KRA direct procurement method was reasonable, says procurement regulator

October 5, 2016
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The KRA is currently facing a probe at the PIC for engaging in a Direct Procurement process to procure the EGMS solution for alcoholic, bottled water and soft drinks from SICPA Security Solutions SA, an international security solutions provider/FILE
The KRA is currently facing a probe at the PIC for engaging in a Direct Procurement process to procure the EGMS solution for alcoholic, bottled water and soft drinks from SICPA Security Solutions SA, an international security solutions provider/FILE

, NAIROBI, Kenya, Oct 5 – The Public Procurement Regulatory Authority has provided a much-needed vote of confidence to the Kenya Revenue Authority in an ongoing parliamentary oversight committee probe.

Through it’s Director General, Maurice Juma, the Authority has written a letter to the Clerk of the National Assembly Justin Bundi, providing its public procurement regulatory advise on a matter currently under the probe of the Public Investments Committee.

The KRA is currently facing a probe at the PIC for engaging in a Direct Procurement process to procure the EGMS solution for alcoholic, bottled water and soft drinks from SICPA Security Solutions SA, an international security solutions provider.

Prior to engaging SICPA for an expanded mandate, KRA had in 2013, retained the same firm for an EGMS solution covering tobacco, wines and spirits.

In the letter dated 26th September 2016 and focusing on a KRA tender for the procurement of an Excise Goods Management System (EGMS), the Public Procurement Regulatory Authority has described the taxman’s direct sourcing process for the security system as reasonable.

Upon the review of the tendering process of by the Procurement Authority, Juma has in the letter to the National Assembly committee confirmed that KRA’s procedures were reasonable in the prevailing circumstances.

“In our view, engaging SICPA Security Solutions SA for the extra scope of the assignments was a reasonable option based on the fact that the bidder installed software for verification of stamps, which had proprietary features,” Juma said.

In its review note, the Procurement Authority noted that KRA had processed bids from six bidders. The SwissheadquarteredSICPA Security Solutions SA; the Authority said had been assessed as the best provider of the services after scoring a 75.5% score.

However, the procurement authority disclosed that the first round of the tender process had been terminated as the quoted price was above a Sh240million amount earlier budgeted for the services by KRA.

After termination, the authority said, KRA had proceeded to initiate another procurement process for the Printing, Supply and Delivery of Security Revenue Stamps complete with a Tracking and Trace System and an Integrated Production Accounting System which is currently under probe by the PIC.

The review note, confirms that KRA provided acceptable justification points favouring a direct procurement method as guided by local procurement laws.

The note to parliament acknowledges that sourcing for another supplier to meet the extra scope that arose from the amendment of the Customs and Excise Regulations would have resulted to a separate contract for the same goods and services. “The management of two separate contracts for same services and goods could have posed contract managements challenges such as aligning delivery schedules and compatibility of services and associated goods,” the report says.

Founded in 1927 and headquartered in Lausanne, Switzerland, SICPA is a privately owned company providing secured identification, traceability and authentication solutions and services.

As a specialist solutions provider, SICPA a service provider to the American State of California and Canadian Revenue authorities among others, boasts of a wealth of experience working with sovereign governments in implementing product authentication and tax reconciliation systems which integrate ink-based covert features and sophisticated traceability technologies.

SICPA is the only organisation with production-monitoring systems that successfully ensure the traceability of products and secure the collection of excise tax and VAT throughout the world.

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