EXCLUSIVE: How EC’s Ugx 17b [US $4.5] WareHouse BID Triggered M7 to FIRE Top Leadership

By FRANKLIN DRAKU,

In Summary

  • Electoral Commission (EC) officials were fired on Tuesday amid on-going investigation into accusations of corruption. We look at the inside story of what transpired over the Shs17b warehouse deal.

The Electoral Commission (EC) has been in the spotlight on account that it blew up Shs17 billion in hiring a warehouse for storage of its election materials.

Documents seen by this newspaper indicate that the EC had initially planned to spend Shs6b to procure a warehouse and office space of up to 8,000 square metres on three acres. But due to backdoor manoeuvres, the cost shot up to Shs16.9b and the deal went to a company that had been implicated in forgery and had been eliminated at the preliminary stages of the procurement process.

In July 2018, EC received Shs6b for procurement of the warehouse. In November the same year, EC advertised in the press inviting bidders who would provide space of 9,000 square metres for storage of its materials.

Left to right: EC officials Stephen Tashobya,
Left to right: EC officials Stephen Tashobya, Sam Rwakoojo and Justice Simon Byabakama appear before Parliament’s Legal Affairs committee on January 28. PHOTO | DAVID LUBOWA

Documents and internal memos from EC show that after the advertisement, four companies, including Meera Investments, Henley Property Development, White Showman, and Brejo Uganda, bought the solicitation documents, but did not submitted a bid by close of the bidding.

After failing to attract a single bid during this process, EC relaxed the requirements and reduced the warehouse space from 9,000 to 8,000 square metres and also introduced a long government lease for the required land.

The Commission re-advertised the bids. Two bidders, Kenlloy Logistics and White Showman bought solicitation documents but again none submitted a bid by close of the bidding deadline because they failed to fulfil the required specifications.

Time was running out. Then EC wrote to Public Procurement and Disposal of Public Assets Authority (PPDA) seeking guidance on how to proceed with the procurement. The PPDA wrote back advising EC to proceed with the tendering under provisions of emergency procurement.

In March last year, EC’s procurement department drafted a solicitation document and submitted it to the Contracts Committee for approval. Upon approval, bids were issued to Ms Megha Industries, Grid Energy Systems, Jesani Constructions, Space Holdings and Mumbejja Rebecca & Marion (Industrial Steel Masters (U).

According to the documents seen by DailyNewsUG, while Megha Industries submitted late bids and was rejected, the rest of the companies that submitted in time did not fulfil the requirements and their bids were rejected.

The documents state that after failing to get a compliant company to provide the warehouse, EC further reduced the requirement from 8,000 to 2,600 square metres and in May 2019 shortlisted three companies; Ms Space Holdings, Sechi Enterprises and Fast Truck Enterprise with approval from the Contracts Committee.

However, only Sechi Enterprises and Space Holdings submitted bids at the end of the deadline, but none fulfilled the requirements. Space Holdings had 2,720 square metres and Sechi had no warehouse. Inside sources said the procurement officials kept downgrading the requirements.

REVEALED: Five senior EC officials shown the exit ahead of 2021 ...

Direct procurement
Having failed with open domestic bidding three times, the procurement department led by Mr Godfrey Wanyoto, sought to use request for quotation from potential bidders, a decision which was rejected by the Contracts Committee.

“In today’s contracts committee meeting that was held in the head of Human Resource management office, your submission for procurement of warehouse using request for quotation method under emergency situation was rejected…” part of the letter signed by Mr Abdul Kibesi, the secretary to the Contracts Committee, reads in part.
It was addressed to the procurement department.

In a memo, Mr Kibesi said EC had used open domestic bidding on two previous occasions without success. He also said the remaining time of the financial year was not sufficient for request for quotation and that the EC would lose the underutilised funds at the end of the financial year if it wasn’t spent.

“While acting in the best interest of the commission in ensuring that the commission acquires storage facilities from the appropriated funds, the committee resolved that you apply direct method of procurement by inviting one firm from the three to submit quotation,” the internal memo concluded.

Mr Wanyoto then invited Space Holdings under direct procurement method, but this was again opposed by the Contracts Committee.

“The selected firm had participated previously for the same transaction and was eliminated due to reasons highlighted in the evaluation report, please take note and advise on the choice of the selected firm, given the above scenario,” the chairperson of the contracts committee wrote.

In the previous evaluation report, Space Holdings had been accused of not having occupation permit, had only one gate, lacked proper ownership of the warehouse and neither could it provide the space of 8,000 square metre. It only had 2,720 square metres.

