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Bidder challenges KRA tender award

By Jackson Okoth | July 18th 2015
By Jackson Okoth | July 18th 2015

The procurement of an Integrated Customs Management System (ICMS) is headed for yet another round of battle, only hours after the Kenya Revenue Authority (KRA) announced it had signed a contract with the firm that had clinched the deal. One of the bidders, Web Fountain sent a statement indicating that the action by KRA to sign the contract was a nullity that would ‘certainly’ be challenged in court.

The firm through their lawyer Gethenji Marete said the contract had been irregularly procured. “We can confirm that we have instructions to appeal the decision of the Public Procurement Administrative Review Board (PPARB) delivered on July 14, 2015 and pursue our client remedies as by law provided,” he said. “KRA’s haste to enter into a contract is bemusing given the very pertinent findings of the PPARB regarding the procurement process including the legality of Trademark East Africa’s (TMEA) engagement.”

PPARB had dismissed Web Fountain’s appeal against KRA and Trade Mark East Africa on technical grounds. This gave KRA and TMEA a go-ahead to sign the deal.

Concerns raised

However, in its ruling, PPARB raised a number of grey areas in the transaction. “Indeed as you may be aware in the course of proceedings before the PPARB, KRA stated that TMEA was not its agent which begs the question of how KRA would turn around and proceed with a contract in the full knowledge of the concerns raised by PPARB.”

Trade Mark East Africa yesterday circulated a statement to newsrooms to the effect that the said contract had already been signed. “TradeMark East Africa today (yesterday) signed a contract worth $8.45 million (Sh866 million) with Bull SAS Ltd for the supply, installation and commissioning of a new integrated Customs Management System at KRA,” read part of the statement.

TMEA Director General David Stanton said: “Together, we want to reduce the costs of doing trade in Kenya and East Africa. This deal heralds an exciting new chapter in regional economic integration.” KRA Commissioner General John Njiraini said; “It is crucial for KRA to upgrade its Customs Management System (CMS) and enhance its ICT infrastructure. In particular, KRA is exploring to overhaul its CMS as a way of seeking a permanent solution to the numerous challenges it currently encounters.”

PPARB had in their ruling declared that TMEA was not the procuring entity and could only participate in the process as an agent. “It is clear from the advertisement and tender document that KRA was the procuring entity and that Trade Mark was merely acting as an agent,” said the board in its findings.

Minutes of the evaluation committee shows that the ICMS tender, floated by KRA, was evaluated by 16 members, 12 of whom were employees of KRA while only three were from Trade Mark and one an employee of audit firm KPMG.

While KRA sought to remove itself from the deal by insisting that it was not the procuring entity, the board found this peculiar.

“The board wishes to observe that a private firm acting independently of a public body cannot purport to carry out a public procurement of a public body and if it does, then such procurement would be a nullity,” read the PPARB ruling.

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