Point in Time
Act No: No. 33 of 2015
Act Title: PUBLIC PROCUREMENT AND ASSET DISPOSAL
[ Date of commencement: 7th January, 2016. ]
[ Date of assent: 18th December, 2015. ]
Arrangement of Sections
PART I – PRELIMINARY
1.
Short title

This Act may be cited as the Public Procurement and Asset Disposal Act, 2015.

2.
Interpretation
(1)

In this Act, unless the context otherwise requires—

"accounting officer" has the meaning assigned to it under section 2 of the Public Finance Management Act, 2012 (No. 18 of 2012);

"appeal" means a request for administrative review or complaint filed with the Appeals Review Board pursuant to section 167 of this Act;

"assets" means movable and immovable property, tangible and intangible, including immovable property, stores, equipment, land, buildings, animals, inventory, stock, natural resources like wildlife, intellectual rights vested in the state or proprietary rights;

"Authority" means the Public Procurement Regulatory Authority established under section 8 of this Act;

"Board" means the Public Procurement Regulatory Board established under section 10 of this Act;

"Cabinet Secretary" means the Cabinet Secretary for the time being responsible for matters relating to finance;

"candidate" means a person who has obtained the tender documents from a public entity pursuant to an invitation notice by a procuring entity;

"citizen contractor" means a person or a firm wholly owned and controlled by persons who are citizens of Kenya;

"common-user items" means goods, works or services that are usable by procuring entities across the board irrespective of type or category, and the items include office equipment, furniture, motor vehicles and stationery;

"complex and specialized contracts" means contracts that include procurement where the terms and conditions of an agreement are different from standard commercial terms and conditions;

"consultancy services" means services of predominantly an intellectual, technical or advisory nature, and includes services offered by all professionals;

"contract period" means the period between contract signing and the end of the defects liability period;

"contract administration" means management of terms of procurement or asset disposal contracts made with contractors or suppliers after tender award by a procuring entity, for the purpose of assuring compliance with obligations such as timely delivery, quality and quantity inspection, acceptance, payment, claims, dispute resolution and completion, among other terms;

"contractor" means a person who enters into a procurement contract with a procuring entity, and includes the main contractor;

"corruption" has the meaning assigned to it under section 2 of the Anti-Corruption and Economic Crimes Act 2003 (No. 3 of 2003);

"design competition" means a procurement procedure for obtaining competitive tenders for services which are creative in nature and which require that part of the services be carried as part of the tender to facilitate evaluation of the tenders and such services may include architecture, landscaping, engineering, urban design projects, urban and regional planning, fine arts, interior design, marketing, advertising and graphic designs;

"Director-General" means the Director-General of the Authority provided for under section 15 of this Act;

"disadvantaged group" means persons denied by mainstream society access to resources and tools that are useful for their survival in a way that disadvantages them or individuals who have been subjected to prejudice or cultural bias because of their identities as members of groups or categories of persons without regard to their individual qualities, and includes enterprises in which a majority of the members or shareholders are youth, women, persons with disability or categories as shall be prescribed;

"disposal" means the divestiture of public assets, including intellectual and proprietary rights and goodwill and other rights of a procuring entity by any means including sale, rental, lease, franchise, auction or any combination however classified;

"electronic reverse auction" means an online real-time purchasing technique utilized by the procuring entity to select the successful submission, which involves the presentation by tenderers, suppliers or contractors of successively lowered bids during a scheduled period of time and the automatic evaluation of bids;

"e-procurement" means the process of procurement using electronic medium such as the internet or other information and communication technologies;

"framework agreement" means a pact between a procuring entity and a selected supplier (or suppliers) or contractor (or contractors) identified for a definite term to supply goods works or service whose quantities and delivery schedules are not definable or determinable at the beginning;

"framework contract" means a pact between a procuring entity and a selected supplier (or suppliers) or contractor (or contractors) identified for a definite term to supply goods works or service whose quantities and deliveries are not definable or determinable at the beginning, with a commitment to order a minimum quantity of the required goods, works, or services;

"fraudulent practice" includes a misrepresentation of fact in order to influence a procurement or disposal process or the exercise of a contract to the detriment of the procuring entity or the tenderer or the contractor, and includes collusive practices amongst tenderers prior to or after tender submission designed to establish tender prices at artificial non-competitive levels and to deprive the procuring entity of the benefits of free and open competition;

"financial year" has the meaning assigned to it under Article 260 of the Constitution;

"fiscal agency" means a person or an organization, or trust company, that acts on behalf of the Government of Kenya in performing various financial duties, including assistance in the arrangement for issuance of international sovereign bonds, redemption of bonds or coupons, handle tax issues, replace lost or damaged securities;

"goods" includes raw materials, products, equipment, commodities in solid, liquid or gaseous form, electricity and services that are incidental to the supply of the goods, works and services;

"loans" has the meaning assigned to it under Article 260 of the Constitution;

"locally produced product or service" means goods and services that are manufactured in Kenya by firms that are registered and undertaking their business in Kenya;

"obstruction” means acts intended to materially impede access to required information in exercising a duty under this Act;

"person" has meaning assigned to it in Article 260 of the Constitution and includes sole proprietorship;

"person with disability" means a person with disability who has attained the age of eighteen years and includes a company, association or body of persons, corporate or unincorporated in which at least seventy percent of the shareholders, members or persons and a majority of the directors are persons with disability;

"public procurement" means procurement by procuring entities using public funds;

"prescribed" means prescribed by Regulations under this Act;

"preference" means the right or opportunity to select a tenderer from an identified target group that is considered more desirable than another;

"pre-qualification" means the procedure to identify and shortlist tenderers that are qualified, prior to invitation for tenders;

"pre-qualification procedure" means a procedure by which candidates are invited to demonstrate their qualifications prior to, and as a condition for, being invited to tender or submit proposals;

"Principal Secretary" means the Principal Secretary for the time being responsible for matters relating to finance;

"procurement" means the acquisition by purchase, rental, lease, hire purchase, license, tenancy, franchise, or by any other contractual means of any type of works, assets, services or goods including livestock or any combination and includes advisory, planning and processing in the supply chain system;

"procuring agent" means an organization which has been registered by the Authority, and competitively engaged by a procuring entity on its behalf, or an organization established under this Act, to carry out procurement or asset disposal activities;

"procurement contract" means an agreement concluded between the procuring entity and a contractor (or contractors) resulting from a tendering proceeding;

"procuring entity" means a public entity making a procurement or asset disposal to which this Act applies;

"procurement professional" means a person who has professional qualifications in procurement or supply chain management from a recognised institution and is a member of the Kenya Institute of Supplies Management established under the Supplies Practitioners Management Act, 2007 (No. 20 of 2007);

"procurement function" means a division within a procuring entity staffed with procurement professionals who are officially concerned with managing the procurement and asset disposal process and reports directly to the head of procuring entity functionally and administratively;

"professional" means a person who has professional qualifications in a specialized field and who is engaged in the practice of a skill or trade, having undertaken the relevant formal academic and professional training including undertaking practical learning in the form of apprenticeship or tutelage under the guidance of a suitably qualified and experienced person in the field of training or tutelage;

“professional body” means a body representing members of a profession, which is regulated by statute, code of conduct or rules as may be amended from time to time;

“public entity” includes—

(a)

the national government or any organ or department of the national government;

(b)

a county government or any organ or department of a county government;

(c)

the Judiciary and the courts;

(d)

the Commissions established under the Constitution;

(e)

the Independent Offices established under the Constitution;

(f)

a state corporation within the meaning of the State Corporations Act (Cap. 446);

(g)

the Central Bank of Kenya established under the Constitution;

