Kemsa tenders illegal but state will pay - Solicitor General

Solicitor General Kennedy Ogeto has admitted that Kemsa Covid procurement were illegal but the government will still pay suppliers.

Kenya Medical Supplies Authority gave out tenders worth Sh7.7 billion for supply of Covid-19 items.

Ogeto told MPs that although the procurement for the PPE was a total breach of the law, the suppliers should be "given reasonable payment for work done".

He appeared before the Public Investment Committee chaired by Mvita MP Abdulswamad Nassir over the special audit report on utilisation of Covid-19 funds.

“We wish to point out that the law provides the remedy of quantum merit in instances where contract does not exist or cannot be performed. The doctrine means reasonable payment for work done,” Ogeto said.

“The import of the doctrine is to ensure that even where there has been non-compliance with law, none of the parties to the illegal contract benefits from the contract at the expense of the other.”

In determining the compensation price, Ogeto proposed formation of a multi-agency team comprising of officers from the Attorney General, the Treasury, the Auditor General and the Public Procurement Regulatory Authority.

The team’s main purpose will be to decide the amount suppliers are paid so as not to suffer losses.

“Each of the parties has to go to the position they were in before the illegality; they will be compensated but not in the terms of the contract.”

Ogeto clarified that criminal proceedings will still be pursued against those who breached the law in the Sh7.7 billion tendering.

The agency will also recover millions already paid to firms that were paid by Kemsa last year if it is established that they were overpaid.

MPs, however, raised fears that paying suppliers who engaged in an illegality would set a bad precedent and open floodgates for similar incidents in future.

PIC vice chairman Ibrahim Ahmed (Wajir North) said rogue contractors will be emboldened by the decision and engage in illegal procurements and in effect benefit unjustly from the public coffers.

“When the contract is already null, don’t you think we are encouraging contractors not to follow the law and earn illegally?” Ahmed posed.

But Ogeto maintained that it is only fair that suppliers are not made to suffer losses after the government benefitted from the contentious supplies.

He further confirmed to the committee that the Attorney General’s office was kept in the dark during the tendering and neither did Kemsa seek legal opinion.

Ogeto told MPs to consider law change to make it mandatory for any public body to seek AG’s advisory on any tendering above Sh500 million.

Currently, the law compels entities to seek AG’s advisory only on tenders above Sh5 billion.

Edited by Henry Makori