As EACC intensifies its probe into the alleged tender scam for Covid-19 items at Kemsa, the authority is once again on the spot, this time, over the Sh63 billion medical kits project.
A Senate report has implicated the authority in the ambitious Medical Equipment Service (MES) program that has since turned into a scandal.
This comes at a time Ethics and Anti-Corruption Commission detectives have pitched camp at the authority, investigating top managers over alleged loss of billions of shillings meant for fighting the Covid-19 pandemic.
The managers led by suspended CEO Jonah Manjari are alleged to have dished out tenders to select companies in total disregard of procurement laws.
In the report by the Senate ad hoc committee that investigated the controversial program, Kemsa has been fingered for unilaterally handpicking a ‘questionable’ firm to supply consumables and reagents of the MES equipment.
Kemsa did not determine whether the reagents and consumables could be procured from any other supplier at lower prices.
This subjected the government and counties to exorbitant prices as the supply of the consumables was ‘monopolized by one firm’.
“Kemsa did not get the best price for the consumables and reagents for Lot 5 and Lot 7 as alleged because Kemsa did not try to establish whether the reagents and consumables could be sourced at more competitive rates from other suppliers,”
“The Committee, therefore, finds that Kemsa contravened Article 227 (1) of the Constitution which requires that public entities use a system that is competitive and cost-effective when it contracts for goods and services,” reads the report tabled in the senate by committee chairperson Fatuma Dullo (Isiolo).
Sh63bn medical kits deal was a criminal enterprise – Senators
Further indicting Kemsa, the report noted that Angelica Medical Supplies Limited, the firm that Kemsa handpicked to supply the consumables, had participated in the main MES tender under ‘questionable circumstances.’
Angelica Medical Supplies Limited was a subtractor of Bellco SRL, a company that was contracted to supply renal equipment under Lot 5.
“The MES project did end up creating a monopoly by select sub-contractors. For example, Angelica Medical Supplies Limited, which was identified as a subcontractor for Bellco SRL (Lot 5, Renal Equipment), became the sole supplier of consumables and reagents for renal and radiological equipment supplied under the MES Project
The committee observed that counties were buying the consumables relating to Renal equipment and Radiology equipment from Angelica Medical Supplies Ltd who was the only supplier at the time.
However, from 2019, counties had started purchasing the consumables from Kemsa. Curiously, Kemsa was buying the consumables from Angelica Medical Supplies Ltd.
The committee noted a clause in the MES contracts that required the government and counties to separately incur the cost of consumables and reagents after spending the billions of shillings on the equipment was skewed against the taxpayer.
“Under a managed equipment service arrangement, it is a reasonable expectation that recurrent costs such as the supply of consumables and reagents will be covered at no additional cost to the client.”
“Therefore, the Committee finds that the restriction on the supply of consumables and reagents to starter kits that were only to last three months under the MES project was severely skewed against the government and therefore the taxpayers,” reads the report.
Further, the committee observed that while suppliers provided the consumables are outlined in the contracts, were not required to provide them at all, with the taxpayers forced to shoulder the burden.
“That Philips was not required to provide for consumables under its MES contract was severely skewed against the government and therefore the taxpayers;
“Committee observes that Shenzhen Mindray, Bellco, and Esteem were required under their respective contracts to supply consumables and durables in respect of the equipment that the contractors supplied. In this respect therefore the Committee finds that the contractors have continuously failed to comply with the provisions of the contract,” the report shows.