Puzzle of cereals firm that bagged Kemsa PPE millions

KEMSA warehouse in Nairobi. [Elvis Ogina, Standard]

A company that deals in cereals supplied medical equipment worth Sh167 million to Kenya Medical Supplies Authority (Kemsa).

Appearing before the Senate Health committee yesterday, senior managers of Briema Grains Stores Ltd were hard-pressed to explain the firm’s engagement with Kemsa, having not had prior pre-qualification of tenders before the Covid-19 pandemic.

Director Abdighafar Ali and Operations manager Hassan Abdi Osman found themselves on the receiving end, especially after they informed the senators that they changed the line of business from cereals to the non-pharmaceutical supplies to cash in on the demand during the pandemic.

This forced the session chair Senator Fred Outa (Kisumu) to order the managers to furnish the committee with crucial documentation on the status of the company, years of operation and other pending queries by Monday.

It emerged that the company landed a lucrative deal with Kemsa to supply 200,000 KN95 masks at a cost of Sh700 each and 6,000 surgical masks (3-ply) pieces at a cost of Sh4,500 during that period following the Ministry of Health announcement on the pandemic.

Senators Outa, Abdullahi Ali (Wajir), Millicent Omanga (Nominated), Beth Mugo (Nominated) and Ledama Olekina (Narok) took the witnesses to task, on how the supply was initiated since Kemsa didn’t advertise for the specific items. The managers responded that after the ministry’s announcement, they decided to send a letter of intent after immediately changing their line of business, an explanation that did not sit well with some senators, even as Ledama argued that it happens all the time.

Procurement process

Senators Mugo and Omanga demanded clarification on that matter, insisting to know if the company had a practice of initiating procurement processes or did so only for the pandemic and who came up with the initial price.

The two denied that they had a prior commitment with Kemsa but they were at pains to respond to the senators’ questions, only insisting that they were driven by demand.

“The government made announcement for supplies to mitigate spread of the pandemic and we saw it in the media. We know Kemsa is a parastatal with monopoly for non-pharmaceuticals and pharmaceuticals and therefore sought the tender,” Ali told senators.

“We were engaged in cereals but knew the sector was collapsing due to Covid-19. We opted to buy and sell the commodity in demand. We wrote a letter of intent and got a commitment letter from Kemsa.”

It emerged during the grilling that the company had sought to supply one million surgical masks, 500,000 KN95 and 200,000 personal protective equipment (PPE) as per the letter dated May 4, addressed to Kemsa CEO Johan Manjari.

“As you are aware, the Covid-19 pandemic has hit the world in an unprecedented manner and Kenya is no exception. Many governments and institutions have been caught unawares arising from the nature of the virus that is highly contagious,” reads the firm letter to Kemsa. They argued that their interest to supply was necessitated by the urgent measures to contain the virus.

“The Government of Kenya in preparedness to respond to Coronavirus threat in the country has identified your organisations on a strategic partnership to supply Kemsa with the items,” the CEO replied

The lawmakers also demanded to know how long the company had been in existence, which the managers failed to indicate in the responses.

Different figure

Senator Ledama in particular sought to know if they had a chance to negotiate the prices before they got the commitment letter. “Did you get a chance to negotiate prices with Kemsa before an agreement was reached? Who came up with the prices? Did you discuss with Kemsa on quality and standard of the commodity to supply?” he asked.

The two managers told the senators Kemsa had proposed a different figure before they reached a deal. “We didn’t have any engagement with Kemsa before the pandemic. We negotiated a price after Kemsa quoted a different figure and after negotiations, were agreed at Sh700 and Sh4,500,” said Ali.

The managers also failed to confirm to the senators if they submitted any samples for inspection prior to delivery of or during the procurement process.