“Whereas Contracts Committee approved direct method of procurement, you were advised to pick on a firm to bid, as part of your responsibility. Contracts Committee never advised that you write to Space Holdings. Further as a technical officer, your role is to offer advice to Contracts Committee. Given this shortcoming listed herein, is it prudent to solicit this firm to bid again?” Mr James Niwamanya, the contracts committee chairperson questioned.

EC boss gets in
On May 31, 2019, Mr Niwamanya, refused to sign the contract for Space Holdings, prompting EC Secretary, Mr Sam Rwakoojo, to write to him explaining why there was no progress report on the procurement. Mr Rwakoojo said by failing to utilise the funds, EC would lose and that its budget would be reduced in the subsequent financial year. He also said the performance indicators would show EC as a very poor performer and that it would fail to procure the warehouse.

“The purpose of this note is to urge you to exercise utmost sense of responsibility and put EC’s interest first by handling this procurement as quickly as possible, keeping in mind that we have less than one month to complete the process,” Mr Rwakoojo wrote.

In reply, Mr Niwamanya pointed out other anomalies in the contract award process. He cited changing the specification from 8,000 square metres to 2,600 square metres, shortlisting of firms that did not have warehouses, Evaluation Committee producing two conflicting reports and Contract Committee taking a decision which was not unanimously agreed upon by the members as a result of different recommendations from the Evaluation committee.

War between members
Available documents point to internal rifts between members and the Contracts Committee chairperson. While the chairperson was opposed to awarding the contract to Space Holdings, the members supported the move and disowned all Niwamanya’s directives.

The members, Jotham Taremwa, Kibesi Abdul, Eric Sabiiti and Malakwang Opar, on June 10, 2019, wrote to the committee chairperson accusing him of taking a unilateral decision contrary to the agreed position. They said while all the members had agreed that the contract be awarded to Space Holdings, the chairperson disagreed and wrote a minority report.

In his minority report, Mr Niwamanya said Space Holdings had a bid of Shs16.9b while Sechi’s bid was Shs20.7b. He added that Sechi did not have a warehouse while Space Holdings had 2720 square metres, which were both below the required space of 8,000 square metres.

However, the other committee members would have none of the above arguments and disowned the minority report.
“We strongly dissociate ourselves with the said contents and humbly request you to provide to the members an explanation why you acted ultra-vires in respect of the above issues raised,” the members stated.

With the majority agreeing to award the contract to Space Holdings at Shs16.9b, the EC signed the paperwork.
Between June 5, 2019 and June 11, 2019, the EC concluded the procurement of the warehouse at an inflated cost of Shs16.9b, up from the initial Shs6b. It is not clear why the cost shot up, while the size of the space reduced.

Megha Industries files complaint
Between May 3, and May 23, 2019, Megha Industries and a whistleblower accused the EC of awarding a contract to a company that had been eliminated and irregular advertisement for procurement of the warehouse when the initial process was for both procurement of warehouse and offices.

Mr Uthman Segawa, the director for legal and investigations at PPDA, on June 17, 2019, wrote to the EC Secretary saying the whistleblower had alleged that the Commission deliberately reduced the size of space from 8,000 to 2,600 square metres to irregularly award the contract to a company that had forged documents.

“The authority instituted an investigation and in accordance with Section 8 (1) (a) of the PPDA Act 2003 directs you to halt the procurement process for the above procurement and submit the procurement action file to our office… not later than Tuesday June 18, 2019,” the PPDA directive reads.
However, by the time the PPDA wrote to EC, the contract between the Commission and Space Holdings had been signed.

Mr Benson Turamye, the PPDA Executive Director, could not explain how the issue was resolved or whether it was resolved. He, however, promised to avail the details of the result of the investigations.

DailyNewsUG was also unable to get a comment from Space Holdings management on the allegations against them and how they qualified for the contract despite the initial elimination from the bidding race.

IGG say…

The Inspectorate of Government (IG) on Tuesday confirmed receipt of a petition dated January 18 in which a whistleblower detailed cases of abuse and corruption at the national electoral body.

The IG spokesperson, Ms Munira Ali, confirmed investigation into corruption accusations brought against the EC officials. She, however, clarified that the Inspectorate didn’t have a hand in the sacking of the eight EC officials since the IGG investigations are on-going.

“We received the petition on the alleged corruption at EC and investigations were sanctioned but we haven’t made any recommendations..,” Ms Munira said.

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