Auditor queries Sh767m city contract

A report from the Auditor General Edward Ouko has indicted Nairobi County for entering into a skewed contract for electronic payments for services that could see the government lose over Sh767 million in five years.

According to the report, the county government is in danger of losing the money after it entered into the contract worth Sh23.2 million, with WebTribe Ltd without taking into account the long-term cost of the contract.

Dr Ouko said it was not clear how the cost of the contract was arrived at and why the county government did not engage the services of cheaper entities such as the Kenya Revenue Authority.

The 18-page contract was signed by Governor Evans Kidero and former County Secretary Lilian Ndegwa.

BIDDER INDICTED

The auditor revealed that under the agreement, the company was to deduct four per cent of the total collected revenue as operational costs, which was above what other bidders were offering.

“The rates provided by Webtribe are relatively higher compared to two other bidders who passed the financial evaluation,” the report said.

Ouko also indicted the winning bidder for misleading the tender committee that it had teamed up with Kenya Commercial Bank (KCB) to bid for the tender, only for the bank to write a letter which stated that it only had an agreement with a different bidder, River Bank Solutions.

“This raises doubt on whether Webtribe genuinely complied with the mandatory requirement of a teaming agreement,” Ouko said in his report.

The county government failed to produce the procurement documents for evaluation, he said.

“There is no value addition in using the JamboPay system. The county entered into a contract with the service provider despite the fact that KCB had raised concern that they were not teaming with them. This could imply fraud on the part of the service provider and favoritism on the part of the county,” the report partly read.

contract termination

It subsequently recommended the termination of the contract and the establishment of adequate controls to monitor the revenue collected and deposited.

Other companies that had bid for the contract were Virtual Mobile and Craft Silicon. The report noted that the operational costs cited by the company were higher compared to similar charges levied by similar entities, and expressed concern that the manner in which the contract was entered into may have violated the requirements of the Public Procurement and Disposal Act.