Treasury tightens scrutiny on State suppliers

The National Treasury is seeking to recruit suppliers of goods and services to a master database in an effort to increase transparency and reduce costs in procurement.

Treasury is looking for a consultant to develop a master item database for the e-Government Procurement (e-GP) system where the state will have visibility into the per-item spend analysis for each procuring entity.

The electronic GP system will be linked to iTax, Business Registration System, Integrated Financial Management Information System (IFMIS) and National Council for Persons with Disabilities for faster verification and reporting of corrupt transactions.

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“The National Treasury intends to purchase the services of a consulting firm to develop a master item database for the e-GP system,” the Treasury says in the notice inviting interested consultants to apply by April 21.

At the heart of the e-GP system is the master control where each element is properly labeled and organized with the appropriate attributes.

This standardization is what enables the e-GP system to analyze procurement effectively at the item level, highlight spending analysis, and thus promote cost-effective procurement.

The Treasury plans to roll out the electronic GP system in all public entities, in compliance with the Law of Designing and Prescribing an Effective Procurement Management System for the two levels of government to ensure transparent procurement and disposal of assets.

Kenya’s electronic GP system is designed around the United Nations Standard Code for Products and Services (UNSPSC) which is a global classification system for products and services.

The UNSPSC framework uses a multi-tiered classification system using the terms department, family, class, commodity, and business function.

The consultant will be required to review all elements contained in the UNSPSC and adapt their description to comply with the language and terminology relevant to public procurement in Kenya.

The duration of the contract will be four months and the consultant will be tasked with conducting a survey in all government economic sectors to identify commonly used items.

The Kenya Revenue Authority (KRA) law enforcement team has stepped up analysis of financial transactions of companies, especially those dealing with the national government and the provinces, to detect tax fraud by matching their payments and income declared to the authority.

The Authority notes that tax evasion by county and state suppliers is primarily through false invoices to inflate costs in an attempt to reduce fee obligations and the failure of county governments to provide withholding taxes to suppliers and employees.

Some government suppliers have also filed no returns even after earning taxable income.

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Operating an end-to-end electronic procurement system would be a departure from the current paperwork-intensive bidding system that has resulted in lost billions in taxes implied in state bids.

The e-GP system will be interoperable with other systems in both the public and private sector procurement stakeholders.

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