Government's most expensive call: Man loses case on Sh66m tender offered via phone

Man loses Sh66m Beyond Zero tender case awarded on phone. [iStockphoto]

Businessman Paul Otieno must be loathing the day a senior official from the Ministry of Health called him to install medical equipment in seven containers that were part of the Beyond Zero Campaign clinics.

In the end, Otieno’s Sunken International Ltd lost Sh66 million.

Mr Otieno told the court that then Director of Medical Services Nicholas Muraguri called him when he supplied equipment worth Sh17.3 million.

He was optimistic that he would be paid promptly especially because the person he was dealing with was a senior ministry official. He got nothing from the contract. The unpaid amount would rise to Sh66 million plus interest.

Otieno said he supplied equipment to Soweto, Toi, Kianda, Karanja, Gatwekera, Lindi, and Silanga clinics in Kibera, Nairobi.

The Beyond Zero was an initiative that was championed by former First Lady Margaret Kenyatta, governed by the fundamental belief that “No woman should die while giving birth”.

Otieno will now have to live with the loss of millions after High Court judge Chacha Mwita dismissed his bid to recover the money from the Ministry of Health.

The court also ordered him to pay the ministry and the Attorney General the cost of the suit.

Justice Mwita warned traders against trusting the government with contracts that are not within the procurement law.

“Parties must be cautious when tempted to enter into contracts with public entities, and ensure any procurement is in conformity with the law, lest they suffer the consequences of being lured to act outside the law,” he said.

Otieno was no stranger to the ministry. He had won another Beyond Zero Campaign tender.

He told the court that Muraguri requested that he urgently supplies equipment as then President Uhuru Kenyatta was about to launch the project in Kibra.

The mobile phone promise, according to Otieno, was that he could get a local purchase order (LPO) later in the week. This was on June 24, 2014.

Otieno heeded the call and assembled all that was required. And instead of the ministry receiving the equipment, the National Youth Service acknowledged that he had delivered his part of the bargain.

Further, the ministry did not issue the LPOs as promised. He raised invoices worth Sh17.3 million to the then PS but he did not get any response.

Otieno admitted that he had no written contract but maintained that the urgency expressed on the phone had him deliver first and complete the process as he had done earlier.

His employee, Apollo Nyabola, confirmed that all the container clinics were equipped and the list had been supplied by the Ministry of Health.

However, the Health ministry threw Sunken under the bus. It stated that although the firm supplied the equipment, it was not in line with its procurement processes.

According to the ministry, Sunken was paid in full. It asserted that if the ministry required more, then the same would have been advertised, a tender floated and the winning bidder granted the contract.

It admitted that there were seven clinics that were branded Beyond Zero. However, it asserted that they were owned by the county government.