Public procurement in Kenya plays a critical role in the country’s economic development by ensuring that government resources are allocated efficiently, transparently, and with integrity. With billions of shillings flowing through public tenders each year, understanding the legal framework governing procurement is essential for businesses and individuals seeking to engage with the government.
This blog provides an overview of Kenya’s public procurement system, the laws that guide it, and the key steps for businesses to successfully navigate the procurement process.
1. Overview of Public Procurement in Kenya
Public procurement refers to the process by which public entities—such as government ministries, parastatals, and county governments—acquire goods, services, and works from the private sector. These purchases range from small office supplies to large-scale infrastructure projects.
To ensure that public resources are used effectively and that the procurement process is fair and competitive, Kenya has developed a legal framework that regulates public procurement. The guiding legislation is the Public Procurement and Asset Disposal Act, 2015, which outlines the procedures, responsibilities, and obligations for both procuring entities and bidders.
2. Key Principles of Public Procurement
Kenya’s public procurement system is built on several core principles that ensure the process is fair, transparent, and accountable:
- Transparency: The procurement process must be open and clear, with information about tenders and contracts being accessible to the public. This is aimed at preventing corruption and ensuring fair competition.
- Fairness and Equity: All qualified bidders must be given an equal opportunity to compete for public contracts. Discrimination based on ethnicity, nationality, or gender is prohibited.
- Efficiency and Value for Money: Public procurement should aim to achieve the best value for public funds by ensuring that goods and services are delivered at the right price, quality, and time.
- Competition: The process should encourage competitive bidding to promote innovation, drive prices down, and improve the quality of goods and services provided to the government.
- Integrity and Accountability: Public officials involved in procurement must adhere to ethical standards and avoid conflicts of interest, ensuring that the process is not compromised.
3. The Public Procurement and Asset Disposal Act, 2015
The Public Procurement and Asset Disposal Act, 2015 is the primary law governing public procurement in Kenya. It establishes the regulatory framework for the procurement process, providing guidelines for how public tenders should be conducted, evaluated, and awarded.
Key provisions of the Act include:
- Procurement Methods: The Act outlines various procurement methods, including open tendering, restricted tendering, direct procurement, and request for proposals (RFP). Open tendering is the most preferred method and involves public advertisement of tenders, allowing maximum competition.
- Preference and Reservation Schemes: The Act promotes inclusivity by setting aside 30% of public procurement opportunities for youth, women, and persons with disabilities (PWDs). This initiative aims to empower marginalized groups and ensure they participate in the economic development of the country.
- Thresholds for Procurement Methods: The Act sets thresholds that guide which procurement method should be used based on the value of the goods, services, or works being procured. This ensures that smaller procurements are handled quickly, while larger, more complex tenders are subject to rigorous scrutiny.
4. The Public Procurement Regulatory Authority (PPRA)
The Public Procurement Regulatory Authority (PPRA) is the body responsible for regulating and overseeing public procurement in Kenya. Established under the Public Procurement and Asset Disposal Act, the PPRA ensures compliance with procurement laws, conducts audits, and provides guidelines for best practices in public procurement.
The PPRA also has a mandate to:
- Promote fair competition in the public procurement process.
- Conduct investigations into procurement malpractices and take action against those involved.
- Monitor and evaluate the performance of public procurement systems.
Businesses seeking to engage in public procurement should familiarize themselves with the guidelines issued by the PPRA to ensure compliance.
5. How to Participate in Public Procurement
For businesses looking to secure government contracts, participating in public procurement requires a clear understanding of the steps involved and the legal requirements. Here’s a simplified guide to navigating the procurement process:
1. Registration with the PPRA: To participate in public procurement, businesses must be registered with the PPRA. This involves submitting required documentation, including proof of legal status, tax compliance, and relevant certifications.
2. Search for Tenders: Public tenders are advertised in local newspapers, government websites, and the Kenya Tenders Portal. Businesses should regularly check these platforms for tender opportunities relevant to their industry.
3. Submission of Bids: Once a suitable tender is identified, businesses must prepare and submit their bids in accordance with the tender specifications. Bids must be submitted within the specified timelines and include all required documentation.
4. Evaluation of Bids: The procuring entity will evaluate all bids based on criteria such as price, quality, experience, and technical capability. Bidders who meet these criteria and offer the best value for money are shortlisted for further consideration.
5. Award of Contract: The tender is awarded to the successful bidder, and a contract is signed. Unsuccessful bidders are informed of the outcome and may seek clarification or lodge complaints if they believe the process was unfair.
6. Handling Disputes: The Role of the Public Procurement Administrative Review Board (PPARB)
In cases where businesses feel that the procurement process was not conducted fairly, they have the right to file complaints with the Public Procurement Administrative Review Board (PPARB). The PPARB is an independent body that handles disputes arising from public procurement, ensuring that decisions made by procuring entities comply with the law.
If a bidder is dissatisfied with the outcome of a tender or believes there were irregularities in the process, they can lodge a formal complaint with the PPARB, which will investigate the matter and issue a ruling.
7. Common Challenges in Public Procurement
While public procurement in Kenya provides businesses with lucrative opportunities, it also comes with challenges that businesses must be prepared to navigate:
- Corruption and Lack of Transparency: Despite the legal framework in place, corruption remains a major challenge in public procurement. Businesses may encounter unethical practices such as bribery, favoritism, or lack of transparency in the tendering process.
- Lengthy Processes: The procurement process can be lengthy and bureaucratic, leading to delays in project implementation. Businesses must be patient and prepared for possible delays in payment or award decisions.
- Capacity and Compliance: Small and medium-sized enterprises (SMEs) may face challenges in meeting the technical, financial, and legal requirements for public procurement. It’s essential for businesses to build their capacity and ensure compliance with all regulations.
8. Benefits of Public Procurement for Businesses
Despite the challenges, participating in public procurement offers significant benefits for businesses:
- Revenue Generation: Government contracts can provide a stable source of revenue, particularly for businesses involved in infrastructure, construction, and service provision.
- Growth and Expansion: Winning government tenders can help businesses expand their operations, enhance their credibility, and attract more clients from the private sector.
- Inclusivity and Empowerment: The 30% reservation for youth, women, and persons with disabilities allows businesses from marginalized groups to access economic opportunities and contribute to national development.
Conclusion
Public procurement in Kenya presents a significant opportunity for businesses to engage with the government and contribute to the country’s economic development. However, navigating the legal framework requires a deep understanding of the Public Procurement and Asset Disposal Act, 2015, and compliance with the regulations set forth by the PPRA.
By adhering to the principles of transparency, fairness, and competition, businesses can position themselves to succeed in the competitive public procurement landscape while contributing to the effective and ethical use of public resources.