How to tell my supervisor I won't use the data that a colleague prepared?
You have come across an important lesson in research: if the person or organization providing your data is not responsible somehow for that data being correct, it won't be. Collecting and preprocessing new data is an iterative process with lots of restarts as you discover that common techniques need to be adapted to the particular dataset. If someone just hands you data they didn't have to test or validate anywhere, what you get is their first failed result. If they touch the data to do anything to it at all, they almost certainly did so incorrectly; if there is a sign, they probably created sign errors; if they did any sorting, they probably did not sort the labels and values consistently, etc. 

As for how to proceed, there's another unfortunate lesson here for anyone in a mentored research position: you should generally do whatever your supervisor wants. I don't mean behave unethically if they push you to. But to change your focus to doing the best with what you have rather than letting the perfect be the enemy of the "at-least-you-did-something". Honestly your supervisor probably has a better grasp of the big picture. I.e. getting a result out to show the funding agency you were productive, getting a notch on your CV, and such outcomes, are the critical ones. While a wonderful research result that drives the science world vertically is probably out of reach already. You can however adjust how you present the data in your paper, e.g., focus on the methods not the results, or put some mixed validation results and note not all of them worked properly, caution that your data may be flawed as one possible cause, and so forth.