(h)

a public school within the meaning of the Basic Education Act, 2013 (No. 14 of 2013);

(i)

a public university within the meaning of the Universities Act, 2012 (No. 42 of 2012);

(j)

a city or urban area established under the Urban Areas and Cities Act, 2011 (No. 13 of 2011);

(k)

a company owned by a public entity;

(l)

a county service delivery coordination unit under the National Government Co-ordination Act, 2013 (No. 1 of 2013);

(m)

a constituency established under the Constitution;

(n)

a Kenyan diplomatic mission under the state department responsible for foreign affairs;

(o)

a pension fund for a public entity;

(p)

a body that uses public assets in any form of contractual undertaking including public private partnership;

(q)

a body in which the national or county government has controlling interest;

(r)

a college or other educational institution maintained or assisted out of public funds;

(s)

an entity prescribed as a public entity for the purpose of this paragraph; or

(t)

any other entity or a prescribed class of public entities or particular public entities that uses public money for purposes of procurement or any other entity as declared under sections 4 and 5 of the Public Finance Management Act, 2012 (No. 18 of 2012);

“public money" includes monetary resources appropriated to procuring entities through the budgetary process, as well as extra budgetary funds, including aid, grants and loans, put at the disposal of procuring entities by donors;

"public private partnership" has the meaning assigned to it under section 2 of the Public Private Partnership Act, 2013 (No. 15 of 2013);

"publicise” has the meaning assigned to it under section 2 of the Public Finance Management Act, 2012 (No. 18 of 2012);

"registration of suppliers" means the process of identifying and obtaining a list of prospective providers of a specified category of goods, works or services by a procuring entity for a specified period of time but not exceeding more than two years, and maintaining them for the purpose of inviting them on rotational basis for subsequent tendering proceedings such as request for quotations or restricted tendering, that may arise during the period of listing;

"regulations" means regulations made under this Act;

"Review Board" means the Public Procurement Administrative Review Board established under section 27 of this Act;

“reservations” means exclusive preference to procure goods, works, and services set aside to a defined target group of tenderers within a specified threshold or region;

“services” means any objects of procurement or disposal other than works and goods and includes professional, consultancy services, technical services, non-professional and commercial types of services as well as goods and works which are incidental to but not exceeding the value of those services;

"standard” means characteristics or set of characteristics for an item which for reasons of quality level or compatibility with other products is accepted by the manufacturers and users of that item as a required characteristic for all items of that type;

“supplier” means a person who enters into a procurement contract with a procuring entity to supply goods, works or services;

“supply chain management” means the design, planning, execution control and monitoring of supply chain activities which includes procurement, purchasing, logistics, transportation, warehousing, storage, stock control, contract management and distribution, with an objective of creating value to meet the objectives of the procuring entity;

“tender” means an offer in writing by a candidate to supply goods, services or works at a price; or to acquire or dispose stores, equipment or other assets at a price, pursuant to an invitation to tender, request for quotation or proposal by a procuring entity;

“tenderer” means a person who submitted a tender pursuant to an invitation by a public entity;

"tender box" means a lockable secure physical or virtual box where tenders are submitted including by electronic means so as to be opened only after the tender submission deadline;

"tender security" means a guarantee required from tenderers by the procuring entity and provided to the procuring entity to secure the fulfillment of any obligation in the tender process and includes such arrangements as bank or insurance guarantees, surety bonds, standby letters of credit, cheques for which a bank is primarily liable, cash deposits, promissory notes and bills of exchange tender securing declaration, or other guarantees from institutions as may be prescribed;

"urgent need" means the need for goods, works or services in circumstances where there is an imminent or actual threat to public health, welfare, safety, or of damage to property, such that engaging in tendering proceedings or other procurement methods would not be practicable;

"user department" means the unit of a procuring entity that requisitions the goods, works or services being procured;

“works” means a combination of goods and services for the construction, repair, renovation, extension, alteration, dismantling or demolition of buildings, roads or other structures and includes—

(a)

the designing, building, installation, testing, commissioning and setting up of equipment and plant;

(b)

site preparation; and

(c)

other incidental services;

“woman” means a person of the female gender who has attained the age of eighteen years and includes a company, association or body of persons, corporate or unincorporated in which at least seventy percent of the shareholders, members or persons and a majority of its directors are of the female gender;

"writing" means printing, photography, facsimile, lithography, typewriting, electronic media and any other means of representing or reproducing words in a visible form; and

“youth” means a person who has attained the age of eighteen years and has not attained the age of thirty-five years and includes a company, association or body of persons, corporate or unincorporated in which at least seventy percent of shareholders are persons who have attained the age of eighteen years and have not attained the age of thirty-five years.

3.
Guiding principles

Public procurement and asset disposal by State organs and public entities shall be guided by the following values and principles of the Constitution and relevant legislation—

(a)

the national values and principles provided for under Article 10;

(b)

the equality and freedom from discrimination provided for under Article 27;

(c)

affirmative action programmes provided for under Articles 55 and 56;

(d)

principles of integrity under the Leadership and Integrity Act, 2012 (No. 19 of 2012);

(e)

the principles of public finance under Article 201;

(f)

the values and principles of public service as provided for under Article 232;

(g)

principles governing the procurement profession, international norms;

(h)

maximisation of value for money;

(i)

promotion of local industry, sustainable development and protection of the environment; and

(j)

promotion of citizen contractors.

4.
Application of the Act
(1)

This Act applies to all State organs and public entities with respect to—

(a)

procurement planning;

(b)

procurement processing;

(c)

inventory and asset management;

(d)

disposal of assets; and

(e)

contract management.

(2)

For avoidance of doubt, the following are not procurements or asset disposals with respect to which this Act applies—

(a)

the retaining of the services of an individual for a limited term if, in providing those services, the individual works primarily as though he or she were an employee, but this shall not apply to persons who are under a contract of service;

(b)

the transfer of assets being disposed off by one state organ or public entity to another state organ or public entity without financial consideration;

(c)

acquiring of services provided by government or government department;

(d)

acquisition and sale of shares or securities, fiscal agency by a public entity, investments such as shares purchased by cooperative societies, state corporations or other public entities;

(e)

procurement and disposal of assets under Public Private Partnership Act, 2013; and

(f)

procurement and disposal of assets under bilateral or multilateral agreements between the Government of Kenya and any other foreign government, agency, entity or multilateral agency unless as otherwise prescribed in the Regulations.

(3)

For greater certainty, all public procurement are procurements with respect to the application of this Act.

5.
Conflicts with other Acts
(1)

This Act shall prevail in case of any inconsistency between this Act and any other legislation or government notices or circulars, in matters relating to procurement and asset disposal except in cases where procurement of professional services is governed by an Act of Parliament applicable for such services.

(2)

A provision of an Act that provides for a person or body to approve any work or expenditure shall not be construed as giving that person or body any power with respect to the entire procurement proceedings.

6.
Conflicts with international agreements
(1)

Subject to the Constitution, where any provision of this Act conflicts with any obligations of the Republic of Kenya arising from a treaty, agreement or other convention ratified by Kenya and to which Kenya is party, the terms of the treaty or agreement shall prevail.

(2)

Where the Republic of Kenya is required under the terms of any treaty or convention to which she is party, to contribute from her resources, in any form, to any procurement activities within Kenya, either in part or wholly, jointly or separately, procurement through such contributions shall be—

(a)

in discrete activities where possible; and

(b)

subject to the applicable provisions of this Act.

(3)

The disposal of any or all of the goods or public assets accruing to Kenya as a result of procurement activities to which subsections (1) apply shall be subject to the provisions of this Act.

