Red flag raised over taxman’s tender award

A whistle blower, Owen Nganga, wants the Public Procurement Oversight Authority (PPOA) to disqualify two firms pre-qualified in a tender to install an integrated customs management system at the Kenya Revenue Authority (KRA).

Bull and Webb Fontaine were the finalists when the financial bids for the KRA tender were opened on January 27, this year. “Our client is of the considered opinion that there is a glaring oversight on the part of Trade Mark East Africa, Kenya Revenue Authority and KPMG in the integrated Customs Management System (ICMS) tender,” said Paul Nyaga, a lawyer representing Nganga in a letter to the Public Procurement Oversight Authority.

The letter dated February 2, 2015, says the two firms selected have questionable backgrounds, with Nganga raising doubts about integrity of the selection process. KRA is planning to replace its existing Simba Customs system with a ICMS to enhance automation of customs and revenue collection procedures whilst facilitating international trade across Kenyan borders.

Ethics and Anti-corruption Commission have already opened investigations into the matter according to reports carried by sections of the media. Documents in our possession indicate one of the companies provided false information and were not lead bidders in sites they claimed to have been.

Similarly, they did not attach direct reference letters as required. The contract document required bidders to show evidence of sites they had installed similar systems where they were lead bidders. “Some of the sites provided by one of the bidders were not even visited, raising suspicion about existence of such systems in the said sites,” said Nyaga.

The project is funded jointly by the Government and TradeMark East Africa. This expression of interest, that has now evaluated and qualified Bull and Webb Fontaine, covers the provision of a component based IT solution and related modernisation services for the implementation of a new Customs Management System.

Cargo tracking

The implementation must include integration with (the Kenya National Electronic Single Window System and the Integrated Tax Management System (iTax). It will also interface with KRA’s Payment Gateway System, the Electronic Cargo Tracking System and the National Public Key Infrastructure  platform,Regional Customs Systems and the Road Transport System among other platforms. While Bull maintains it developed a similar customs system in Morocco, Nganga disputes this, stating the system was developed by the Moroccan Administration of Customs and Indirect Taxes.

“This is information that is not only in the public domain but information which the TMEA/KRA evaluation team which visited Morocco should be able to attest to,” said Nganga in the letter to PPOA.

Nganga says Bull was a sub-contractor in Ireland and not the lead bidder. He also questions selection of Webb Fontaine which he says has allegedly been mentioned in Nigeria for tax fraud. “The issues concerning these two firms call into question the integrity of this process and puts at risk Kenya tax payers’ money running into millions of dollars with a potential to put the entire process into disrepute if not corrected,” said Nyanga.

When contacted, KRA Deputy Commissioner in the Legal Affairs Department Beatrice Odundo said, “I do not want to comment any further on this issue.” Efforts to obtain a comment from PPOA were unsuccessful with officials at the Director General’s office declining to comment, even after promising to do so.