Bill seeks to restrict major public tenders

Mega government contracts will be restricted to a few companies if MPs pass into law a Bill to overhaul existing procurement rules.

The Public Procurement and Asset Disposal Bill 2014, which aims at speeding up public procurement, contains wide ranging provisions, including penalties of between Sh4 million and Sh10 million for State officers and bidders who flout laid down procedures for selfish gain.

However, if passed the Bill will take Kenya back to the era of single sourcing and restricted tendering when there were complaints of corruption.

The proposed law, which is ready for submission in Parliament, classifies multi-billion-shilling government contracts as “complex and specialised” and limits them to competition among a select number of firms that would be pre-qualified.

RESTRICTED TENDERING

The contracts will include all lucrative infrastructure projects such as roads, energy, water, major equipment, software licences and major consultancies, which have been subject of intense rivalry and lobbying.

“An accounting officer of a procuring entity may use restricted tendering if competition for contract, because of the complex or specialised nature of goods, works or services, is restricted to pre-qualified tenderers,” says the Bill.

Restricted tendering, it states, can be applied if “the time and cost required to examine and evaluate a large number of tenders would be disproportionate to the value of the goods, works or services to be procured”.

The Bill gives discretion to procurement officers to decide to purchase goods and services through the restricted method if suppliers of the items in question are few and well known in the market.

Last week, Treasury Cabinet Secretary Henry Rotich explained that the Bill was meant to increase efficiency in procurement and eliminate obstacles, including conflict with other laws, that had impeded purchase of goods and services in government.

The Bill says its objective is “to maximise economy, efficiency and value for money and to establish procedures for procurement and assets disposal”.

IMPEDIMENT

If such a law had been in existence, multi-billion-shilling tenders such as the Sh327 billion standard gauge railway, Sh53 billion Nairobi-Mombasa oil pipeline, Sh14.9 billion communications and surveillance tender awarded to Safaricom and the National Social Security Fund’s Hazina Towers project that is estimated to cost Sh7.1 billion would have been sourced through the restricted process.

The proposed law comes when the government is fighting wars, both in courts and at the Public Procurement Review Board, involving major tenders, some of which have been suspended.

Mr Rotich, Senate Majority Leader Kindiki Kithure and Mandera Senator Billow Kerrow have argued that implementation of the Jubilee administration’s flagship projects was being delayed by the current Public Procurement and Disposal Act.

Mr Rotich said “flimsy” appeals by individuals and companies aggrieved after losing tenders had increased.

The proposed law sanctions government-to-government procurement for goods, works and services as agreed upon between Kenya and a foreign country. The government used the method when it entered into a deal with Canada for the purchase of the biometric voter registration kits for the last General Election, a decision that put it in the spotlight.