(4)

Where a procurement to which subsection (1) applies favours an external beneficiary—

(a)

the procurement through contributions made by Kenya, shall be undertaken in Kenya through contractors registered in Kenya; and

(b)

all relevant insurances shall be placed with companies registered in Kenya and goods shall be transported in carriages registered in Kenya.

PART II— BODIES INVOLVED IN THE REGULATION OF PUBLIC PROCUREMENT AND ASSET DISPOSAL
7.
Role National Treasury on public procurement and assets disposal
(1)

The National Treasury established under section 11 of the Public Finance Management Act, 2012, shall be responsible for public procurement and asset disposal policy formulation.

(2)

In the performance of its role under subsection (1), the National Treasury shall—

(a)

formulate, evaluate, promote and research on national and county public procurement and asset disposal policy and standards;

(b)

develop policy guidelines for the efficient procurement management and disposal system for national executive;

(c)

design and prescribe an efficient procurement management system for the national and county governments to ensure transparent procurement and asset disposal as contemplated by Article 227 of the Constitution:

Provided that the National Treasury shall prescribe through Regulations a system under this paragraph which operates, respects and promotes the distinctiveness of the national and county levels of government;

(d)

provide technical assistance on procurement and assist in the implementation and operation of the public procurement and asset disposal system;

(e)

manage and administer the scheme of service of the procurement and supply chain management services cadre for the national government;

(f)

carry out general research, develop and promote electronic procurement strategies and policies in both the national and county governments including state corporations and other government agencies;

(g)

carry out review of procurement and supply chain management system to assist procuring entities;

(h)

develop and review policy on procurement of common user items in the public sector both at national and county government levels;

(i)

develop policy on the administration of preference and reservations scheme and registration of target groups under preference and reservations scheme as prescribed;

(j)

facilitate affirmative action for disadvantaged groups in accordance with the Constitution and advance their participation in the procurement process;

(k)

develop and review policies and guidelines on the management of assets;

(l)

issue guidelines to public entities with respect to procurement matters; and

(m)

perform such other functions as prescribed by this Act or any other legislation.

(3)

The National Treasury may prescribe an institutional framework to provide for the procurement, administration and management of common user items for the national government.

B– Public Procurement Regulatory Authority
8.
The Public Procurement Regulatory Authority
(1)

There is established an authority to be known as the Public Procurement Regulatory Authority which shall be a body corporate with perpetual succession and a common seal and shall in its corporate name, be capable of—

(a)

suing and being sued;

(b)

acquiring, safeguarding, holding, charging and disposing of moveable and immoveable property; and

(c)

doing or performing all such other things or acts for the proper discharge of its functions under this Act, which may be lawfully done by a body corporate.

(3)

The Authority may for the purposes of ensuring access to its services in accordance with Article 6 of the Constitution establish such offices in regional locations as it may deem necessary for its operations.

9.
Functions of Authority

The functions of the Authority shall be to—

(a)

monitor, assess and review the public procurement and asset disposal system to ensure that they respect the national values and other provisions of the Constitution, including Article 227 and make recommendations for improvements;

(b)

monitor the public procurement system and report on the overall functioning of it and present to the Cabinet Secretary and the county executive member for finance in each county, such other reports and recommendations for improvements;

(c)

enforce any standards developed under this Act;

(d)

monitor classified procurement information, including that of specific items of security organs and make recommendations to the Cabinet Secretary;

(e)

monitor the implementation of the preference and reservation schemes by procuring entities;

(f)

prepare, issue and publicise standard public procurement and asset disposal documents and formats to be used by public entities and other stakeholders;

(g)

provide advice and technical support upon request;

(h)

to investigate and act on complaints received on procurement and asset disposal proceedings from procuring entities, tenderers, contractors or the general public that are not subject of administrative review;

(i)

research on the public procurement and asset disposal system and any developments arising from the same;

(j)

advise the Cabinet Secretary on the setting of standards including international public procurement and asset disposal standards;

(k)

develop and manage the State portal on procurement and asset disposal and ensure that it is available and easily accessible;

(l)

monitor and evaluate the preference and reservations provided for under this Act and provide quarterly public reports;

(m)

create a central repository or database that includes—

(i) complaints made on procuring entities;
(ii) a record of those prohibited from participating in tenders or those debarred;
(iii) market prices of goods, services and works;
(iv) benchmarked prices;
(v) State organs and public entities that are non-compliant with procurement laws;
(vi) statistics related to public procurement and asset disposal;
(vii) price comparisons for goods, services and works; and
(viii) any information related to procurement that may be necessary for the public;
(n)

inform, as applicable, the Cabinet Secretary, Parliament, the relevant County Executive member for finance, the relevant County Assembly or Auditor-General on issues of non-compliance with procurement laws once the relevant State organ or public entity ignores the written directives of the Authority, including material breaches of the measures established under this Act;

(o)

generally report to Parliament and the relevant county assembly;

(p)

develop a code of ethics to guide procuring entities and winning bidders when undertaking public procurement and disposal with State organs and public entities;

(q)

in undertaking its functions, cooperate with state and non-state actors with a view to obtaining recommendations on how public procurement and disposal can be improved;

(r)

ensure the procurement entities implement the preference and reservations and provide data to the Authority disaggregated to indicate the number of disadvantaged groups that have benefitted;

(s)

perform such other functions and duties as are provided for under this Act and any other relevant law.

(2)

If in the course of monitoring in accordance with section 9(1)(a), the Authority is of the opinion that civil or criminal proceedings ought to be preferred against a State Organ, public entity, state officer or public officer, the Authority shall refer the matter to the relevant authorities.

10.
Public Procurement Regulatory Board
(1)

The management of the Authority shall vest in a board to be known as the Public Procurement Regulatory Board which shall consist of—

(a)

a chairperson nominated by the Cabinet Secretary and appointed by the President;

(b)

four members who shall be appointed by the Cabinet Secretary after nomination, through a fair process, by—

(i) the Law Society of Kenya;
(ii) the Institute of Certified Public Accountants of Kenya;
(iii) the Kenya Institute of Supplies Management;
(iv) the Association of Professional Societies in East Africa, provided that the appointed nominee is not a member of a professional body under subparagraphs (i) to (iii);
(c)

two persons nominated by the respective organizations representing—

(i) the youth; and
(ii) persons with disabilities;
(d)

the Cabinet Secretary or his or her representative; and

(e)

the Attorney-General or his or her representative.

(2)

In the appointment of the chairperson and members under this section, the appointing authority shall ensure regional balance and gender parity.

11.
Qualifications of members of the Board
(1)

A person shall not be appointed as a chairperson of the Board unless that person—

(a)

possesses a university degree in a relevant field from a university recognised in Kenya;

(b)

has knowledge and experience of not less than ten years in any of the following fields—

(i) procurement and supply chain management;
(ii) finance;
(iii) law;
(iv) accounting; or
(v) economics; and
(c)

meets the requirements of Chapter Six of the Constitution.

(2)

A person shall be eligible for appointment as a member of the Board if that person—

(a)

holds a university degree from a recognized university in Kenya;

(b)

has knowledge and relevant experience of not less than five years in a management position; and

(c)

meets the requirements of Chapter Six of the Constitution.

12.
Functions of the Board
(1)

The Board shall—

(a)

ensure the proper and effective performance of the functions of the Authority;

(b)

approve and ratify the policies of the Authority;

(c)

oversee the management, control and administration of the assets of the Authority in a manner and for purposes that promote the object and purpose of the Authority;

(d)

receive any gifts, grants, donations or endowments made to the Authority;

(e)

determine the provisions to be made for capital and recurrent expenditure, and for the reserves of the Authority;

(f)

open bank accounts for the funds of the Authority in accordance with the Public Finance Management Act, 2012 (No. 18 of 2012);

(g)

subject to the approval of the Cabinet Secretary, invest any of the Authority funds not immediately required for the purposes of this Act, as it may determine; and

(h)

co-operate with other organizations undertaking functions similar to its own, whether within or outside Kenya as it may consider appropriate and in furtherance of the functions of the Authority;

(2)

Subject to this Act, the Board may, by resolution either generally or in any particular case, delegate to any committee of the Board or to any member, officer, employee or agent of the Authority, the exercise of any of the powers, or the performance of any of the functions or duties of the Board under this Act.

