Hitches dog mega State procurements

High Court Judges Francis Gikonyo (left) and George Odunga during the judgement of the Laptop tender project. The court has nullified the process and ordered that it starts afresh. [Photo: Fidelis Kabunyi/Standard]

Procurement hitches arising from legal and procedural issues have plagued most of the key Jubilee Government projects. These arise from failure by some of the procuring entities to stick to the rules, failure to do due diligence and the influence by power brokers, resulting in some projects taking longer to start.

The laptop tender was first cancelled by the Education ministry in October 2013, contending that all the participating companies had overpriced their costs. In the second instance, the exercise was cancelled by the Public Procurement Board on appeal in March 2014 from HPU of the Netherlands and Haier of China.

The two firms complained that Olive Telecommunications of India which had been awarded the tender was not an original equipment manufacturer in line with the tender requirements. Six months down the line, the High Court sitting in Nairobi, on Wednesday cancelled the Sh24 billion tender awarded to Olive Communications and called for fresh tendering - an exercise to take at least six months.

“The whole process should be done afresh to ensure fairness and equality to all parties interested in bidding for the tender,” said Justices George Odunga, Francis Gikonyo and Weldon Korir in their ruling. The court ruled that the exercise was flawed. This will be the third time the exercise will be undertaken, begging the question as to when the Standard One pupils will get to see the gadgets.

Going by past procurement procedures in the country, the earliest the laptops can be delivered is June 2015. The Jubilee government had hyped itself as a digital government and to accentuate this, President Uhuru Kenyatta and his Deputy William Ruto pledged to provide all Standard One pupils with free laptops within one year after assuming office.

“We regret the delays because we hoped to have delivered on the promise as a government by now but then we have no option but to obey the courts, “ said Education Cabinet Secretary Prof Jacob Kaimenyi.

Although groundbreaking for the construction of the Sh1.2 trillion standard gauge railway (SGR) was completed in November last year, the project is still riddled in controversy. As at last week, the Kenya Railways Corporation was being investigated by the Parliamentary Investments Committee over award of supervisory services for the contract.

According to the PIC, the firm that won the tender to oversee the construction of the Sh327 billion standard gauge railway, did not bid or participate in the tendering process. The contract for the supervision of the construction and procurement of facilities was awarded to another Chinese State corporation, Third Railway Survey and Design Institute Group, to supervise the main SGR work being undertaken by the China Roads and Bridges Corporation.

Appearing before the PIC, Team Engineering Managing Director Dr Ing Luigi Marenzi submitted that his firm was unfairly locked out of the tender. “The tender was awarded in total disregard of the constitution, the Public Procurement and Disposal Act and the recommendations by the Parliamentary committee that recommended that the design review and supervision of the SGR be undertaken by an independent firm,” Marenzi said.

Kenya Railways Managing Director Atanus Maina however said that Third Railway Survey and Design Institute Group won the tender competitively and “there was nothing in the tender documents excluding a Chinese firm.”

It’s being touted that Chinese vendors eying multi-billion tenders being rolled out by the Jubilee government have recruited powerful business figures in the country to act for them, causing tension in government.

PIC Chairman Maina Kamanda said power brokers have been gallivanting from office to office allegedly taking bribes from potential contractors in order to cut deals on their behalf. “We are aware of all these people but we have our ears on the ground because these are the root cause of all the problems plaguing the tenders run by Government,” said Mr Kamanda recently.

He further noted that in fact a law would be put in place to strike out companies winning tenders using underhand methods. “This undercutting must be put to stop,” said Mr Kamanda. President Kenyatta has even rebuked some businessmen, whom he accused of funding MPs to support their tender interests.

“We know their tricks. They want to corruptly get contracts and when they lose, they buy MPs to make noise. I want to ask these MPs to earn their living in the right away,” said the President recently in Nairobi. Controversy on the SGR tender also broke out last year when the Office of the Deputy President wrote to the Attorney General, asking him to give an opinion on whether the plans to grant the project to a Chinese firm met the requirements of international competitive bidding. But the Ministry of Transport had defended the procurement, citing Section 6(1) of the Public Procurement Act which allows procuring entities to circumvent competitive tendering where projects involve negotiated grants or loans.

Coal mining project

The High Court recently stopped the Sh174 billion Lamu coal mining project temporarily, subsequently stopping the Government from entering any binding agreement with the Centum-Gulf Energy consortium. Lady Justice Mumbi Ngugi put the tender on hold pending the determination of a suit before her filed by a rival group.

Centum and Gulf Energy Tuesday asked the High Court to throw out a petition filed against it, arguing that it was filed in the wrong court. The tender award was challenged by Hebei Construction Company Group and Liketh Investment Group consortium who accused the Government of foul play, bias and irregularities in the tendering process.

The two companies hold that Centum was not among the 26 companies that had initially placed their bids to be awarded the contract. “It only emerged after the bidders were cut down to five,” argued Hebei Construction in their suit papers.

However, The Centum-Gulf Energy consortium raised preliminary objections to the suit, contending that Hebei Construction Company and Liketh Investment Group filed the case in the commercial division rather than the constitutional court where it was heard. The Centum-Gulf consortium raised preliminary objections to the suit on grounds that it was filed in the wrong division of the High Court.

Safaricom security tender

It was first cleared by the Procurement Public Procurement Authority, then suspended by Parliament before the same House cleared it again. Parliament in June suspended and froze the Sh12.3 billion security contract awarded to Safaricom for supply of a national surveillance system after expressing misgivings on its legality.

At first, the Parliamentary Committee on Administration and National Security questioned the manner in which the tender was awarded, saying that it was single-sourced, which is inconsistent with procurement laws. It also raised concerns over Safaricom’s technical capacity to roll out the highly sophisticated security contract which involves deploying a countrywide 4G network and supply of walkie-talkies to the police service.

However, the same House team cleared the contract in July, noting that the procurement process was above board and all necessary stakeholders were consulted. “The insecurity problems in this country are such that the other methods of procurement save for direct procurement would have been impractical... the circumstances therefore justify direct procurement in this tender,” said the Kamama-led team.