Investigations into the alleged fraudulent procurement process at the East African Community (EAC) Secretariat found irregularities that undermined the independence of the procurement process, a parliamentary committee has revealed.

It all started during last August’s sitting when MP Bernard Mulengani (Uganda) raised matters of urgent public importance including allegations of irregularities in procurement of group life and health insurance for East African Legislative Assembly (EALA) members and EAC staff for the period between July 1, 2016 and June 30, 2017.

At the time, Speaker Dan Kidega referred the matter to the Assembly’s standing Committee on Legal, Rules and Privileges for investigation.

People questioned during investigation include EAC Secretary General, Amb. Libérat Mfumukeko, Deputy Secretary General in charge of planning and infrastructure, Dr. Enos Bukuku, and the Counsel to the Community (CTC), Dr. Anthony Kafumbe.

Lawmakers questioned them about a contract that was awarded to Liberty Life Assurance Kenya Ltd, the third lowest bidder whose financial offer was $746,090, instead of the real winner, Britam Life Assurance Company, who was asking for $480,008.

On Wednesday, committee chairperson MP Peter Mathuki (Kenya), told the House that in the course of addressing the issue of irregularities in the procurement, they inquired into issues such as: the appointment of the review team;  and non-compliance with the bidding period, among others.

Mathuki said that on August 1, last year, the Secretary General appointed a review team comprising of four EAC staff.

The decision to appoint the team was taken at the meeting of executives held on August 2, 2016 but the "appointment instrument” is dated August 1, 2016.

Regulation 44 of the financial rules and regulations establishes structures and institutions responsible for all procurements and processes of the EAC, Mathuki said, adding that these structures and institutions are; the Secretary General, the Procurement Committee, the Originating Unit, the Procurement Unit, Bid Opening Panel, the Evaluation Committee, the Complaints Committee, and the Inspection Committee.

These structures and institutions, he said, are mandated to play distinct functions and responsibilities to guarantee a free, fair and transparent procurement process.

The complaints committee was appointed in September 2014.

According to Regulation 61 of the financial rules and regulations, the complaints committee is "the only structure or institution mandated to hear and deal with complaints from suppliers and any other interested party” about the actions of the EAC – more specifically, complaints that the procurement laws and policies have not been followed.

The appointment of the procurement review committee by the Secretary General, it is said, was not anchored on any EAC legal framework.

Mathuki said: "It was irregular and thus any action taken on the basis of the recommendations of this review committee is null and void. Any form of complaint about this particular procurement should have been referred to the Complaints Committee.”

"The Committee concludes that the appointment of the review committee by the Secretary General with full knowledge of the existing structures was irregular. Such appointment undermines the independence of procurement process and stifle functioning of the Community.”

Expired contract extended, legal opinion rejected Lawmakers also investigated whether the extension of the group life insurance contract to Liberty was in accordance with the law. Evidence submitted during investigation shows that while the process of procurement of the service provider had been concluded by June 30, 2016, there was no contract signed between the EAC and Britam, the best evaluated bidder. On August 2, 2016 the Secretary General convened an executive meeting during which it was resolved that the Group Life Insurance Contract with Liberty which expired on June 30, 2016 be extended. But according to Mathuki, extension of contract is a procurement function and not a managerial one. Mathuki said that according to EAC procurement  regulations, the meeting of the executive is not one of the institutions established and as such, the meeting of executive is "a strange institution to the procurement process and it does not have the mandate to extend a procurement contract.” Moreover, although it is said that the decision to extend the contract was made on August 2, 2016, on July 8, 2016, a letter was written to Liberty for contract extension. Likewise, the premium paid to the company was submitted on July 12, 2016. As reported, an opinion on the matter given by the principle legal adviser of the Community (CTC) on July 15, 2016, was ignored. According to Mathuki, since the renewal of contracts was a legal matter, the CTC’s opinion ought to be respected by all actors including the Secretary General. "The Committee observed that the whole process of extension of contract was irregular because the management did not obtain approvals from the procurement committee; it extended an expired contract, it ignored the procurement process which was complete and rejected the legal opinion from the CTC.”