Acting CEO shocks House team with details of the pedestrian manner in which firms were given tenders without bidding or pre-qualification.
A parliamentary watchdog committee was on Wednesday at a loss at the bizarre manner in which a State agency procured Covid-19 supplies worth billions of shillings.
In what may pass as the most strange procurement process at a public entity, a senior Kenya Medical Supplies Agency (Kemsa) official admitted to the National Assembly’s Public Investment Committee (PIC) that representatives of companies would walk in and ask to supply Personal Protective Equipment (PPEs).
And without any technical or financial assessment of the said firms to ascertain their capability to deliver, they would be given offer letters, stating what to supply.
The tenders totalling over Sh9 billion were also awarded without the approval of the board of directors or the Ministry of Health, the committee heard.
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The shady deals only came to light when it emerged that senior Kemsa officials, who have since been interdicted, had approached the National Treasury for funds.
Admittedly, the medical supplies agency did not even know the number of PPEs they required as they had not done a needs assessment to give them projections on the demand.
They had also not engaged their would-be customers such as county governments and level-six referral hospitals to establish a market.
The revelations made by the acting Kemsa Chief Executive Edward Njoroge, explain how the parastatal ended up stuck with equipment worth Sh6.3 billion, which it now says can only be disposed of at the current market price, resulting in huge losses for taxpayers.
Njoroge said the agency does not have money to pay suppliers. The Ethics and Anti-Corruption Commission (EACC) has also stopped any payments as investigations continue.
He told the committee chaired by Mvita MP Abdullswamad Nassir they have resigned themselves to the fact that they will now have to sell the PPEs at a loss.
They expect to make losses in excess of Sh2 billion if they sell the equipment at the current market price.
“This is not making sense. How did these companies know that you actually needed the PPEs?” posed Ruaraka MP T J Kajwang.
“You did not place any advertisement calling for tenders; how did you reach out to companies, especially those not pre-qualified with you?”
The committee was at first treated to inconsistencies in responses on whether Kemsa had spent the allocations meant for the Universal Health Care to procure the PPEs.
Under oath, Njoroge’s team, which also included acting Director of Procurement Edward Buluma and acting Commercial Director George Walukana, admitted the multi-million shilling procurement deals were done without the approval of the board.
“The only approval we had was in relation to the expenditure of Sh758 million, which was a funding from the World Bank. The expenditure was approved by the Ministry of Health Principal Secretary (Susan Mochache),” said Njoroge.
The officials, who said they were not in office when the procurement was done and only came into office after the suspension of former CEO Jonah Manjari, said they could not ascertain the criteria used to issue the tenders.
Companies that had not been pre-qualified had been given offers for as much as Sh871 million.
Curiously, the committee heard, the corporation continued giving companies offer letters for more supplies even after they started receiving donations. The committee is next week expected to meet with Health Cabinet Secretary Mutahi Kagwe and PS Mochache.