• Vulcan had moved to the High Court challenging an order obtained by the commission, freezing the payments by School Equipment Production Unit (SEPU).
• EACC cited illegalities and irregularities in the award of the tender.
Image: COURTESY
The EACC’s swift intervention of stopping the execution an ‘illegal’ multi-million contract for the supply of school equipment has saved the taxpayer Sh150 million.
The Ethics and Anti-Corruption Commission won an appeal challenging the award of the cash by a lower court to Vulcan Lab Equipment Limited.
Vulcan had moved to the High Court challenging an order obtained by the commission, freezing the payments by School Equipment Production Unit (SEPU).
EACC cited illegalities and irregularities in the award of the tender. SEPU had successfully sought the Ministry of Education's nod to supply the equipment to select secondary schools.
In December 2017, Justice Hedwig I Ong’udi faulted the commission for freezing the payments and awarded Vulcan Sh150 million.
The award included Sh94.27 million for the work already done, Sh50 million for general damages and Sh5 million as accrued insurance premium.
However, the commission filed an appeal in 2018 challenging the High Court ruling awarding Vulcan the cash.
In a recent ruling, the Court of Appeal held the contract was illegal, terming it ‘a blatant distortion and violation of the law of procurement’.
The Court of Appeal further held that the contract was also illegal for being entered into in breach of various provisions the Public Procurement Disposal Act and Public Procurement Dispute Resolution.
“The PPDA provides in express terms that contractors, suppliers or consultants shall comply with all of its provisions,” the judgement reads.
In 2009, SEPU awarded Vulcan a Sh226.77 million tender purportedly for the supply of the school equipment.
SEPU had successfully requested the Ministry of Education to manufacture, produce and supply science equipment, chemicals and teaching aids to selected secondary schools in the country.
However, the commission intercepted the deal after revelations emerged that SEPU in collusion with Vulcan misappropriated public funds through breach of procurement.
According to investigations by the commission, SEPU and Vulcan violated procurement laws rendering the entire process null.
“In a meeting of Special Finance and General Purposes Committee held on July 15, 2009, SEPU was authorised to use either normal SEPU procurement procedures or contact the ministry for further guidance,” a brief by EACC reads.
Immediately after the meeting ended, a Special Tender Committee sat at 2.30pm the same day and settled on Vulcan.
This, the commission said, was in breach of the PPDA which prescribes that all procurement shall be handled by different offices in respect of procurement initiation, processing and receipt of goods, works and services.
“Thereafter, a frenzy of activities within two days began, leading up to the release of a cheque for Sh75.08 million to Vulcan.”
“SEPU and Vulcan created an agreement to supply unspecified goods at a contract price of Sh226.77 million. In the purported agreement, SEPU was required to pay 33 per cent of the contract price immediately upon signing of the agreement which translates to Sh74.83 million. Yet what was paid was Sh75.08 million,” the commission said.
The Court of Appeal held that the whole rushed process reeked of ‘corruption and blatant illegality’.
“It seems to me quite elementary that where a supplier enters into a contract that is in clear violation of the provisions of the PPDA… it cannot lie in his mouth to say that he was unaware of such violations,” the court said.
Edited by R.Wamochie