Auditor General queries NHC’s Sh129m software tender

The Auditor-General has questioned the process used to procure a management software by the National Housing Corporation, saying it was not above board.

The software, Enterprise Resource Planning System, is used by companies to integrate all departments and functions across a company into a single computer system.

According to his latest report, Auditor-General Edward Ouko said NHC awarded the tender to set up the system for Sh129 million, in contravention of the Public Procurement and Disposal Act, which dictates that all procurement is done within the approved budget.

The 2012/2013 budget for the ERP system was Sh100 million. The report detailed the corporation’s financial dealings for the year ending June 2014.

Mr Ouko said NHC had in 2012 advertised for the supply, implementation and commissioning of the system, out of which eight firms responded.

Of the firms, only two of them — Twenty Third Century Systems and Attain Enterprise Solutions — qualified at the technical level, with their finance bids being Sh90.9 million and Sh127 million respectively.

The evaluation committee recommended the award to Twenty Third Century but the corporation’s tender committee subsequently cancelled and ordered for a re-tender, which was then advertised on May 16, 2013.


Out of the firms that responded, only two; Seven Seas Technology Group and Deloitte Consulting, qualified at the technical evaluation stage with their financial bids being Sh129 million and Sh220 million respectively.

“The tender committee awarded Seven Seas Technology Group. They later on entered into a formal contract signed on August 13, 2013, with the contract period being set at 12 months,’ said Mr Ouko.

In his assessment of the process, the Auditor-General said while awarding the tender, there was no gap analysis done on the existing ICT system to determine its weakness.

“It was, therefore, not possible to justify the procurement of the ERP system,” he said.

Mr Ouko further pointed out that the chairman of the evaluation committee was also a member of the tender team and there was no evidence that he disqualified himself from the deliberations to award a tender to Seven Seas.

He noted that there was no evidence to indicate how the consultants were appointed to the evaluation committee yet they were paid Sh596,298, which was avoidable given that NHC has qualified ICT personnel.

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