Media reports that the Kisii assembly bought thermos flasks for Sh8,000 apiece have generated an outcry over the wanton misuse of taxpayer money.
The Public Procurement and Asset Disposal Act 2015 prohibits purchase of goods and services at inflated prices. It requires those who do so to refund the money lost. There is, however, no single known instance where this law has been applied, despite the Ethics and Anti-Corruption Commission and Auditor General raising queries.
This puts to question the effectiveness of public procurement procedures. Have they achieved their goal of ensuring the national and county governments receive goods and services in a timely and cost-effective manner, and by qualified suppliers and service providers?
The Act, by design, emphasises the process more than results. Procurement officials can, therefore, take advantage of loopholes and manipulate the results while following procedure. It becomes impossible to prosecute such fraud. Even in the rare cases where there is no fraud, the process in itself makes the pricing of goods and services expensive.
Consider the purchase of flasks by the county assembly. There is a raft of requirements, even when bidding to supply such simple items, which lock out suppliers who could have made the process competitive. The tender process is tedious, with excessive paperwork, which is at times unnecessary.
The bidders could have been asked for bid bonds and performance bonds to protect the procurement entity in case they underperform. This is necessary for large complex projects but unnecessary for small everyday items. Additionally, the ‘market price’ always quoted does not consider delivery and other costs. The government takes too long to pay and suppliers, to cushion themselves, hike prices as a form of ‘interest’ for this unofficial financing they advance to government.
This, if critically interrogated, explains why, with a ‘market price’ of Sh2,000 per thermos flask, a supplier charging Sh8,000 is considered quite competitive. I would personally not supply the flasks at less than Sh10,000 each. I would be surprised if someone supplied them for less than Sh8,000.
Such complex procedures and requirements are only useful in provision of specialised goods and services whose price ranges are high and where there is high risk, especially if mistakes are made. They protect the procuring entity from losses and ensure they get value for money.
There is no reason why we should not buy flasks for government offices as we do for our private offices and homes – withdraw funds and send someone to the supermarket. Of course, this would be an illegality, a breach of the procurement laws.
Machakos Governor Alfred Mutua faces a court case in which he is accused of personally sourcing used Subaru Outbacks for his executives. This has nothing to do with whether the county government lost funds. It is about the process he flouted, never mind the money saved.
Granted, we must have systems and processes to maintain order, as people, if left to handle matters as they deem fit, would abuse such opportunities. But it is important to ensure the systems and processes add value and do not become bureaucratic hurdles with loopholes that officials use to swindle the taxpayer.
The writer is a practising architect and a lecturer at the Technical University of Kenya, School of Architecture and the Built Environment.