- The State is seeking to lower the threshold value of public tenders approved by the office of the Attorney-General in an in an attempt to curb abuse of procurement systems by some rogue officials.
- Solicitor-General Kennedy Ogeto disclosed they were considering revising the public procurement law to have the AG sign off all public tenders valued at a minimum Sh500 million.
The State is seeking to lower the threshold value of public tenders approved by the office of the Attorney-General in an in an attempt to curb abuse of procurement systems by some rogue officials.
Solicitor-General Kennedy Ogeto disclosed they were considering revising the public procurement law to have the AG sign off all public tenders valued at a minimum Sh500 million, down from Sh5 billion currently—handing the government’s principal legal adviser tighter oversight of public contracts.
Section (134) (b) of the Public Procurement and Asset Disposal Act
(PPAD Act) provides that the accounting officer of State entities shall have the responsibility of preparation of contracts in line with the award decision, and only awards of a value of exceeding Sh5 billion are cleared by the AG before they are signed.
“Given the non-compliance by ministries, departments and agencies of government in these
legal requirement in the past years and the damage already caused to government in form of signed contracts, we think time has come for us to revise the threshold,” Mr Ogeto said when he appeared before the National Assembly’s Public Investments Committee (PIC) chaired by Mvita MP Abdulswamad Nassir last week.
Mr Ogeto said some State entities circumvent the procurement law by splitting tenders to escape scrutiny of the contracts by the AG.
“We have seen some entities braking them (contracts) down to say Sh4 billion or Sh4.95 billion to escape AG oversight on those contracts. There is need to review it (threshold) to Sh500 million. This is reasonable to avoid breaking of large contracts,” he said.
“Even where the threshold is Sh500m and the Principal Secretary who is also the accounting officer has doubts on the contract, the law must compel him or her to refer the contract to the AG for approval.”
The AG’s office recently came under scrutiny over the Sh7.8 billion Covid-19-related procurement scam at the Kenya Medical Supplies Authority (Kemsa).
Although the law demands that the AG sign off all tenders valued above Sh5 billion, the Solicitor-General said Kemsa officials did not seek the advisory opinion of the State principal legal adviser’s office or notify the PPRA.
Kemsa by-passed the AG’s office by splitting the Sh7.8 billion tenders and awarded contracts to 102 firms.
The AG’s office and the Treasury have recently raised concerns over irregular tender deals by some State officials, leading to wastage of taxpayer funds either through surcharges for breach of contract or spending on non-viable projects.
Legal awards against the State for contract breaches, unlawful dismissals, lawyers’ fees, human right violations and other court disputes hit Sh101.2 billion by the end 2019, highlighting the heavy price taxpayers have to pay for unlawful decisions by officials.
Kenya is facing a further Sh769.9 billion in claims from ongoing litigation in local and international courts even as 700 lawyers from the State Law Office battle to clear a huge backlog of such cases.
“The tendency with government officials to have a laissez faire attitude in making unlawful decisions should be strongly discouraged and such officers penalised accordingly.
“This reduces the mentality amongst government officials that an offence so committed it is the government, which is the defendant and not the officer as a person,” AG Paul Kihara said in a recent newsletter by the State Law Office.
The Treasury has also taken issue with some officials for signing off contracts which locked up billions of shillings in taxpayer funds through delays in implementation or non-viability.
Treasury Cabinet Secretary Ukur Yatani in his draft 2021 Budget Policy Statement (BPS) said the State was targeting Sh152.35 billion in cash savings from cancellations of about a third of stalled public projects.
He said a comprehensive nationwide audit of State projects had been completed, paving the way for a shake-up of cash-gobbling ventures in the wake of the Covid-19 pandemic.
“This contributes to fiscal consolidation attainment as rationalisation/cancellation of even a third of the stalled projects could yield up to 1.5 per cent of the GDP in fiscal savings,” Mr Yatani said in the draft BPS.