State pulls plug on 170 deals as losing contractors fight back

The government terminated 170 contracts in the second quarter of this year in what could expose taxpayers to loss of billions of shillings in arising lawsuits.

The Public Procurement Regulatory Authority (PPRA) noted that 19 county governments and five county assemblies had in the quarter to June also terminated contracts with different contractors.

During the quarter, only 132 State corporations submitted documents of their procurement processes to the watchdog. This means that most of the ministries, State-run agencies and counties are running afoul of the law, with the Public Procurement And Disposal Act requiring them to submit reports quarterly.

A breakdown by PPRA shows that out of the 22 ministries, only four submitted reports about the procurement deals they undertook during the quarter.  The authority investigated nine tender cases, most of which were awarded fraudulently.

Key cases included tenders awarded by Kenya Power (labour and transport contractors), Nairobi County (construction of four stadia including Dandora), National Oil Corporation (provision of medical insurance cover), National Hospital Insurance Fund (purchase of revenue management system) and the Ministry of Transport (construction of roads in Naivasha).

The authority is mandated to investigate procuring entities and contractors to determine whether there has been a breach of the law.

“These investigations arise form allegations of misconduct in a procurement and disposal operation,” said Chairman Public Procurement Regulatory Board Andrew Musangi.

In its report, PPRA said it had received 488 complaints during the quarter under review, 355 of which had been resolved.

“From the analysis of the nature of the complaints, 40 per cent were on flaws in tender evaluation and development of specifications, 21 per cent of complaints were on delayed payments, 15 per cent on alleged corrupt practices during procurement proceedings and nine per cent on alleged irregularities during the procurement process,” said Mr Musangi.

“Some of the complaints were investigated and findings shared with the parties and the law enforcement agencies for further action.”

The authority also undertook procurement audits on three State corporations, all of which scored dismally.

The impromptu audits were on the Agricultural Development Corporation, Agricultural Finance Corporation and the Attorney General’s office, whose scores were way below average, meaning that taxpayers’ funds were at risk.

“All three procuring entities that were audited had an average score of 42.1 per cent, which is considered non-compliant and a high-risk level of 57.9 per cent with the office of the Attorney General and Department of Justice scoring the lowest compliance score of 35.75 per cent,” said PPRA.