(3)

Members of the Board shall be paid allowances determined by the Cabinet Secretary, in consultation with the Salaries and Remuneration Commission.

(4)

Where the involvement of a Board member in a decision of the Board is likely to result in conflict of interest, the Board member shall disclose such potential conflict of interest and the Board member shall not take part in such decisions.

13.
Tenure of office

A member of the Board of the Authority including the chairperson shall hold office for a term of three years but shall be eligible for re-appointment for a further term of three years.

14.
Procedures of the Board
(1)

The business and affairs of the Board shall be conducted in accordance with the First Schedule.

(2)

Except as provided in the First Schedule, the Board may regulate its own procedure.

(3)

Five members of the Board shall constitute a quorum for the transaction of any business of the Board.

(4)

The Board may invite a technical person to attend any of its meetings and to participate in its deliberations, except where the subject is of classified nature and such an invitee shall not have a vote in any decision of the Board.

15.
Director-General of the Authority
(1)

There shall be a Director-General of the Public Procurement Regulatory Authority appointed by the Cabinet Secretary on the advise of the Board.

(2)

A person shall not be appointed as a Director-General under this section unless that person—

(a)

is a citizen of Kenya;

(b)

has a degree in a related field of study from a university recognised in Kenya, and can demonstrate a logical progression in acquiring the academic qualifications;

(c)

has at least ten years' experience in senior management position in procurement and supply chain management; and

(d)

meets the requirements of Chapter Six of the Constitution.

(3)

The Director-General shall be the Chief Executive Officer of the Authority and the Secretary to the Board.

16.
Term of office of Director-General

The Director-General appointed under section 15(1) shall hold office for a term of three years but shall be eligible for re-appointment for a further term of three years.

17.
Functions of the Director-General
(1)

The Director-General shall be responsible for the day to day management of the affairs of the Authority and shall be answerable to the Board in the performance of his functions under this Act.

(2)

The Director-General shall perform any other functions determined by the Board or as provided for under this Act

18.
Restrictions on activities of Director-General

During the period of his or her appointment, the Director-General shall not—

(a)

be employed in any gainful employment work or business; or

(b)

hold any other public office.

19.
Terms and conditions of service of Director-General and staff
(1)

The terms and conditions of service of the Director-General, and the staff of the Authority shall be determined by the Board in consultation with the Cabinet Secretary, the Public Service Commission and the Salaries and Remuneration Commission.

(2)

The schemes of service of the Authority shall be determined by the Board in consultation with the Cabinet Secretary and the Public Service Commission.

20.
Vacancy of office

The office of the Director-General shall become vacant if the holder—

(a)

dies; or

(b)

become incapacitated on medical grounds; or

(c)

resigns by a written notice of three months addressed to the Board; or

(d)

upon expiry of his or her term; or

(e)

ceases to hold office under section 21 of this Act.

21.
Removal of Director-General
(1)

The appointment of the Director-General may be terminated only in accordance with this section.

(2)

The Board may terminate a person's appointment as the Director-General if that person—

(a)

violates the Constitution or any other written legislation; or

(b)

is incompetent; or

(c)

is of unsound mind; or

(d)

is convicted of a criminal offence and sentenced to a term of imprisonment exceeding six months or a fine exceeding one million Kenya shillings; or

(e)

contravenes terms and conditions of service; or

(f)

is adjudged bankrupt.

(3)

Where the question of the removal of the Director-General under subsection (2) arises, the Board shall—

(a)

inform the Director-General in writing of the reasons for the intended removal; and

(b)

give the Director-General the opportunity to be heard in accordance with the principles of fair administrative action provided for under Article 47 of the Constitution.

22.
Acting Director-General

The Board may designate a member of the staff of the Authority to act as the Director-General during the illness or absence of the Director-General or during a vacancy in the office for a period not exceeding three months within which time the Public Service Commission will have reconstituted the Recruitment Panel to recruit another Director-General.

23.
Staff of the Authority

The Board may, upon such terms and conditions of service as it may determine, employ management staff of the Authority as may be necessary for the proper performance of its functions taking into account the need for ethnic and regional balance and gender parity.

24.
Financial arrangements
(1)

The financial year of the Authority shall be the period of twelve months ending on the 30th June in each year or any other day prescribed by national legislation.

(2)

At least five months before the commencement of each financial year, the Board shall cause estimates of the revenue and expenditures of the Authority for that year to be prepared and submitted to the Cabinet Secretary for approval.

(3)

The estimates of budget shall make provision for all the estimated revenues and expenditures of the Authority for the financial year and, in particular, shall provide for—

(a)

the estimates of revenues accruing to the Authority;

(b)

the payment of salaries, allowances and other charges in respect of the staff of the Authority;

(c)

the payment of pensions, gratuities and other charges in respect of former staff of the Authority;

(d)

the proper maintenance of buildings and grounds of the Authority;

(e)

the maintenance, repair and replacement of the equipment and other property of the Authority; and

(f)

the payment of allowances and expenses of the Board; and

(g)

capital expenditure to be undertaken by the Authority.

(4)

The Authority shall make provision for the renewal of depreciating assets and the payment of pensions and other retirement benefits.

(5)

The funds of the Authority shall consist of—

(a)

money appropriated by Parliament for the purpose of running the Authority;

(b)

donations or graft received by the Authority for its activities;

(c)

revenue or fees collected for services rendered by the Authority; and

(d)

capacity building levy of such percentage of the procurements contract price by public entities as may be prescribed by the Cabinet Secretary.

25.
Audit

The Authority shall be audited by the office of the Auditor-General in accordance with Articles 226(3) and 229 of the Constitution and the Public Audit Act, 2003 (No. 12 of 2003);

26.
Annual reports
(1)

For each financial year, the Board shall cause an annual report to be prepared.

(2)

The Board shall submit to the Cabinet Secretary the quarterly reports within thirty days after the end of the quarter and the annual report within three months after the end of the year to which the report relates.

(3)

The reports shall contain, in respect of the period to which they relate—

(a)

a description of the activities of the Authority;

(b)

a report on how the public procurement and disposal systems are working and those that are subject of controversy or litigation;

(c)

a report on the overall functioning of the public procurement system;

(d)

a report on matters under Article 227(2) of the Constitution; and

(e)

a report on the compliance with this Act by each county government.

(4)

In addition to what is required under subsection (3), each annual report shall include the financial statements of the Authority for the year to which the report relates.

(5)

The Cabinet Secretary shall, within thirty days after receiving a report, transmit it to Parliament and the relevant county assembly.

(6)

The Board shall publish and publicize the draft report within two weeks after the expiry of seven (7) days upon submission to the Cabinet Secretary.

C – Public Procurement Administrative Review Board
27.
Establishment of the Public Procurement Administrative Review Board
(1)

There shall be a central independent procurement appeals review board to be known as the Public Procurement Administrative Review Board as an unincorporated Board.

(2)

The Review Board shall ensure reasonable access to its services in all parts of the Republic, as far as it is appropriate to do so.

28.
Functions and powers of the Review Board
(1)

The functions of the Review Board shall be—

(a)

reviewing, hearing and determining tendering and asset disposal disputes; and

(b)

to perform any other function conferred to the Review Board by this Act, Regulations or any other written law.

