Kemsa rejected price discounts on Covid-19 kits

Kenya Medical Supplies Authority offices, Industrial Area, Nairobi. FILE PHOTO | NMG

By EDWIN MUTAI
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Summary

• A forensic audit by the Office of the Auditor-General found that Kemsa officials chose to pay Sh4,500 for a pack of 50 face masks, way above the Sh3,183 quoted by suppliers — a variation equivalent to 41.37 percent.
• A report tabled in Parliament said Ms Gladlab Supplies Limited had on April 9,2020 offered to supply Kemsa with surgical face masks with ear-loops at a discounted price of $30 (Sh3,183) per box of 50 pieces, down from an earlier quote of Sh4,750.

The management of the Kenya Medical Supplies Agency (Kemsa) rejected discounts by suppliers of Covid-19-related items, a special audit has revealed, raising the red flag on the controversial tendering which may cost taxpayers up to Sh2.3 billion.

A forensic audit by the Office of the Auditor-General found that Kemsa officials chose to pay Sh4,500 for a pack of 50 face masks, way above the Sh3,183 quoted by suppliers — a variation equivalent to 41.37 percent.

A report tabled in Parliament said Ms Gladlab Supplies Limited had on April 9,2020 offered to supply Kemsa with surgical face masks with ear-loops at a discounted price of $30 (Sh3,183) per box of 50 pieces, down from an earlier quote of Sh4,750.

Auditor-General Nancy Gathungu said Kemsa chief executive officer Jonah Manjari, however, ignored the discount offer and instead requested the company to supply the items for Sh4,500 a pack as had allegedly been agreed during negotiations between the supplier and the agency’s tender evaluation committee.

“In view of the above significant inconsistencies, the price determination for the supply of 30,000 units of surgical face mask disposal 3 ply ear-loop is questionable. An analysis of the price on the letter of intent of April 9, 2020 and the award price reveals that public funds of up to Sh39.51 million were potentially lost,” Ms Gathungu said.

The audit findings imply that Kemsa may realise a loss of Sh2.33 billion if the products are to be sold at the current market price.