High Court stops KRA from signing Sh866 million tax automation contract

Times Tower, KRA headquarter. [PHOTO: JENIPHER WACHIE/STANDARD]

The High Court has barred Kenya Revenue Authority (KRA) from signing the Sh866 million tax collection system deal.

The decision by High Court Judge George Odunga is a major blow to the Kenyan Caesar together with the firm that had clinched the contested deal as they will have to wait until the case is heard and determined.

Justice Odunga also allowed Web Fountain to challenge the decision by the Public Procurement and Review Board that had technically kicked it out of the contest it was seeking to review. Webb Fontaine Group had asked the Public Procurement Administrative Review Board to reverse the award citing many errors in the tender process.

However, the board dismissed the application citing that it was filed outside the time limits set for an appeal. According to PPARB Act, a case filed for review of a tender ought to be filed seven days from the day bidders are notified of the award of the tender. Webb Fontaine had applied for the review of the tender awarded to Bull SAS Company by the taxman’s agent in the deal, Trade Mark East Africa.

“Leave is granted to operate as stay of negotiations, execution or application of any contract between Kenya Revenue Authority or its agent TradeMark East Africa or any party arising from the tender for the supply, installation of Integrated Customs Management System (ICMS),” Justice Odunga ruled.

He also quashed the decision that had dismissed the review and allowed Bull SAS to continue finalising the tender process. The Kenya Caesar announced it had signed the contract with Bull SAS but Web Fountain sent a statement indicating that the action by KRA to sign the contract was a nullity that would be challenged in court. Web Fountain made true its threats saying that the contract had been illegally procured.

“We can confirm that we have instructions to appeal the decision of the Public Procurement Administrative Review Board (PPARB) delivered on July 14, 2015 and pursue our client remedies as by law provided,” the firm announced.

Peculiar

In the ruling now quashed by the High Court, PPARB raised a number of anomalies in the transaction. “Indeed as you may be aware in the course of proceedings before the PPARB, KRA stated that TMEA was not its agent which begs the question of how KRA would turn around and proceed with a contract in the full knowledge of the concerns raised by PPARB.”

The board in their ruling declared that TMEA was not the procuring entity and could only participate in the process as an agent. Minutes of the evaluation committee shows that the ICMS tender, floated by KRA, was evaluated by 16 members, 12 of whom were employees of KRA while only three were from Trade Mark and one an employee of audit firm KPMG.

While KRA sought to remove itself from the deal by insisting that it was not the procuring entity, the board found this peculiar. “The board wishes to observe that a private firm acting independently of a public body cannot purport to carry out a public procurement of a public body and if it does, then such procurement would be a nullity,” read the PPARB ruling.

On July 17, TMEA announced that it had signed the deal but the question of its legality will now lie before the court when the case comes for full hearing.

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