Ministry loses Sh126.8m in questionable fertiliser deal

The Ministry of Agriculture is on the spot over the bungling of a tender for subsidised fertiliser that resulted in the loss of Sh126.8 million in the year to June 2015.

Auditor-General Edward Ouko says the ministry disqualified the lowest bidder who won the tender to supply the country with imported fertiliser at a total cost of Sh630 million and went for the second lowest bidder without giving reasons.

Mr Ouko says in the ministry’s audit report that the second lowest evaluated bidder was awarded the tender at a cost of Sh756.9 million resulting in a difference of Sh126.9 million.

“In awarding the contract to the second lowest evaluated bidder without giving justifiable reasons, the ministry lost an amount of Sh126,850,000, being the difference between the amount paid to the second lowest evaluated bidder and the amount that would have been paid to the lowest evaluated bidder,” Mr Ouko says in the report dated July 13, 2016 and tabled in Parliament by Leader of Majority Aden Duale on Tuesday.

Mr Ouko criticised the various committees that handled the tender as established pursuant to the Public Procurement and Disposal Regulations, 2006 for not following the laid down procedures in the award of the tender.

“As such, it is evident that the government did not get value for money in this procurement.” Mr Ouko said the ministry advertised for supply and delivery of 54,950 metric tons equivalent to 1,099,000 bags of fertiliser.

He said out of 21 firms which responded, seven were found to be responsive and were awarded contracts to supply fertiliser at different prices per 50kg bag, depending on the region or point of delivery.

“Lot 1 was won by bidder No 4 (M/S Global Link East Africa Limited) to supply at a price of Sh2,655 per 50 kg being the lowest evaluated bidder at a total cost of Sh265,500,000.

“Lot 2 was also won by bidder No 4 at a price of Sh2,430 per 50 kg bag with a total price of Sh364,500,000,” Mr Ouko said.

He said information availed for audit indicates that M/S Global Link East Africa declined to sign the contract agreement even after delivering their acceptance letter.

Mr Ouko said when the winning bidder declined to sign the contract agreement, the Ministerial Tender Committee disqualified M/SGlobal Link and proceeded to award the lucrative tender to the second lowest evaluated bidder who was bidder No 6 (M/s Performance Parts Limited).