Economy

Uhuru Kenyatta makes U-turn on centralised ICT tenders

uhuru

President Uhuru Kenyatta. PHOTO | PSCU

President Uhuru Kenyatta has reversed a 2018 executive order that placed the procurement of ICT goods and services by ministries and State corporations under one roof and in the hands of the Ministry of ICT.

Treasury Cabinet Secretary Ukur Yatani said the reversal is targeted at improving spending.

“To ensure efficiency and effectiveness in the utilisation of ICT related expenditure, we propose to decentralise the provision for ICT expenditure under the State department for ICT and distribute to the respective Ministries, Departments, and Agencies (MDAs),” he said in amendments to the 2021/22 Budget Estimates sent to Parliament.

The Head of Public Service Joseph Kinyua on February 23, 2018 directed the ICT Cabinet Secretary Joe Mucheru to develop and issue guidelines for Framework Contracting and Framework Agreements as required by the procurement Act to guide in pricing, quantity, and standards in the acquisition of ICT equipment, works, and services.

The ICT ministry went ahead and developed 58 framework contracts and 31 categories of firms prequalified under different categories which can be applied in the procurement of ICT equipment and services following the Public Procurement and Asset Disposal Act, 2015.

Mr Mucheru then directed all MDAs whose ICT budgets were consolidated to the department of ICT to provide updated requisitions specifying quantities and items that are aligned to the required specifications and budget ceilings as communicated by the National Treasury through a June 19, 2018 circular.

The CS also directed MDAs, including State corporations, whose budgets were not consolidated to use the Framework Agreements to ensure there are economies of scale and value for money.

The government had argued that standardising government procurement would lower the high costs with the government able to negotiate better deals.

It further said the centralised procurement would address challenges experienced by ICT in the public sector, among them the duplication of projects, non-compliance with standards, waste of resources, and exposure to security threats because of the use of illegal and unauthorised software.

Critics had nonetheless poked holes in the arrangement, saying that putting the ICT budget for the whole government under one roof would create high-value contracts with huge opportunities for rent-seeking and corruption.

Several MDAs, however, defied the presidential order with the Auditor-General’s office recently placing the State department for ICT on the spot over the matter.

“The State Department for ICT undertook the function of purchasing ICT equipment and related services on behalf of MDAs in contravention of the Presidential Directive Ref: OP/CAB.39/1A of March 2018, that required the procurement to be centralised at the Information, Communication and Technology Authority (ICTA),” Auditor-General Nancy Gathungu said in the latest report for the year to June 2019.

The Auditor said the ICT ministry went ahead to single-source assets worth Sh383.3 million from seven contractors.

The latest Auditor-General’s report revealed that out of the purchases, Sh350.8 million relates to procurement done on behalf of MDAs.

“Following the consolidation of procurement of ICT equipment and related services for the entire government, the State Department for ICT identified 54 products and 54 suppliers were awarded framework contracts to supply each of the identified products to the entire Government for two years, each corresponding to the products identified,” the report said.

“However, the framework contracting was not done in line with Section 114 of the Public Procurement and Asset Disposal Act, 2015, as only one supplier was selected instead of the mandatory minimum of seven,” it added.

The Auditor said the move eliminated competition necessary to ensure prices for commodities procured are comparable to the market value.

“This also eliminated equitability, value for money, and justification and fairness in the procurement of ICT-related products,” Ms Gathungu said.