BLOW TO EACC AS COURT DISMISSES BID TO REFUND OF SH45 MILLION FROM SUPPLIERS TO NYS.

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Supplier dismissed allegations of collusion and stage managing the bid prices nor distorting the price competition. It was their contention that each individual bidder competitively quoted and the NYS was under no obligation to accept the bids.

BY SAM ALFAN.

Ethics and Anti-Corruption Commission has suffered a blow in its attempt to seek a refund of Sh45 million from one of the suppliers to National Youth Service (NYS).

This was after the high court dismissed the application for restitution of Kshs. 45,517,241 allegedly paid paid over and above the public works’ estimates, to sevaral companies.

The anti-graft body filed the application two years ago seeking the amount, jointly and severally from Catherine Nkirote who trades as Venyte suppliers, Joscate Sales and supplies, John Kago Murima , Jane Makena Maingi who trades as Qsetters Investments.

“Accordingly, It is my finding that the plaintiff (EACC) has not proved its case on a balance of probability against the defendants,” justice John Onyiego ruled.

In a 30 page judgement, the judge also lifted an order of injunction, issued on May 3, 2018 preserving the funds.

The judge said the concerned government officials who played part in the procurement process with their eyes closed to the detriment of the public, should be held accountable.

Regarding the restitution, the Judge said EACC did not take into account the fact that the suppliers were supposed to buy goods on behalf of NYS at the exact market price without making profit.

“I do not find it reasonable that the Catherine Nkirote T/A venyte suppliers and Joscate Sales and supplies, John Kago Murima , Jane Makena Maingi T/A and Qsetters Investments should be blamed for earning supper profit,” the Judge said.

The commission argued that the companies were awarded tenders for NYS/93/2024-2015 and NYS IRT/35/2014-2015 were irregular and subsequent contracts were null and void.

In the alternative, the EACC prayed for an order for restitution to the NYS Kshs. 33,700,000, being the difference between the payments received and actual value of materials supplied.

The money was being held in five bank accounts at Equity and Co-operative Banks.

The commission case was based on allegations of embezzlement of government funds through illegal and irregular contracts allegedly awarded to the firms.

The agency said the goods and services to NYS were made at inflated prices, compared to the prevailing prices then.

Upon receipt of information regarding the said contracts, the agency embarked on investigations which revealed that the NYS under Ministry of Devolution and Planning in the financial year 2014-2015 invited bids for the supply of bed making materials for pre-fabricating double decker beds for use at the NYS college.

It also found that under tender one of the tenders, three entities were invited namely M/s Qsetters Investments, M/s Joscate sales and Elandic logistics.
In yet another tender No.NYS/RT/35/2014-2015 ,ten entities were invited to bid among them Qsetters Investments.

On February 6,2015 , Qsetters Investments under Min No.13/24/2014-2015 was awarded tender Ref.No. NYS/93/2014-2015 for supply of supply of 1,000 cutting disc 14″ at unit cost of Kshs. 1,800 and 1,000 grinding disc 9″ at cost of 1,950 and that Qsetters Investments was issued with an LPO and payment voucher on June 25,2015 following delivery of the items, she was on December 3,2015 paid cheque of Kshs. 3,556,034.50 million.

It also said that on June 16,2015 Qsetters Investments again vide tender No.MS/RT/35/2014-2015 won an award to supply 15000 round tubes 1 and 1/2″ at unit price of Kshs. 24,400 and 5,000 cutting 9″ at a price of Kshs.1,650 and she was issued with an LPO and payment voucher following delivery of the items worth Kshs. 44,250,000 and subsequently paid a net payment of Kshs. 41,961,206.90 on December 2013.

The agency claimed that the procurement process was tainted with fraudulent practices by Catherine Nkirote who was in direct control of the three entities that were invited to tender including the introduction of Eribet fair deal supplies owned by Betty Maingi Kagendo a sister to Nkirote and Qsetters Investments.

The agency further stated that, despite not being the proprietor of the contract winning entities , Nkirote signed contract documents on behalf of the winning entities the sole attention of stage managing the prices.

The supplier maintained that tender awards were procedurally, competitively and lawfully done and companies which won.

They argued that they were invited by NYS who voluntarily and without coercion accepted the prices as suggested, placed the bids and consequently received the claims.

They contended that the allegations of overpricing are scandalous for the EACC failed to take into account the facts that the items were purchased, loaded , transported , offloaded and taxed among other accrued costs hence the need of profit.

They also told the court that, Kenya market is a free market economy that works willing buyer and willing seller and having bid and their bid accepted, the court cannot be invited to bargain of a party that has already enjoyed the fruits of contractual terms.

According to the supplier , the prevailing market rates as quoted by the Ministry of public works are simply estimates which acts as a guide to NYS officials and moreover , any fault if any it should not be apportioned to them as business men and women engaging in official business.

They dismissed allegations of collusion and stage managing the bid prices nor distorting the price competition. It was their contention that each individual bidder competitively quoted and the NYS was under no obligation to accept the bids.

They said having lawfully bid, won the contracts and eventually paid , they were free to spend their money the way they wanted including transferring the same to any other person or even buying property.

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