PUBLIC PROCUREMENT IN KENYA AND THE AVAILABLE DISPUTE RESOLUTION MECHANISMS

PUBLIC PROCUREMENT IN KENYA AND THE AVAILABLE DISPUTE RESOLUTION MECHANISMS

The evolution of the global economy coupled with the need for efficient value and supply chains has necessitated the establishment of systems that caters to and satisfy the needs of the supply chain. The systems by which acquisition by way of purchase, rental, lease, hire purchase, license, tenancy, franchise, or by any other contractual means of any type of works, assets, services or goods, including advisory, planning and processing in the supply chain system form what is commonly referred to as Procurement.^[1]

Procurement takes place in both the private and public sectors. The Private sector procurement is primarily governed by the policies and procedures of a private entity while Public sector procurement is subject to checks and balances in form of statutory provisions. The rigorous scrutiny in public procurement ensures public funds are not misappropriated under the guise of procuring goods and services for the public. Public procurement and asset disposal by State organs and public entities is guided by the values and principles envisaged in the Constitution of Kenya, 2010 and relevant legislations passed by the Parliament^[2]

Public procurement faced numerous challenges stemming from the ineffective statutory and regulatory framework governing the procurement process. These challenges included:

Political Manipulation
Conflicts of Interest
Uncontrolled Contract Variations
Overpricing of goods and services
Authorization of expenditure level was not structured
Lack of fair and transparent competition
Inappropriate use of procurement methods

These challenges that faced public procurement in Kenya necessitated the enactment of new legislation that would promote a progressive and transparent way of procuring goods and services by government entities and any other body involved in the public procurement sphere.

REFORMS IN PUBLIC PROCUREMENT

The Public Procurement and Disposal Act 2005, was enacted with a view to cure the inadequacies of the system in place, enhance value for money and bring renewed confidence in the public procurement regime. The 2005 Act and the subsequent Regulations there to were promulgated amidst opposition from those with entrenched interests in public procurement and who had benefited from the fluid state of affairs in the procurement sector. The law was therefore enacted due to external pressure rather than because the key players in the industry wanted the much-needed reforms.

With the promulgation of the Constitution of Kenya, 2010, there was need to align the 2005 Act with the provisions of the Constitution, which then led to further amendments of the Public Procurement and Asset Disposal Act, 2015. The Act established an independent Public Procurement Regulatory Authority as an oversight agency of Government to ensure that procuring entities complied with the law. The 2015 Act is now further cemented by the Public Procurement and Asset Disposal Act Regulations, 2020, which is the subsidiary legislation to the Act.

Despite the large-scale reforms in the way public procurement was carried out, disputes remained commonplace with many procuring entities being accused of illegal and unprocedural procurement practices by actual and prospective bidders. How then are disputes in Public Procurement resolved?

DISPUTE RESOLUTION IN PUBLIC PROCUREMENT

The Public Procurement Administrative Review Board established under Section 27 of the Public Procurement Act hears and determines tendering and asset disposal disputes.

The Primary way of resolving disputes in public procurement is via a Bid Protest system. A bid protest system accomplishes the oversight function by means of third-party monitoring. Actual and prospective bidders are given authority to challenge the actions of procurement officials before designated fora empowered to remedy violations of the procurement laws/regulations.

There are many reasons why a bidder may want to protest a decision of a procuring entity. Some of the common grounds are as follows:

Decision that is not supported by the record or that are factually incorrect, contradictory;
Evaluations that depart from the stated criteria;

Selections that treat bidders differently by overlooking the deficiencies of the successful bidder while finding the protestor’s proposal unacceptable for the same or similar deficiencies; Failure to properly evaluate experience;

Non-objective specifications/Terms of Reference (ToRs)
Evaluation of bids without adhering to the provision of the Act, e.g., introducing new criteria
Improper termination of procurement proceedings. etc.

A candidate or a tenderer, who claims to have suffered or to risk suffering, loss or damage due to the breach of a duty imposed on a procuring entity by the Public Procurement and Asset Disposal Act or the Regulations, may seek administrative review within fourteen days (14) of notification of award or date of occurrence of the alleged breach at any stage of the procurement process, or disposal process as in such manner as may be prescribed.^[3]

Who has locus to bring an action before the Public Procurement Administrative Review Board (PPARB)?

An action and/or request for review before the (Public Procurement Administrative Review Board) PPARB may be instituted by an aggrieved candidate or tenderer, the accounting officer of the Procuring Entity, the successful bidder and any other party as may be allowed by the Board.

Any action and/or request for review must be decided within Twenty-One (21) days^[4] and in deciding, the Board may do any of the following:

Annul anything the accounting officer of a Procuring Entity has done in the procurement proceedings, including annulling the procurement or disposal proceedings in their entirety;
Give directions to the accounting officer of a procuring entity with respect to anything to be done or redone in the procurement or disposal proceedings;
Substitute the decision of the accounting officer of a procuring entity in the procurement or disposal proceedings;
Order the payment of costs as between parties to the review in accordance with the scale as prescribed; and
Order termination of the procurement process and commencement of a new procurement process.

A person who is dissatisfied with the decision of the Board has a right to seek judicial review at the High Court within Fourteen Days (14) days, which application must be decided by the High Court within Forty-Five (45) days.^[5] The Act allows for a further appeal to the Court of Appeal within Seven (7) days in the event a Party is not satisfied with the decision of the High Court. In pursuit of the expeditious administration of justice, the Court of Appeal is allowed Forty-Five (45) days from the date of lodging the appeal, to hear and determine the Appeal. Failure to decide an Appeal within the prescribed timelines re-instates the decision of the Board which shall thus be binding on all parties.

The Statutory timelines provided by the Act are necessary to promote the expeditious disposal of procurement disputes. This is so because too much delay in the determination of these disputes may hinder provisions of critical goods and services.

CONCLUSION

Public Procurement Law in Kenya is a burgeoning and multi-faceted area of law that will only continue to experience significant growth, reform and development. The creation of robust and detailed legal and regulatory framework governing public procurement in Kenya will only facilitate this growth. Additionally, jurisprudence being developed by the Public Procurement Administrative Review Board sets a great stage for Kenya to be at the forefront of legal and regulatory framework in Africa in matters public procurement. This not only promotes transparency and good governance in procurement but also promotes the Principles of Public Finance under Article 201 of the Constitution of Kenya, 2010.

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