Concern over graft as State centralises IT procurement

A peculiar decision by the government to centralise procurement for all Information Communication Technology supplies for all ministries and parastatals, leaving it ICT ministry has not only led to slow service delivery, but also effectively killed hundreds of Small and Medium Enterprises across the country.

This financial year alone, the ICT ministry has been allocated Sh18 billion for development, a sharp increase from the modest sums it used to receive in the previous years. This budget is likely to rise as there will still be a supplementary budget in March.

This drastic move is similar to others undertaken by Jubilee government which have all ended in financial scandals.

BIGGEST SCANDALS

The first was at the National Youth Service (NYS), where the Youth ministry restricted the NYS to procure all goods and services from the ministry headquarters. The move gave birth to Jubilee government’s biggest scandals dubbed NYS 1 and 2 where it is believed, by conservative estimates, about Sh10 billion was swindled from government coffers.

A similar policy was applied in advertising that saw all government ministries and parastatals have their communication budgets managed by the Government Advertising Agency (GAA), a move that riddled implementation of the policy with corruption.

Currently several former officials of GAA and NYS are facing corruption related charges.

Over the last seven months, the ICT ministry has identified 41 items that need to be supplied across the government and identified 25 companies to undertake this monumental task under what is known as "framework contracting".

This means some companies are supplying more than one item, begging the question whether these companies have the capacity to supply the entire government with a fast-moving commodity.

It is these companies that are expected to gobble up the Sh18 billion IT budget supplying everything ranging from desktop computers, laptops, digital cameras, printers and even flash disks.

This move means that ministries and semi-autonomous government organisations will place their orders to these companies. And in line with this requirement, ministries and parastatals have lost their ICT budgets and have to rely on the selected companies for procurement.

LONG DELAYS

“We have not been able to get new computers since July last year. Procuring ICT goods and services is one tedious process nowadays. You stay in the queue for months on end,” said a source at the Presidency.

Another source from Immigration Department said any time one of the two printers they use to produce passports breaks down they have to wait for months on end for repairs because their ICT department has been rendered impotent.

Civil servants in various ministries painted a picture of a hopelessness and sense of despair due to slow procurement and repair of equipment. Some ministries have now been forced to use trial versions of anti-virus software as framework procurement guidelines are not available.

ICT Cabinet Secretary Joe Mucheru admitted to procurement delays as a result of the policy, but said the government will save money in the long run.

“When you buy in bulk the price is low, when you buy in small bits the price is high. We want manufacturers to set camp here since they are assured of bulk-buying. If we order 200,000 computers for all government employees, the cost will come down to 40 per cent. The savings allows the government to do much more in other areas,“ he said. He said he does not know the 25 companies that were selected but was quick to add the procurement laws were followed.

HIDDEN INTENTIONS

Adrian Kamotho Njenga, the Secretary General of the ICT Association of Kenya (ICTAK), said the move runs counter to the constitutional imperatives of efficiency and value for public money.

“The framework contracting strategy adopted by the ICT Ministry is a fraud. At the very least, it does not disclose the volume of ICT equipment to be procured as required by law. A competent public officer properly exercising discretion and acting in good faith cannot commit the country to a two-year desktop computer purchase contract at the price of Sh98,000. Besides the steady and sure decline in prices of ICT assets makes it foolhardy to commit to a fixed contractual price, unless there are hidden intentions,” he said.

On March 1, 2018, Head of Public Service Joseph Kinyua issued a circular titled “Transparency and Accountability Prescriptions for Accounting Officers of Ministries, Departments and Agencies.”

The circular largely majored on prudent and transparent use of public resources as well as the fight against corruption, but one line gave rise to what is becoming a major headache to service delivery across the government.

“All ICT procurement in government ministries and state corporations is to be centralised under the ministry of Information, Communications and Technology in order to assure economies of scale, and optimise upon the shared services strategy. The National Treasury and ministry of ICT will issue directions on implementations of e-procurement in all agencies,” stated the circular.

COLOSSAL LOSS

The circular was copied to all cabinet members, Principal Secretaries and accounting officers as well as chief executive officers of state corporations and agencies.

And, with that, ministries and parastatals lost their ICT budget for the 2018/ 2019 financial year.

In August last year, the information ministry placed an advertisement in the government-owned MyGov newspaper inviting “sealed bids from eligible candidates under framework agreements for supply and delivery of ICT Equipment, devices, software and services to government ministries/departments, parastatals and semi-autonomous government agencies for a period of two years … “

On December 10, 2018, ICT PS Jerome Ochieng said that the ministry in conformation with the circular had already identified “34 framework contracts”

“For smooth operationalisation of this framework, all ministries, departments and Agencies (MDAs) whose ICT budget was consolidated to state department for ICT are required to provide updated requisitions specifying quantities and specific items that are aligned to required item specifications and budget ceilings as communicated by the National Treasury …. In addition, MDAs including State corporations and SAGAs whose ICT budget were not consolidated can now use these framework agreements to take advantage of economies of scales and standardisation of ICT procurement,” stated Mr Ochieng.

The government seemed to believe that this move would save money but a closer look at the documents given to the Sunday Nation by sources indicated that the move is in fact leading to colossal loss of money.

RIP OFF

The Public Procurement Oversight Authority had, in 2010, issued guidelines for framework contracting. It is these guidelines that the ICT ministry invoked when it chose the 25 companies. A closer look at these guidelines show that these guidelines may have been abused.

“Procuring entities may use an indefinite quantity framework contract when the procuring entity cannot predetermine, above a specified minimum, the precise quantities of goods and services or works that will be required during the contract period, and it is not advisable for the procuring entity to commit itself for more than a minimum quantity …. The contract must also specify the maximum and minimum quantities that the procuring entity may order under each task or delivery order,” the guidelines state.

A comparison at what the successful companies are offering and the PPOA guidelines shows that the public is being ripped off.

For example a desktop computer which goes for an average of Sh40,000 is to be procured at Sh98,000 from one of the pre-selected companies.