village doctors, who are subject to a performance appraisal, but many villages are facing a serious shortage of village doctors. Among them, there is only one village doctor in the health office of the Lao Caixi neighborhood committee in Yuanling Town, who shoulders the healthcare tasks of more than 2,000 people in the village, and is also responsible for the promotion of several national-level health programs.