Public Procurement in Kenya

Session Objectives

To obtain an understanding of the following:

-The role of procurement in government

-The coverage of the public procurement legislation -The main requirements of the public procurement legislation

To enable you to meet the needs of your customers, the public entities

Procurement
the acquisition by purchase, rental, hire purchase, license, tenancy, franchise, or by any other contractual means of any types of works, assets, services or goods including livestock or any combination

The public procurement and disposal Act 2005,Republic of Kenya ( Section 3,page 54)

The Six Objectives for Good Procurement

Procure the RIGHT ITEM Procure the RIGHT QUALITY goods, works or services from a reliable supplier. In the RIGHT QUANTITY ensuring cost effectiveness and; Delivery at the RIGHT TIME and; Delivered to the RIGHT PLACE Paying the RIGHT PRICE whilst achieving the lowest possible total cost

Public Procurement in Kenya

The value of public procurement is estimated at around 9-10% of the GDP Wastage arising from the previous poor management of procurement resources is estimated at nearly 30%

Legislation
The Public Procurement and Disposal Act 2005 The public procurement and Disposal Regulations 2006

Effective January 2007

Get from www.ppoa.go.ke

Covered
Procurement Contract management Supply chain management

- of

Goods, works, services Disposal of stores & equipment - by any means

Not Covered
Employee services Acquisition of stores or equipment from another PE Services provided by government or another GoK department

Not fully covered

Defence & security items can use restricted procedure

Donor Funded Projects

Negotiated grants or loans or donor funds may be subjected to their conditions These will not be less onerous than PPDA

Institutional Arrangements

Diagram to be projected from folder

Public Procuring Entities

As set out in Gazette Notice No 719 of 24th January,2007, for the purpose of the threshold matrix in the first schedule of the public procurement and disposal regulations,2006, public procuring entities are hereby classified as follows : CLASS A: State corporations

Ministries

Public Procuring Entities Contd

CLASS B:
City councils (NRB,MSA,KSM) Commissions Co-operative societies Universities Colleges Hospitals Semi Autonomous
Government Agencies

Judiciary

Parliament Districts Provincial

Procuring Entities Structure

Diagram to be projected from file

Public Procuring Entities Contd

CLASS C
councils) Schools District hospitals Health Centers, dispensaries Polytechnics Constituency Dev Fund Voluntary Organizations/Institutions

Other Local Authorities (Municipal, county, town

Procuring Entities Structure

Committees
Tender Committee (standing) Procurement Committee (standing) Tender Opening Committee (specific) Evaluation Committee (specific)

- Financial evaluation committee -Technical evaluation committee

Inspection & Acceptance committee (specific) Disposal Committee

Tender Committee Large Contracts

Where procurement under consideration is >Ksh 50M at least two observers must be invited to attend meetings (in addition to dept observers)
- At least 1 of these must be from private sector or relevant discipline

Procurement Committee
Approves award of contract (RFQ/Direct only) Class A & B Class C <Ksh 500,000 - <Ksh 200,000 (direct) < Ksh 30,000 (class A) - <Ksh 100,000 (RFQ) <Ksh 10,000 (class B) - > Ksh 5,000

Tender & Contact Process

Diagram to be projected from file

Procurement Procedures in Kenya

- Normal Open Tendering
- Main alternatives

Request for quotations Low value procurement

Procurement Procedures in Kenya

- others Framework contract Electronic procurement Request for proposals Restricted tendering Direct procurement Design competition Concession contracts

Prescribed Timescales

Inspection & Acceptance Committee Duties

Checks quantity Checks defined standards have been met Checks timelines of delivery Ensures manuals/documentation received Issues interim or completion certificates

Termination

May happen at any time before contract

- Reasons to each tenderer within 14days - Written report to PPOA

Communication
In writing for open or restricted tendering or RFP Confirmed in writing for other procedures Writing includes electronic

Inappropriate Influence
No attempt to influence allowed Punishable by fine or imprisonment

Corruption & fraud

Forbidden!

Includes Collusion, conflicts of interest

Publication
Notices of contract award published by PPOA - > 5m Ksh

Amendments to Contract
Variations only if Price based on CPI or CBK inflation rate Max 10% quantity variation for goods or services Max 15% quantity variation for works Period of contract not altered Approved by tender committee in writting

Overdue Payments
PE pays interest on overdue amounts At commercial bank rates

- Unless contract provides otherwise