(2)

In performance of its functions under subsection (1)(a) of this section, the Review Board shall have powers to develop rules and procedures to be gazetted by the Cabinet Secretary.

(3)

The Authority shall provide secretariat and administrative services to the Review Board.

29.
Composition of the Review Board
(1)

The Review Board shall comprise of the following 15 members who shall be appointed by the Cabinet Secretary taking into account regional balance and gender parity—

(a)

a chairperson whose qualifications and experience shall be as that of a Judge of the High Court; and

(b)

fourteen other members whose qualifications and experience shall be as prescribed in the regulations.

(2)

A person appointed as a member under subsection (1) shall be nominated by the following professional bodies from amongst their members as follows—

(a)

three persons nominated by the Law Society of Kenya;

(b)

one person nominated by the Chartered Institute of Arbitrators, Kenya Chapter;

(c)

three persons nominated by the Kenya Institute of Supplies Management;

(d)

three persons nominated by the Institute of Certified Public Accountants of Kenya; and

(e)

four persons nominated by the Association of Professional Societies in East Africa, provided that the appointed nominees are not members of professional bodies mentioned under subparagraphs (i) to (iv).

(3)

The procedure for nominating the persons mention under subsection (2) shall be as prescribed.

30.
Qualifications of members of the Review Board
(1)

A person shall not be appointed as a member of the Review Board under section 29 unless that person—

(a)

possesses a university degree from a university recognised in Kenya;

(b)

has knowledge and experience of not less than seven years in the relevant field;

(c)

is a professional of good standing in his or her respective professional body; and

(d)

meets the requirements of Chapter Six of the Constitution.

(2)

The Chairperson appointed under this Act shall be a person who qualifies to be a judge of the High Court and shall meet the requirements of Chapter Six of the Constitution.

31.
Tenure of office
(1)

The Chairperson and the members of the Review Board shall hold office for a term of three years and shall be eligible for a further term of three years.

(2)

For continuity of the Review Board's functions and responsibilities, the appointment of the Review Board Members shall be on a staggered period of six months.

(3)

The provisions set out in the Second Schedule shall have effect in relation to the conduct of business and affairs of the Review Board.

32.
Terms and conditions of service of the Review Board members
(1)

The terms and conditions of service of the Review Board shall be determined by the Cabinet Secretary and the Salaries and Remuneration Commission.

(2)

The members of the Review Board shall serve on a part time basis.

PART Ill — COUNTY GOVERNMENT RESPONSIBILITIES WITH RESPECT TO PUBLIC PROCUREMENT AND ASSET DISPOSAL
33.
Roles and Responsibilities of the County Government
(1)

A County Treasury shall be the organ responsible for the implementation of public procurement and asset disposal policy in the county.

(2)

Without prejudice to the general provisions of sub-section (1), the County Treasury shall establish a procurement function which shall—

(a)

implement public procurement and asset disposal procedures;

(b)

coordinate administration of procurement and asset disposal contracts;

(c)

coordinate consultations with county stakeholders of the public procurement and asset disposal system in liaison with the National Treasury and the Authority;

(d)

advise the accounting officers of county government entities on public procurement and asset disposal matters;

(e)

co-ordinate county government monitoring and evaluation of the supply chain function of county government entities including ensuring compliance;

(f)

promote preference and reservations schemes for small and micro enterprises and other disadvantaged groups, citizen contractors, women, youth, persons with disabilities, minorities and marginalized groups in public procurement at the county;

(g)

promote preference and reservation schemes for residents of the county to ensure a minimum of twenty percent in public procurement at the county;

(h)

administer the scheme of service for county government procurement and supply chain management officers and capacity building;

(3)

The County Treasury may prescribe an institutional framework to provide for the procurement, administration and management of common user items for the county government.

PART IV – POWERS TO ENSURE COMPLIANCE
34.
Powers to ensure compliance

A public entity shall provide the National Treasury or the Authority with such information relating to procurement and asset disposal as may be required in writing.

35.
Investigations
(1)

The Authority, may undertake investigations, at any reasonable time, by among other things examining the records and accounts of the procuring entity and contractor, supplier or consultant relating to the procurement or disposal proceeding or contract with respect to a procurement or disposal with respect to a State organ or public entity for the purpose of determining whether there has been a breach of this Act or the Regulations made thereunder.

(2)

An investigation under sub-section (1) may be initiated by the Authority or on request in writing by a public institution or any other person.

(3)

Investigation shall be conducted by an investigator appointed for the purpose by the Authority.

36.
Powers of investigators
(1)

For the purpose of carrying out an investigation of procurement or asset disposal proceedings an investigator has the following powers—

(a)

with prior notification to the procuring entity, the investigator shall have access to all relevant premises, books, records, returns, reports and other documents of the procuring entity or a person who participated in the procurement or asset disposal proceedings, including electronic documents;

(b)

the investigator may remove or make copies of any documents the investigator has access to under paragraph (a);

(c)

where an investigator removes a document from the premises, the investigator shall certify a copy of the document to be left with the procuring entity; and

(d)

the investigator may require any of the following to provide explanations, information and assistance—

(i) an employee or officer of the procuring entity; or
(ii) an employee or officer of a person who participated in the procurement or asset disposal proceedings.
(2)

In addition to the powers under subsection (1), an investigator shall have such other powers as may be prescribed by Regulations.

(3)

The powers of an investigator are subject to such conditions and limitations as may be prescribed by regulations.

37.
Report of investigation

After completing his or her investigation, an investigator shall prepare and submit a report to the Authority.

38.
Order by the Director-General
(1)

If, after considering the report of an investigator, the Director-General is satisfied that there has been a breach of this Act, the Regulations or any directions of the Authority, the Director-General may, by order, do any one or more of the following—

(a)

direct the procuring entity to take such actions as are necessary to rectify the contravention;

(b)

terminate the procurement or asset disposal proceedings;

(c)

prepare and submit a summary of the investigator's findings and recommendations to the relevant authorities for action; or

(d)

require the procuring entity to transfer procuring responsibilities of the subject procurement to another procuring entity.

(2)

Before making an order under subsection (1), the Director-General shall give the following persons an opportunity to make representations—

(a)

the procuring entity; and

(b)

any other person whose legal rights the Director-General believes may be adversely affected by the order.

39.
Request for a Judicial review

The procuring entity and any other person who was entitled to be given an opportunity to make representations under section 38 (2) may request for Judicial Review against an order of the Board to the High Court within fourteen days after the order is made.

40.
No investigation if issue before Review Board
(1)

No investigation shall be commenced or continued under this Part, and no order shall be made under this Part, in relation to an issue that the Review Board is reviewing or has reviewed under the relevant provisions of this Act.

(2)

Subsection (1) ceases to apply if, after the Review Board has completed its review, information comes to the attention of the Board that was not brought before the Review Board in the course of its review.

41.
Debarment
(1)

The Board shall debar a person from participating in procurement or asset disposal proceedings on the ground that the person—

(a)

has committed an offence under this Act;

(b)

has committed an offence relating to procurement under any other Act or Law of Kenya or any other jurisdiction;

(c)

has breached a contract for a procurement by a public entity including poor performance;

(d)

has, in procurement or asset disposal proceedings, given false information about his or her qualifications;

(e)

has refused to enter into a written contract as required under section 135 of this Act;

(f)

has breached a code of ethics issued by the Authority pursuant to section 181 of this Act or the code of ethics of the relevant profession regulated by an Act of Parliament;

(g)

has defaulted on his or her tax obligations;

(h)

is guilty of corrupt or fraudulent practices; or

(i)

is guilty of a serious violation of fair employment laws and practices.

