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Procurement boss in trouble over KRA revenue stamps

James Momanyi @jamomanyi

Public Procurement Regulatory Authority (PPRA) director general Maurice Juma was yesterday put on the spot for giving Kenya Revenue Authority (KRA) the green light to award Swiss company SICPA Security Solutions SA a contract illegally through single sourcing.

In May 2012, KRA placed an international tender for the printing, supply, and delivery of security revenue stamps, complete with trace and integrated production accounting system, or the Excise Goods Management System (EGMS). Seven companies placed their bid but after the evaluation process, the tender was awarded to SICPA for Sh4.5 billion for a period of five years, commencing April, 2013.

The contract covered three goods, namely tobacco, wines and spirits. The total estimated number of stamps was 3.6 billion.

But in June 2013 Treasury, through a legal notice, expanded the scope and the number of products to be fixed with revenue stamps. The total estimated stamp needed also increased to an estimated Sh12.8 billion. The expanded scope of EGMS included beer, mineral water, soft drinks and cosmetics.

KRA sought the opinion of PPRA with an intention to actualize this tender through direct procurement, which was granted and in April 2015, SICPA Security Solutions SA was awarded the Sh17.7 billion tender through single sourcing.

Yesterday the National Assembly’s Public Investment Committee (PIC) put the PPRA director general on the spot for allowing KRA to execute the multi-billion projects without first going through a competitive process as expressly laid down in the procurement law.

“These were clearly two different tenders. The first tender involved three products. The second tender involved more products and expanded scope of services. SICPA would have continued with the first tender while KRA would have opened another tender for the expanded scope because the terms and conditions had changed.

Why did you allow KRA to single source when the tender would have been opened to other companies who would have even been cheaper?” PIC Chairman Abdulswamad Nassir asked.

In his mitigation, Juma said that his opinion was based on the justification that was provided by  KRA. He, however, stunned the Members of parliament when he confirmed than he did not look at all the procurement and tender award documents before giving his opinion.

“KRA told us that SICPA was the only successful bidder in the previous two procurements they conducted and who had the capacity for EGMS project. But in my opinion I advised KRA to test the market in future to establish whether there are new entrants or other technically qualified bidders for the supply of the products,” said Juma.

Auditor General Edward Ouko, in his report, had also noted the award was contrary to the Public Procurement and Disposal Act 2015 and that KRA may not have received value for money on that contract.

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