How police choppers tender was inflated by Sh1bn

Officials at the Ministry of Interior inflated by nearly Sh1 billion the cost of three new police helicopters that were acquired last year from a foreign supplier, the Auditor-General Edward Ouko has revealed in a new report.

Mr Ouko says the ministry increased prices of the three new turbine engine helicopters by Sh906.1 million up from the original bid price that the tender evaluation committee had recommended.

The officials, Mr Ouko says, inflated the tender price from Sh4 billion to Sh4.96 billion at the negotiation stage.

Examination of the underlying documents and records revealed that only one bidder was invited and issued with bid documents on March 29, 2017 for purchase of the three new helicopters.

“Further, no evidence has been provided to show that there was technical input in preparation of the tender documents. As a result, additional essential standard avionics helicopter parts were not included in the original tender documents contrary to section 104 (a) of the Public Procurement and Asset Disposal Act," Mr Ouko says in the report tabled in Parliament last week.

The Ministry is also on the spot for procuring General Purpose Machine Guns and AK-47 rifles at a cost of Sh269.6 million ($2,696,250) from a bidder who "was not responsive on the rate of fire, maximum effective range and provision of accessories."

Unexplained payment

The State department further paid Sh76.6 million to the supplier of the choppers in unexplained payment for difference in exchange rates.

The audit shows that the helicopters, general purpose machine guns and AK 47 rifles were purchased under classified procurement and awarded to bidders through direct procurement.

The ministry floated and awarded tender number NPS/AW/001/2016/17 for purchase of AW139 LE law-enforcement twin turbine engine, AW 139 VIP-twin turbine engine and AW 119 KX-single turbine engine to a foreign firm at a contract sum of Sh4,927,993,312 (euros 39,123,357) through direct procurement.

The audit states that the tender was evaluated at preliminary and technical stages and was found to be responsive, but the Committee still settled for direct procurement.

"At the financial evaluation stage, the tender committee recommended the firm to be awarded the tender for supply and delivery of three new turbine engine helicopters to the National Police Service at a bid price of Sh4 billion (euros 31,941,200)," Mr Ouko says.

The tender evaluation committee also recommended that the outcome be negotiated with the bidder ‘to get better value for taxpayers’ money.’

This was to be achieved through harmonisation of the submitted bid documents with the issued tender documents and lowering the price without compromising the technical specifications required in the tender documents.

"However, at negotiation stage carried out on May 8, 2017, the total cost of the tender went up from the original Euros 31,941,200 to Euros 39,123,357 by Euros 7,182,157 (Sh906,100,927) contrary to tender evaluation committee recommendation for negotiation to lower the price without compromising the technical specifications in the tender," Mr Ouko says.

Negotiation committee

He said minutes of the negotiation committee indicates that additional items negotiated were not included in the original tender documents and included among others weather radar, enhanced ground proximity warning system, additional flight display and FLIR Ultra force 350 EP Camera all amounting to Sh906.9 million.

On procurement of machine guns and AK 47 riffles, Mr Ouko said the bidder did not provide certificate of incorporation and a weaponry manufacture authorisation or registration.