Nairobi News

Former Kenyatta International Convention Centre (KICC) chief executive Fred Simiyu is on the spot for singly handing out tenders worth Sh1.4 billion during the World Trade Organisation ministerial conference held in Nairobi in 2015.

Auditor-General Edward Ouko says the government may have lost at least Sh1.4 billion in flawed orders for goods, works and services during the event.

Mr Ouko says Mr Simiyu handed out the 15 tenders through single sourcing while passing them as competitive through references to fictitious bids by ghost companies.

“The corporation may not have received value for money from the WTO projects through the flawed procurement process,” Mr Ouko says in his July 11 report.

NO PAPER TRAIL

It shows that tenders were executed in complete disregard to the Public Procurement and Disposal Act of 2005 and its regulations.

The Auditor-General says he could not get minutes of tender committee meetings, contract documents and local purchase orders for verification – making him believe the transactions were done outside the law.

In one case, the auditor says, the corporation made several procurements for goods and services worth Sh70.8 million without going through competitive bidding.

“There was no evidence of any report submitted to the Public Procurement Oversight Authority for direct procurements contrary to the law,” Mr Ouko said.

TENDERS

The report was tabled in the National Assembly by Majority Leader Aden Duale on Wednesday and will be considered by the Public Accounts Committee.

The flaws have since seen KICC slapped with claims of up to Sh701.03 million by vendors who have not been paid on account of poor documentation.

The law stipulates that any direct procurement of value exceeding Sh500,000 has to be reported to the authority within 14 days after the notification of the award.

The report also says the tender committee was not properly constituted or involved in the hiring suppliers for projects that were directly procured.

The audit found that bids were invited for only five of the 17 projects related to the WTO 10th ministerial event but through the restricted tendering method.

Of the five, according to the report, only two were considered by the tender committee.

AWARD LETTER

The awards to the 15 companies were done on diverse dates between July 13 to September 30, 2015.

“In some instances, award letters were terminated but the signed contracts were not terminated hence exposing the corporation to litigations and resultant costs.”

Only five of the 15 entities had signed contracts which amounted to Sh895 million.

Further examination of records revealed that a local company had signed a contract worth Sh65 million even though it had not been issued with an award letter for a tender.

Another company undertook some partial works and submitted a claim of Sh10 million even though there was no letter of award of tender, no signed contract and that the company was not registered with the registrar of companies.

OVERSIGHT

Mr Ouko notes that the board of directors was also directly involved in the flawed procurement process whereby they participated in the revision of cost of design and supply.

The board was also involved installation of computerised conference management system tender.

Although the board had constituted an ad hoc committee to oversee the implementation of WTO projects, no report was prepared for consideration by the full board despite the many meetings held.

Mr Ouko further notes that the committee may not have carried out its oversight role as expected “given the haphazard manner in which the projects were initiated, implemented or not implemented at all”.