EACC to probe Kebs over car inspection tender to blacklisted firms

Lawmakers ask procurement regulator to initiate debarment proceedings against EAA and Auto Terminal Japan.

In Summary

• Public Procurement Regulatory Authority said the bid did not meet the required threshold.

• Attorney General said there was no way Kebs could vary the existing contract by floating a fresh tender.

Imported vehicles parked at a yard in Mombasa
Imported vehicles parked at a yard in Mombasa

MPs want the procurement authority to begin debarment proceeding against two companies mentioned adversely in a Kebs vehicle inspection tender.

Lawmakers recommended the move against EAA and ATJ over irregularities in the vehicle inspection tender awarded by the Kenya Bureau of Standards.

This followed the House’s adoption of a report by the Public Investments Committee chaired by Mvita MP Abdulswamad Nassir.

PIC said the two firms violated the provisions of the Public Procurement and Asset Disposal Act by misrepresenting facts in their bids.

The companies were flagged in a special audit by the Office of the Auditor General and a due diligence report by Kebs.

“The Public Procurement Regulatory Board 2015 should immediately commence debarment proceedings against the two firms,” the committee recommended.

They are accused of breaching the law in the Kebs tender for inspection covering financial years 2017 to 2020; and that of 2014-15 in the case of EAA.

Lawmakers have at the same invited the Ethics and Anti-Corruption Commission  to probe circumstances under which Kebs entered into a contract with the two companies.

"The EACC should submit its findings hereon to the National Assembly within sixty days of adoption of this report.”

Nassir said the pre-export verification of conformity tender, which was to expand the number of companies inspecting vehicles, was marred by irregularities.

“We learned that Kebs was trying to include companies that were flagged. All the allegations that they used forged documents were found to be true,” he said.

The PIC chair added that they advised the CEO to halt the tendering process to avert a situation where Kebs would be jeopardised.

“Proper business principles do not allow trade with bloated companies. If they knew these companies were recommended for debarment as was in their due diligence report, what was wrong in waiting for the regulator to conclude the process?” he asked.

He further faulted the agency for failing to advertise the tender beyond its website - which has no traffic worth the threshold of such a tender’s reach.

Attorney General Kihara Kariuki also flagged the tender after Kebs sought a legal advisory in the wake of the emerging issues.

The AG faulted Kebs for failing to disclose that the PVOC tender was a fresh one to increase the number of service providers.

The standards agency has an existing contract for vehicle inspection with Quality Inspection Services Inc. Japan, which lapses in April next year.

The AG said that much as the Procurement Act provides for variation of contracts, it doesn’t anticipate floating of a new tender to amend existing contracts.

“It is unfortunate that Kebs forwarded the draft addenda to the contracts to this office (AG) for review and legal clearance without disclosing that there was a fresh tender for enlargement of services and that the same tender had been challenged at the procurement review board and the High Court,” the Attorney General said.

Kariuki said Kebs ought to have informed him that the tender had been challenged, saying the office needed full disclosure on the tender.

The Public Procurement Regulatory Authority concluded that the procurement did not meet the requirements set in the tender documents, the Public Procurement and Asset Disposal Act, 2015, and the attendant regulations.

The agency observed the successful tenderers were determined on the basis of the highest financial score.

The procurement authority said that the approved procurement plan did not have an estimated value and an indication of the available budget.

“Procurement of enlargement of PVOC for motor vehicles, mobile equipment and spare parts was done without a purchase requisition,” PPRA said in its report to Parliament.

It also noted that the standard tender document contained information that did not allow competition among potential bidders.

“Additionally, the notification letter to the unsuccessful bidder did not disclose the names of the successful bidders and the charges for inspection contrary to the law,” the PPRA said.

Edited by Henry Makori