• A special audit was ordered by the National Assembly's Public Accounts Committee.
• Cases cited of same contract number allocated to more than one supplier.
Image: EZEKIEL AMING'A
The Defence ministry is in a spot over major irregularities flagged in its procurement of foodstuffs and other consumables for Kenya Defence Forces barracks.
A special audit revealed the Defence department engaged non-prequalified suppliers, used irregular procurement methods and paid for goods not delivered.
Auditor General Nancy Gathungu, in a report covering financial years 2014-15 to 2017-18, reported some firms awarded contracts were not in the prequalified list of suppliers.
She also flagged the use of restricted tender in contracts without justification, as well as irregularities in the tender opening, evaluation and notification of awards.
In some of the 226 contracts reviewed, tenders were awarded to suppliers that were not evaluated, or those that failed, and also where unsuccessful bidders were not notified.
KDF was also found to violate decisions of the Public Procurement Administrative Review Board.
Cases of unsigned contracts and irregular price increases were also noted in the representative sample.
“The audit identified some instances of infractions of the public procurement laws,” Gathungu said in the report tabled in Parliament on January 24.
“It was noted contracts had their original contract prices varied upwards contrary to the law, which provides that prices quoted by the bidder should be fixed during the contract period.”
The flaws ranged from the absence of approved procurement plans as well as failure to comply with the law on restricted tendering and direct procurement.
For the Kenya Army, Gathungu noted instances where the same contract number was allocated to more than one supplier of food rations.
“A contract number cannot be shared by more than one supplier in a given financial year,” the auditor said.
This was the case of suppliers of cooking fat, white/brown bread, unfertilised chicken eggs, margarine, coffee blend and fresh milk.
On irregular payments, the audit established that the Kenya Army irregularly paid more than Sh34.7 million for dry rations.
“It was established the claims related to foodstuffs had either not been delivered or had inconsistencies with the dates in documents.”
Irregular payments were also flagged at the Kenya Air Force where cases of inconsistent supporting documents and differing payee names were noted.
“The audit noted instances where items were procured and delivered but the LPOs (local purchase orders) could not be traced. It was difficult to ascertain the specific amounts.”
The Kenya Navy also failed to account for the expenditure of Sh37 million of the Sh871 million the unit spent during the period under audit.
“The payment vouchers were not availed yet expenditures had been recorded as having been paid,” Gathungu said.
The Defence ministry also irregularly awarded 18 contracts to firms that were not prequalified, in violation of the Public Procurement and Asset Disposal Act, 2015 (PPADA).
“There is, therefore, the likelihood that the companies awarded the 18 contracts did not meet the criteria prescribed in the Act, during prequalification,” Gathungu said.
She emphasised there was no justification or explanation why the ministry used restricted tendering method to procure foodstuffs.
Four contracts for different foodstuffs did not have their tender opening minutes and registers signed as required by the law.
Gathungu also flagged the award of tenders to firms that have not been subject of financial evaluation, pointing to cases in Isiolo and Wajir.
In Isiolo, a firm trading as Shamz Enterprises was awarded a tender for supply of fresh vegetables, fruits, and potatoes, instead of Medabs Ltd.
The latter was recommended by the evaluation committee, begging the question on the justification of the award.
“There was no evidence that financial evaluations were conducted before recommending the tender to be awarded,” Gathungu said, citing violation of the Public Procurement and Asset Disposal Regulations, 2006.
Of the reviewed 226 contracts, four were found to have proceeded to technical and financial evaluation and eventual award yet the firms were not responsive.
The auditor cited a case in Nanyuki where Jambo Grocers was awarded the tender yet Pemwas Enterprises had been recommended for the award of eggs supply tender.
“The bidder was awarded the tender based on the professional opinion issued by the head of procurement contrary to PPADA, 2015.”
New KCC was also awarded a tender for supply of fresh cow milk to Gilgil Barracks without attaching a copy of the public health certificate.
“New KCC was non-responsive as it did not attach a copy of the certificate, a document considered mandatory,” the audit read.
A firm trading as Mountain Slopes was also irregularly awarded a tender for supply of milk to Nanyuki Barracks, yet was non-responsive at the evaluation stage.
The evaluation committee did not recommend Mountain Slopes, which scored 26 of 50 points. Northern Wing General Suppliers and Habibani Enterprises got 49 points.
Also flagged was the tender awarded to Truefood Ltd for supply of beans and tomato sauce, yet it was not recommended by Kebs.