To get tenders, catch adverts in the papers — procurement boss

Few areas are as riddled with corruption claims as procurement. Many laws have been enacted to promote transparency, but people still find ways around them.

In an interview with the Star, Andrew Musangi, chairman of the Public Procurement Regulatory Authority, spoke about the uptake of procurement opportunities, fighting corruption and raising seed money for SMEs.

Are marginalised groups taking advantage of the Access to Government Procurement Opportunities?

I would say increasingly, they are taking advantage of it. At the initial stage, the key issue was awareness. Kenya is a very connected society and one of the tools we’ve used to reach out to people is to encourage them to visit the PPRA website.

Increasingly, not only at the national government level but especially at the county level, you find people are very connected with the government. These procurement opportunities range from the smallest of things, such as stationery and food supplies.

These are areas the SMEs and youth can participate in, and there are no big barriers of entry, in terms of tendering. They have various advantages under AGPO, including margins of preference and requirements of tender securities being waived.

Has the AGPO quota ever been realised since its launch?

No, it hasn’t. If I was to estimate at last count, we had about 40,000-45,000 tenders under AGPO. People are increasingly showing signs of non-awareness of the advantages under AGPO, but some of the fundamental issues relate to finance. You will have noticed that banks are providing special funds for SMEs, youth and women. The President also collapsed the youth and women fund into a single one. The fund is also building awareness for the AGPO disadvantaged groups to have them tap into that network of funding and take advantage of it.

Another issue would be technical, like awareness of how to tender in terms of latching onto the process, people not looking out for tenders when they are advertised. To that extent, the SMEs and informal business sector do not latch onto newspaper adverts as quickly as the more savvy people in the business sector do.

How challenging is it to have the government rectify this poor uptake?

It’s one of those things where you can’t clap with one hand, you have to partner with other organisations. Now in this sense, we are partnering not just with NGOs, we’ve had a lot of support from people like GiZ, World Bank in the procurement sector and increasingly, we are encouraging counties on board.

One of the whole aims of devolution was not only to decentralise governance but also participation in development. Now, if somebody in Kwale, Turkana, Mandera wants to participate in business with government in their county, you then have an engagement point at the local level. It is not so much that you have to rush to Nairobi to sit in the Ministry of Transport or Health to get a tender. You can actually participate at a local level. Now that decentralisation means we now have 47 partners in every county who we can work with to deepen procurement participation.

What sort of goods and services do women, youth and people living with disabilities offer the government?

Absolutely everything. One imagined that it might be the small common user items such as the stationery, foodstuffs, furniture, computers and photocopying equipment. People are very enterprising. There are those who go out of their way and import equipment that is not available locally, but even for locally assembled material, as you can imagine for the youth, things like furniture, where they have a margin of preference for locally sourced goods.

They can participate at that level. These people have workshops where they make very good furniture, which you and I buy. Why should the government buy furniture from abroad instead of buying it from a qualified carpenter making it in his workshop? If you saw with the police tender, the Minister of Interior said we are going to make the police uniforms from local manufacturers, and local textile manufacturers are participating. Though those might be the larger manufacturers, when you drill down, the same principle applies to smaller items that different counties will procure.

With the government delaying to pay contractors/suppliers, doesn't this undermine the process?

It has posed a challenge, particularly if you think of the disadvantaged groups; they are operating from a platform of very thin capital. If your capital ends up being tied up for six to eight months, they don’t have the financial shock absorbers to deal with such delays.

But the President stepped in and mandated that the pending bills be resolved. A lot of settlements have happened, particularly in the latter half of 2019. Money was released, payments have been circulating and particularly for the smaller procurements, those have been the priority.

From a Public Procurement Regulatory Authority perspective, we are increasingly encouraging people with issues of delayed payment because you can’t enter into a procurement without a budget. It is against the law. For us, when it comes to payment and the contract says you will be paid within 45 days, it has to be within those days. Not unless there was a problem with the delivery of the goods or there is a query as to the legality of the tender. But in most cases, it has habitually been the government delaying payments by procurement entities to that extent and this is where you find bedevilling issues like corruption.

