CBK tender ‘was faulty from the start’

By PAUL WAFULA

Kenya: The Central Bank of Kenya (CBK) did not invite observers to its tender committee meeting that saw the institution controversially award a Sh1.2 billion software security contract to a British firm, The Standard can reveal.

The tender that has landed the bank’s governor in trouble was for the supply of security software.

Correspondence from the Public Procurement Oversight Authority (PPOA) also shows that CBK’s tender committee had cancelled the contract but top managers at the bank went ahead and issued a notification letter, exposing taxpayers to losses worth millions of shillings. 

According to a letter by the procurement watchdog, CBK did not invite at least two observers to the tender committee as stipulated in regulations yet the tender was worth more than Sh50 million. The anti-corruption authority yesterday confirmed receiving the green light to charge CBK Governor Njuguna Ndung’u over his role in the Sh1.2 billion tender.  

The Director of Public Prosecutions ordered the prosecution of Ndung’u over alleged abuse of office.

“It is true that we have received consent from the DPP; we are looking at the document and we will summon the governor to allow due process to take its course,” Ethics and Anti-Corruption Commission (EACC) spokesman Yassin Amaro said in a telephone interview. But EACC did not say when it plans to summon Prof Ndung’u. 

It is not yet clear what the role of the governor was since he does not sit on CBK’s tender committee, but it is understood that he interfered with the decisions made by the team.

But it is the revelation that PPOA had declared the tender illegal yet CBK issued a notification letter to Horsebridge Network Systems, a network and security infrastructure firm headquartered in England, that raises eyebrows.

“It is, therefore, illegal to issue a letter of notification to the recommended firm in the evaluation report without approval of the tender committee,” PPOA Director General Maurice Juma said in a letter seen by The Standard.

Trouble started in November 2012, when CBK signed a procurement plan.

CBK began on a wrong footing when the procurement plan was itself not in the format recommended by PPOA according to a circular issued in February 2009.

The tender was advertised in May 2012. Tenders were opened on July 3, 2012, at 2.30pm.  Five officials from CBK participated in the tender opening exercise.

PPOA also faulted the move by the bidders to carry their tender documents to the venue as being contrary to the Procurement Act, which stipulates that each tender delivered “shall be placed unopened in the tender box”.

Only six firms submitted their bids, out of 58 that bought the tender documents.

The respondents were AUA Industria, Orad Limited, Indra Limited, Azicon Kenya Ltd, Horsebridge Network Systems EA Ltd and Engineered Systems Solutions.

The evaluation exercise was concluded on July 27, 2012, and was undertaken in five stages. Three bidders, AUA Industria, ESS and Indra Limited, failed to meet the mandatory requirements.

The fourth, Azicon Kenya, failed to meet the technical specifications, leaving only Orad Kenya and Horsebridge to qualify for the financial evaluation.

It is at this stage that the friction between CBK’s tender committee and top managers worsened.

Though Horsebridge had been earmarked for the award, the tender committee reconsidered its move to lock out the other firms on a mere technicality.