(2)

Without limiting the generality of subsection (1) the Board may debar a person from participating in any procurement process if that person—

(a)

has breached the requirements of the tender securing declaration form in the tender documents; or

(b)

has not performed according to professionally regulated procedures.

(3)

The Authority, may also debar a person from participating in procurement or asset disposal proceedings—

(a)

on the recommendation of a law enforcement organ with an investigative mandate;

(b)

on grounds prescribed by the Authority in Regulations.

(4)

A debarment under this section shall be for a specified period of time of not less than three years.

(5)

The procedure for debarment shall be prescribed by Regulations.

42.
Judicial Review

A party to the department may seek Judicial Review from the decision of the Authority to the High Court within fourteen days after the decision is made.

43.
Inspections, Assessments and Reviews relating to contracts, procurement and asset disposal proceedings
(1)

The Authority, or anyone authorised by the Authority, may inspect, assess, review or audit at any reasonable time, the records and accounts of the procuring entity and contractor relating to the procurement or disposal proceeding or contract and the procuring entity and contractor or tenderer shall co-operate with and assist whoever does such an inspection.

(2)

The Authority shall conduct procurement audits during the tender preparation, contract audit in the course of execution of an awarded tender; and performance audit after the completion of the contract in respect of any procurement or asset disposal as may be required.

(3)

The inspector shall have access to all relevant books, records, returns, reports and other documents of the procuring entity or a person who participated in the procurement or asset disposal proceedings, including electronic documents..

(4)

The inspector may remove or make copies of any documents he or she has access to.

(5)

Where an inspector removes a document from the promises, the inspector shall certify a copy of the document to be left with the procuring entity;

(6)

The inspector may require any of the following to provide explanations, information and assistance—

(a)

an employee or officer of the procuring entity; or

(b)

an employee or a person who participated in the procurement or asset disposal proceedings.

(7)

Subject to prescribed conditions and limitations, an inspector shall have additional powers as may be prescribed.

(8)

Where contraventions are discovered in the course of an inspection, the Authority may direct the procuring entity to take such actions as are necessary to rectify the contravention.

PART V — INTERNAL ORGANISATION OF PROCURING ENTITIES
44.
Responsibilities of the accounting officer
(1)

An accounting officer of a public entity shall be primarily responsible for ensuring that the public entity complies with the Act.

(2)

In the performance of the responsibility under subsection (1), an accounting officer shall—

(a)

ensure that procurements of goods, works and services of the public entity are within approved budget of that entity;

(b)

constitute all procurement and asset disposal committees within a procuring entity in accordance with the Act;

(c)

ensure procurement plans are prepared in conformity with the medium term fiscal framework and fiscal policy objectives and, subject to subsection (3), submit them to the National Treasury;

(d)

ensure proper documentation of procurement proceedings and safe custody of all procurement records in accordance with the Act;

(e)

ensure compliance with sections 68, 147, 148 and 149 of the Public Finance Management Act, 2012 (No. 18 of 2012);

(f)

approve and sign all contracts of the procuring entity;

(g)

ensure the procurement and asset disposal process of the public entity shall comply with this Act;

(h)

ensure that the procurement processes are handled by different professional offices in respect of procurements, initiation, processing and receipt of goods, works and services;

(i)

submit to the Authority the part in its procurement plan demonstrating application of preference and reservations schemes in relation to the procurement budget within sixty days after commencement of the financial year; and

(j)

ensure compliance with any other responsibilities assigned by this Act or any other Act of Parliament or as may be prescribed in Regulations.

(3)

The procurement plans prepared by the national security organs shall be exempted from submission to the National Treasury.

(4)

An accounting officer involved in a procurement transaction on exploitation of natural resources shall comply with provisions of Article 71 of the Constitution and any other written law.

45.
Corporate decisions and segregation of responsibilities
(1)

For the purpose of ensuring that the accounting officer's decisions are made in a systematic and structured way, an accounting officer shall establish systems and procedures to facilitate decision making for procurement and asset disposal.

(2)

The procedures required under subsection (1), shall be consistent with this Act and the Regulations.

(3)

All procurement processes shall be—

(a)

within the approved budget of the procuring entity and shall be planned by the procuring entity concerned through an annual procurement plan;

(b)

undertaken by a procuring entity as per the threshold matrix prescribed; and

(c)

undertaken in strict adherence to Article 227 of the Constitution.

(4)

All asset disposal processes shall be handled by different persons in respect of identification, consolidation, preparation of a disposal plan, pricing and the disposal itself.

(5)

For the avoidance of doubt, all public officers or State officers involved in procurement or asset disposal processes shall bear responsibility for their actions and omissions.

46.
Evaluation Committee
(1)

An Accounting officer shall ensure that an ad hoc evaluation committee is established in accordance with this Act and Regulations made thereunder and from within the members of staff, with the relevant expertise.

(2)

In establishing the ad hoc evaluation committee referred to in subsection (1) above, the procuring entity that is a State Department or a County Department, shall do so in consultation with the Cabinet Secretary or the County Executive Committee member responsible for that entity, as the case may be.

(3)

Despite subsection (1), where technical expertise is required from outside the organisation, such expertise may be obtained from other procuring entities or procured to join the committee, on recommendation, in writing, by the head of the procurement function, and the committee shall be appointed by the accounting officer, in writing.

(4)

An evaluation committee established under subsection (1), shall—

(a)

deal with the technical and financial aspects of a procurement as well as the negotiation of the process including evaluation of bids, proposals for prequalification, registration lists, Expression of Interest and any other roles assigned to it;

(b)

consist of between three and five members appointed on a rotational basis comprising heads of user department and two other departments or their representatives and where necessary, procured consultants or professionals, who shall advise on the evaluation of the tender documents and give a recommendation on the same to the committee within a reasonable time;

(c)

have as its secretary, the person in charge of the procurement function;

(d)

complete the procurement process for which it was appointed and no new committee shall be appointed on the same issue unless the one handling the issue has been procedurally disbanded;

(e)

adopt a process that shall ensure the evaluation process utilized adheres to Articles 201(d) and 227 (1) of the Constitution.

(5)

For greater certainty a procuring entity shall where a member of the ad hoc evaluation committee contravenes any provisions of this Act, institute disciplinary measures in accordance with the procuring entity's disciplinary measures and the provisions of this Act.

(6)

Where a public entity lacks capacity to comply with this Act an accounting officer shall seek assistance from the National Treasury.

(7)

Subject to this Act, the evaluation committee may invite external technical experts who are not employees of the organisation to assist in matters that need specific technical expertise.

(8)

Notwithstanding the provisions in this section, the Cabinet Secretary may prescribe other procedures for evaluating low value procurements below specified thresholds.

47.
Procurement function
(1)

A procurement function shall be handled by procurement professionals whose qualifications are recognized in Kenya.

(2)

The head of the procurement function shall among other functions under this Act, be responsible for rendering procurement professional advice to the accounting officer.

(3)

The Cabinet Secretary shall make regulations for the better carrying out of this section in respect to low value procurement.

48.
Inspection and acceptance committee
(1)

An accounting officer of a procuring entity may establish an ad hoc committee known as the inspection and acceptance committee.

(2)

The inspection and acceptance committee shall be composed of a chairman and at least two other members appointed by the accounting officer or the head of the procuring entity on the recommendation of the procuring unit.

(3)

The inspection and acceptance committee shall immediately after the delivery of the goods, works or services—

(a)

inspect and where necessary ,test the goods received;

(b)

inspect and review the goods ,works or services in order to ensure compliance with the terms and specifications of the contract; and

(c)

accept or reject, on behalf of the procuring entity, the delivered goods, works or services.