How can raising seed money be alleviated?

I think there are two low-hanging fruits in this sector. One is that several banks have announced segregated funds for SMEs, and this is something that women, youth and PLWDs should take advantage of. Because these funds are available at competitive interest rates and they are funds sequestered for this particular sector.

Secondly, the government funding mechanisms, what used to be the youth and women fund, got collapsed into one [Uwezo Fund]. It’s now a fund that assists small and medium enterprises. People should go to those websites and take advantage of what has been segregated for them. PLWDs are registered and, therefore, get direct access to these funds.

If you get an opportunity, which is evaluated on merit, the funds aren’t dished out without proper audit. It means they have a shortcut where they won’t have the rigours of complying with security, and that’s the step the government has taken.

Do well-established funds use the youth or women as a front to win tenders?

It has been a concern, but the audit process is much tighter than it used to be. For example, you cannot wake up one day and claim to be an AGPO firm if 70 per cent of your share capital is not vested in youth, women and PLWDs, and 100 per cent of your directorship has to be with those persons. It’s becoming increasingly difficult and then with the publication of tenders on the online portal, you increase the transparency.

Of course, there are people who try to get around it. I’ve heard of situations where somebody has put his wife or sister to squeeze into the women category. Now if women accept to be used to take advantage of those opportunities, there’s very little we’ll be able to do at PPRA because under the name and directorship, it will be the woman indicated. If there’s someone behind you taking advantage, then it will be the women accused of shooting themselves in the foot.

But increasingly, we’re scrutinising these entities. Should we find that it’s a front and that all the signatories in the bank are the men, then sanctions will be taken. For PLWDs, we look at the registration and documentation, and the youth can be identified using their IDs.

How is the authority dealing with the issue of corruption?

There are two things: I always look at the PPRA as preventive medicine. If you look at transparent reporting structures to see who’s getting tenders, go to the PPRA portal. You’ll find these tenders being uploaded as per the presidential directive. We’re not a 100 per cent compliant but where we find non-compliant officers, we’re definitely taking strict action.

Secondly, we’re working with the Multi-Agency Taskforce, which is appointed by the President to deal with corruption. Corruption is one of those things that if people don’t see that it will be met with severe sanctions, nobody responds to it. We strongly support this and work together with the Directorate of Criminal Investigations, Office of the Director of Public Prosecution, Kenya Revenue Authority and Central Bank of Kenya in the fight against corruption from the top not from the bottom.

We are concerned with that state agency or ministry that diverts public resources through misprocurement, fake tenders, fake supplies to take billions out of the public coffers. Those are the people who you’re increasingly seeing being taken to court. That sends the message that corruption will be dealt with, no matter where it emanates from.

From my perspective, that is the second phase, which is deterrence. People should know there are no sacred cows or anyone spared, no matter who you are as you have seen. That should send the message filtering through to the bottom, that you will not escape scrutiny and if you’re found, you’ll find yourself in court charged.

You will be out on bail during your trial, but ultimately, you shall see high-level convictions, people being put behind bars, and that will be an everlasting lesson to the next person who even contemplates stealing public funds. To me, that is where this war will be won.

If we have lived year after year of not having consequences for matters related to corruption, now people will check your bank accounts, tax returns and see if you have Sh100 million in your bank account that you cannot account for, that doesn’t match your wealth declarations as a public officer, that doesn’t match any economic activity that you’re known to be in and you can’t explain where it’s from.

We even go further, you have the Assets Recovery Agency. They will just go to the court and apply for the forfeiture of the assets. Whether we can pin it down to a specific act of corruption is irrelevant. If you have unexplained wealth, the only conclusion is that you stole it. You have to operate in a very harsh environment; corruption is a disease that has to be fought in the most unorthodox and merciless of ways.

Edited by T Jalio