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Firm faulted for 'tricking' State to buy medical kit

By Rawlings Otieno | March 4th 2020

SPA CEO Joseph Ogachi when he appeared before the Senate committee probing lease of multi-billion medical equipment. [Boniface Okendo, Standard]

A consulting firm that advised the Ministry of Health to lease multi-billion medical equipment has been put on spot for misleading the Government.

Strategic Partnership Associates (SPA) Infosuv East Africa Limited that was picked through a restricted tender in a consortium with audit firm PKF carried out a value-for-money assessment that informed the ministry’s choice for the Managed Equipment Service (MES) programme.

Yesterday, the firm was hard-pressed to explain how it submitted value-for-money assessment report without doing physical verification of health facilities in counties.

The firm was also unable to explain how it was able to complete an assessment and submit the same only three days after signing the contract.

According to the terms of reference, Infosuv was to take at least 42 days of the assessment before submitting a final report to the ministry.

SPA Infosuv Chief Executive Officer Joseph Ogachi defended himself before the Senate ad hoc committee chaired by Isiolo Senator Fatuma Dulo.

“We had a team of experts who managed to complete the work within three days. At the time, a new government had just come in which was giving us pressure to expedite the work,” said Mr Ogachi.

However, senators Dulo, Moses Wetang'ula (Bungoma), Enock Wambua (Kitui) and Millicent Omanga (nominated) said it was not possible to complete such a huge task in three days and accused the firm of being part of the scheme to fleece Kenyans billions of shillings.

The Auditor General, in his report, had flagged the SPA Infosuv and PKF deal through a restricted tender to provide advisory services on procurement of the firms and on financial ramifications of MES.

PKF provided financial analysis experts while SPA had procurement experts.

In its value-for-money assessment report, the consortium says it was to capture all costs related to the project although there was likely to be additional costs to be incurred due to certain events of risks that would transpire over the life of MES.

On maintenance assumption, SPA Infosuv and PKF stated in its report that: “It is assumed that with the outright purchase, the Government will spend on approximately 10 per cent of the base cost of the equipment on maintenance.”

However, Ogachi said the role of SPA in the consortium was to design project risk assessment tool, value-for-money assessment and financial assessment model.

The Dulo-led committee which was due to report to the House after two successful extension periods is now seeking another extension to enable it complete its work.

During the probe, the senators have been told that some of the leased medical equipment supplied to 30 health facilities are either dysfunctional or unused and that the Ministry of Health did not carry out any needs assessment on personnel to be deployed to operate the equipment supplied to the health facilities in the counties.

Cost adjustment

The contract, which was originally Sh38 billion was, however, varied along the way and the figure increased to Sh63 billion in 2017 with each of the 47 counties contributing to the programme about Sh200 million per year up from initial Sh95 million annually.

Already, the National Treasury has proposed an allocation of Sh6.2 billion towards the programme in the 2020/2021 financial year despite the ongoing probe.

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