(4)

The inspection and acceptance committee shall—

(a)

ensure that the correct quantity of the goods is received;

(b)

ensure that the goods, works or services meet the technical standards defined in the contract;

(c)

ensure that the goods, works or services have been delivered or completed on time ,or that any delay has been noted;

(d)

ensure that all required manuals or documentation has been received; and

(e)

issue interim or completion certificates or goods received notes, as appropriate and in accordance with the contract.

49.
Sector-specific procuring and disposal agencies

A procuring entity or procuring entities with common interest may establish a procuring agency at national or county level for the purpose of procurement and distribution of sector-specific goods, works and services on behalf of procuring entities within the respective sector and shall be in accordance with this Act and the regulations made thereunder.

50.
Consortium buying
(1)

A procuring entity or procuring entities with common interest may enter into consortium buying for the purpose of procuring jointly in order to benefit from economies of scale.

(2)

Any procurement or disposal undertaken pursuant to subsections (1) of this section shall be subject to this Act.

51.
Procuring agents or asset disposal agents
(1)

A procuring entity may procure and appoint a procuring or asset disposal agent, as per this Act, including on a competitive basis to carry out such procurement or asset disposal on its behalf as per the terms of the contract.

(2)

A procuring entity may not appoint a procuring or asset disposal agent unless that procuring entity —

(a)

demonstrates lack of internal capacity;

(b)

provides evidence of inability to establish a procurement and disposal unit; or

(c)

demonstrates the inability to use the services of other State organs or public entities.

(3)

The appointment of a procuring or asset disposal agent under subsection (2) shall be done only from amongst a list of agents registered and licensed by the Authority.

(4)

A procuring entity shall, within fourteen days after the appointment of the agent, publicise the following details on its website-

(a)

Name and address of the agent;

(b)

value of the contract;

(c)

items and value of items to be procured or disposed by the agent;

(d)

duration of the contract; and

(e)

method of procuring the agent.

(5)

A state organ or public entity shall not appoint more than one agent for the same transaction.

(6)

A state organ or public entity shall give preferential treatment to the local agents before seeking the services of an international procurement agent.

(7)

For the preference for local agents, all the work shall be handled by agents of same region in question, and where an international agent has been procured, all functions that will be sublet and can be performed by citizens shall be sublet to persons who are citizens.

(8)

A Procuring or disposal agent shall comply with the provisions of this Act.

52.
Transfer of procuring responsibility to another public entity or procuring agent
(1)

The Authority shall have power to transfer the procuring responsibility of a procuring entity to another procuring entity or procuring agent in the event of delay or in such other circumstances as may be prescribed.

(2)

Subject to the approval of the governing body of the organ or entity, where applicable or upon recommendation of the Authority, an accounting officer shall make arrangements to enable another procuring entity to carry out the procurement or part of the procurement, on behalf of a procuring entity, in accordance with this Act.

(3)

A procuring entity may use the register list of another State organ or public entity whenever the procuring entity's list does not suffice.

(4)

The procuring entity shall obtain the whole list of relevant category from the State organ or entity, and together with its own relevant list, subject the list to this Act.

PART VI — GENERAL PROCUREMENT AND ASSET DISPOSAL PRINCIPLES
53.
Procurement and asset disposal planning
(1)

All procurement by State organs and public entities are subject to the rules and principles of this Act.

(2)

An accounting officer shall prepare an annual procurement plan which is realistic in a format set out in the Regulations within the approved budget prior to commencement of each financial year as part of the annual budget preparation process.

(3)

Any public officer who knowingly recommends to the accounting officer excessive procurement of items beyond a reasonable consumption of the procuring entity commits an offence under this Act.

(4)

All asset disposals shall be planned by the accounting officer concerned through annual asset disposal plan in a format set out in the Regulations.

(5)

A procurement and asset disposal planning shall be based on indicative or approved budgets which shall be integrated with applicable budget processes and in the case of a State Department or County Department, such plans shall be approved by the Cabinet Secretary or the County Executive Committee member responsible for that entity.

(6)

All procurement and asset disposal planning shall reserve a minimum of thirty per cent of the budgetary allocations for enterprises owned by women, youth, persons with disabilities and other disadvantaged groups.

(7)

Multi-year procurement plans may be prepared in a format set out in the Regulations and shall be consistent with the medium term budgetary expenditure framework for projects or contracts that go beyond one year.

(8)

Accounting officer shall not commence any procurement proceeding until satisfied that sufficient funds to meet the obligations of the resulting contract are reflected in its approved budget estimates.

(9)

An accounting officer who knowingly commences any procurement process without ascertaining whether the good, work or service is budgeted for, commits an offence under this Act.

(10)

For greater certainty, the procurement and disposal plans approved under subsection (5) shall include choice of procurement and disposal methods and certain percentages referred to under subsection (6).

(11)

Any state or public officer who fails to prepare procurement and disposal plans shall be subject to internal disciplinary action.

54.
Procurement pricing and requirement not to split of contracts
(1)

No procuring entity may structure procurement as two or more procurements for the purpose of avoiding the use of a procurement procedure except where prescribed.

(2)

Standard goods, services and works with known market prices shall be procured at the prevailing market price.

(3)

The Authority shall issue a quarterly market price index as reference guide to assist accounting officers make informed price decisions.

(4)

Public officers involved in transactions in which standard goods, services and works are procured at unreasonably inflated prices shall, in addition to any other sanctions prescribed in this Act or the Regulations made thereunder, be required to pay the procuring entity for the loss resulting from their actions.

56.
Use of list of another state organ or public entity
(1)

To identify qualified persons, a State organ or public entity may seek, in writing, to use another State organ's, public entity's or regulated professional body's registration list of all registered persons in the category,

provided that the list is valid and developed through a competitive process in accordance with the relevant provisions of this Act or, in the case of regulated professional bodies, developed through a process in accordance with relevant provisions of the legislation regulating the particular profession.

(2)

The State organ or public entity shall then subject the list, together with its own, where applicable, to the procedures in this Act.

57.
List of registered suppliers
(1)

The head of the procurement function of a procuring entity shall maintain and update lists of registered suppliers, contractors and consultants in the categories of goods, works or services according to its procurement needs.

(2)

Submission of names shall be continuous and the registration list shall be updated periodically as prescribed in Regulations and in accordance with this Act.

58.
Standard procurement and asset disposal documents
(1)

An accounting officer of a procuring entity shall use standard procurement and asset disposal documents issued by the Authority in all procurement and asset disposal proceedings.

(2)

The tender documents used by a procuring entity under subsection (1) shall contain sufficient information to allow fairness, equitability, transparency, cost-effectiveness and competition among those who may wish to submit their applications.

59.
Limitation on contracts with state and public officers
(1)

A State Organ or public entity shall not enter into a contract for a procurement with—

(a)

a public officer or state officer or a member of a committee or Board of that State organ or public entity; or

(b)

an officer of that public entity or state organ.

(2)

A State officer or a public officer shall not award or influence the award of a contract to—

(a)

himself or herself;

(b)

the State officer's or public officer's spouse or child;

(c)

a business associate or agent; or

(d)

a corporation, private company, partnership or other body in which the officer has a substantial or controlling interest.

(3)

A state officer or public officer who has an interest in a matter under consideration in a public procurement or asset disposal shall disclose in writing, the nature of that interest and shall not participate in any procurement or asset disposal relating to that interest.

60.
Specific requirements
(1)

An accounting officer of a procuring entity shall prepare specific requirements relating to the goods, works or services being procured that are clear, that give a correct and complete description of what is to be procured and that allow for fair and open competition among those who may wish to participate in the procurement proceedings.

(2)

The specific requirements shall include all the procuring entity's technical requirements with respect to the goods, works or services being procured.

