Sh12bn tender row threatens to ground police work

Police operations across the country may grind to a halt mid this month due to ongoing intense wars over a Sh12.5 billion tender for the leasing of vehicles.

Since 2013, the government has been leasing vehicles for the National Police Service, a move it states has saved taxpayers’ money.

Mid this year, the Ministry of Interior and Co-ordination of National Government tendered for the leasing of 1,290 police vehicles, but the process has been stopped by the High Court after a protracted legal battle.

The tender was to lapse in April 2019, but it was extended to October 15, 2019. This means there is just over a week to resolve the issue.

Interestingly, despite the High Court order stopping the tendering, the ministry went ahead and advertised.

On September 30, High Court Judge John Mativo stopped the ministry from concluding the process for leasing of motor vehicles from local assemblers after a petition by CMC Motors Group Ltd.

But the process went on and ended on Friday, with sources indicating that the winning bidders may be notified Monday.

RIGHTS VIOLATION

In the application certified urgent, CMC Motors argued that Interior Principal Secretary Karanja Kibicho re-advertised the tender through restricted tendering before the expiry of the 14 days set in law.

The advertisement came after the Public Procurement Administrative Review Board dismissed a request by CMC Motors to review application.

Through lawyer Migos Ogamba, the company argued that the reasons for dismissal of their case were unreasonable, as the board failed to look into some matters it was bound to consider.

Mr Ogamba told Justice Mativo that the Mr Kibicho breached the company’s rights and legitimate expectations.

The court consequently suspended the decision and orders issued by the board for 14 days. He said the evaluation committee should not accept, evaluate or award the said tender.

The company said that the tender was terminated on the grounds that the costs quoted were higher than the market prices. CMC further said the board acted unreasonably.

The tender involves lots 1 to 8, divided into various vehicle models. Mr Ogamba said that the board failed to call to its attention that Lot 7 for heavy duty, utility passenger vehicle, and 4×4s, was not in phase II of the leasing programme, but was introduced in the new phase.

CONTENTIOUS ISSUES

It added that there was going to be a difference in the total leasing price.

The company said there was no proper actuarial price matrix that took into account all parameters of the lease programme, something the board was bound by the law to consider.

The parameters included motor vehicle specifications, insurance, driver training, service centres, vehicle replacements and out-of-contract prices.

CMC moved to court after the Public Procurement Administrative Review Board issued two conflicting rulings on the same matter and the Interior ministry disregarded one.

It is alleged that after the technical and financial stages, just as the tender was about to be awarded, the tendering committee introduced new recommendations and called for the cancellation of the entire process.

In its new recommendations, the committee stated that due to emerging security needs, there was a need to change vehicle specifications, and that the tender document did not factor in the local motor vehicle assemblies and manufacturing, and that the leasing programme needed to be anchored on the Big Four Agenda championed by President Uhuru Kenyatta.

By the time the tender was cancelled, four companies had qualified for the financial evaluation stage. These were Toyota Kenya, CMC Motors, Ecta Kenya and DT Dobie.

SKETCHY TERMINATION

During the hearing, the board headed by Ms Faith Waigwa noted that the ministry had irregularly introduced a fourth ground for dismissal: “governance issues.” The board dismissed the grounds advanced by the government as reasons of termination.

It noted that “emerging security needs” was not buttressed by any evidence that there was a new technological advancement in manufacturing of cars that needed to be specified in a new tender.

The board found that the procurement of locally assembled vehicles was no grounds for termination, but an aspect that a procuring entity ought to take into account during evaluation of tenders.

It further noted that the Big Four Agenda existed long before the tender was advertised. “The board finds the procuring entity failed to terminate the subject tender in accordance with Section 63 of the Act, which not only provides a procedure for termination, but grounds which may require real and tangible evidence to support the termination process.

Furthermore, such a termination process must adhere to the principles of fair administrative action outlined in the Article 47 (1) of the Constitution. It therefore expunged the recommendation to terminate the tendering process,” it noted.

The ruling was made on July 25, 2019. The tender committee then convened and, before it could assign the winners of the bid, Mr Kibicho ordered a market survey on the prevailing market prices of leasing vehicles.

MARKET PRICES

Consequently, lots 1, 2, 3 6 and 7 were not awarded because the winning bidders had quoted higher prices. CMC Motors and Ecta Motors challenged the decision to dismiss the PPRB decision.

The two companies submitted that by ordering a market survey to assess prevailing market prices, Mr Kibicho was in effect carrying out re-evaluation, which had been concluded and winners identified by the tender committee.

They further noted that the said market survey was conducted on two service providers who had participated in the tender but failed during the technical evaluation stage. These were Isuzu East Africa and Simba Corporation.

The ministry, in a rejoinder, stated that it was bound by law to use state resources in a prudent manner.

In its findings, the board said that the 2006 Procurement Act allowed an entity to conduct market surveys periodically. “The procuring entity did not include its other service providers, who are applicants, in the request to review during the first limb of the market survey, making the said limb subjective, rather than objective,” noted the board.

The board also noted that the new market survey ordered by the ministry did not amount to conducting new evaluation.

“The procuring entity cannot be faulted for establishing the prevailing market process under which to procure items for the benefit of saving taxpayers money,” noted the board.

It therefore upheld the decision to cancel the leasing of motor vehicles in lots 1, 2, 3, 6, 7, and 8. CMC then moved to the High Court. The matter is set to come up for mention on October 8.