(3)

The technical requirements shall, where appropriate—

(a)

conform to design, specification, functionality and performance;

(b)

be based on national or international standards whichever is superior;

(c)

factor in the life of the item;

(d)

factor in the socio-economic impact of the item;

(e)

be environment-friendly;

(f)

factor in the cost disposing the item; and

(g)

factor in the cost of servicing and maintaining the item.

(4)

The technical requirements shall not refer to a particular trademark, name, patent, design, type, producer or service provider or to a specific origin unless—

(a)

there is no other sufficiently precise or intelligible way of describing the requirements; and

(b)

the requirements allow equivalents to what is referred to.

61.
Tender security
(1)

An accounting officer of a procuring entity may require that tender security be provided with tenders, subject to such requirements or limits as may be prescribed.

(2)

The form of tender security in subsection (1) shall be—

(a)

as prescribed in the Regulations;

(b)

stated as an absolute value;

(c)

an amount of not more than two percent of the tender as valued by the procuring entity.

(3)

Tender security shall be forfeited if the person submitting the tender—

(a)

withdraws the tender after the deadline for submitting tenders but before the expiry of the period during which tenders shall remain valid; or

(b)

refuses to enter into a written contract as required under section 136 or fails to furnish any required performance security.

(4)

A procuring entity may immediately release any tender security if—

(a)

the procurement proceedings are terminated;

(b)

the procuring entity determines that none of the submitted tenders is responsive;

(c)

a contract for the procurement is entered into; or

(d)

a bidder declines to extend the tender validity.

(5)

Tender securities shall not be required in procurements reserved for small and micro-enterprises or enterprises owned by women, youth, persons with disabilities and other disadvantaged groups participating in a procurement proceeding and the target group shall be required to fill and sign the Tender Securing Declaration Form as prescribed.

62.
Declaration not to engage in corruption

A tender, proposal or quotation submitted by a person shall include a declaration that the person will not engage in any corrupt or fraudulent practice and a declaration that the person or his or her sub-contractors are not debarred from participating in procurement proceedings.

63.
Termination or cancellation of procurement and asset disposal proceedings
(1)

An accounting officer of a procuring entity, may, at any time, prior to notification of tender award, terminate or cancel procurement or asset disposal proceedings without entering into a contract where any of the following applies—

(a)

the subject procurement have been overtaken by—

(i) operation of law; or
(ii) substantial technological change;
(b)

inadequate budgetary provision;

(c)

no tender was received;

(d)

there is evidence that prices of the bids are above market prices;

(e)

material governance issues have been detected;

(f)

all evaluated tenders are non-responsive;

(g)

force majeure;

(h)

civil commotion, hostilities or an act of war; or

(i)

upon receiving subsequent evidence of engagement in fraudulent or corrupt practices by the tenderer.

(2)

An accounting officer who terminates procurement or asset disposal proceedings shall give the Authority a written report on the termination within fourteen days.

(3)

A report under subsection (2) shall include the reasons for the termination.

(4)

An accounting officer shall notify all persons who submitted tenders of the termination within fourteen days of termination and such notice shall contain the reason for termination.

64.
Form of communications, electronic procurement and asset disposal
(1)

All communications and enquiries between parties on procurement and asset disposal proceedings shall be in writing.

(2)

Information and Communication Technologies (ICT) may be used in procurement and asset disposal proceedings as prescribed with respect to—

(a)

publication of notices;

(b)

submission and opening of tenders;

(c)

tender evaluation;

(d)

requesting for information on the tender or disposal process;

(e)

dissemination of laws, regulations and directives;

(f)

digital signatures; or

(g)

as may be prescribed by regulations.

65.
Inappropriate influence on evaluations, etc
(1)

After the deadline for the submission of tenders, proposals or quotations—

(a)

a person who submitted a tender shall not make any unsolicited communications to the procuring entity or any person involved in the procurement proceedings that might reasonably be construed as an attempt to influence the evaluation and comparison of tenders; and

(b)

a person shall not attempt, in any way, to influence that evaluation and comparison.

(2)

A person who contravenes the provisions of subsection (1) commits an offence and shall lead to the tenderer being disqualified and the public officer facing disciplinary action in addition to any other action under this Act.

(3)

Upon completion of the evaluation process, a tenderer may communicate with the procuring entity on the procurement proceedings.

66.
Corrupt, coercive, obstructive, collusive or fraudulent practice, conflicts of interest
(1)

A person to whom this Act applies shall not be involved in any corrupt, coercive, obstructive, collusive or fraudulent practice; or conflicts of interest in any procurement or asset disposal proceeding.

(2)

A person referred to under subsection (1) who contravenes the provisions of that sub-section commits an offence.

(3)

Without limiting the generality of the subsection (1) and (2), the person shall be—

(a)

disqualified from entering into a contract for a procurement or asset disposal proceeding; or

(b)

if a contract has already been entered into with the person, the contract shall be voidable.

(4)

The voiding of a contract by the procuring entity under subsection (7) does not limit any legal remedy the procuring entity may have.

(5)

An employee or agent of the procuring entity or a member of the Board or committee of the procuring entity who has a conflict of interest with respect to a procurement—

(a)

shall not take part in the procurement proceedings;

(b)

shall not, after a procurement contract has been entered into, take part in any decision relating to the procurement or contract; and

(c)

shall not be a subcontractor for the bidder to whom was awarded contract, or a member of the group of bidders to whom the contract was awarded, but the subcontractor appointed shall meet all the requirements of this Act.

(6)

An employee, agent or member described in subsection (1) who refrains from doing anything prohibited under that subsection, but for that subsection, would have been within his or her duties shall disclose the conflict of interest to the procuring entity.

(7)

If a person contravenes subsection (1) with respect to a conflict of interest described in subsection (5)(a) and the contract is awarded to the person or his relative or to another person in whom one of them had a direct or indirect pecuniary interest, the contract shall be terminated and all costs incurred by the public entity shall be made good by the awarding officer.

(8)

For the purpose of this section, a person has a conflict of interest with respect to a procurement if the person or a relative of the person—

(a)

seeks, or has a direct or indirect pecuniary interest in another person who seeks, a contract for the procurement; or

(b)

owns or has a right in any property or has a direct or indirect pecuniary interest that results in the private interest of the person conflicting with his duties with respect to the procurement.

(9)

The ownership of, or right in, any property referred to in subsection (8)(b) shall not include rights arising by virtue of owning shares in publicly listed companies.

(10)

For the purpose of subsection (8), the following are persons seeking a contract for a procurement—

(a)

a person submitting a tender, proposal or quotation; or

(b)

if direct procurement is being used, a person with whom the procuring entity is negotiating.

(11)

In this section, "relative" means—

(a)

a spouse, child, parent, brother or sister;

(b)

a child, parent, brother or sister of a spouse; or

(c)

any other prescribed persons.

(12)

Any person who contravenes the provisions of this section commits an offence.

68.
Procurement records
(1)

An accounting officer of a procuring entity shall keep records for each procurement for at least six years after the resulting contract has been completed or, if no contract resulted, after the procurement proceedings were terminated.

(2)

The records for a procurement shall include—

(a)

a brief description of the goods, works or services being procured;

(b)

if a procedure other than open tendering was used, the reasons for doing so;

(c)

if, as part of the procurement procedure, anything was advertised in a newspaper or other publication, a copy of that advertisement as it appeared in that newspaper or publication;

(d)

for each tender, proposal or quotation that was submitted—

(i) the name and address of the person making the submission;
(ii) the price, or basis of determining the price, and a summary of the other principal terms and conditions of the tender, proposal or quotation; and
(iii) a summary of the proceedings of the opening of tenders, evaluation and comparison of the tenders, proposals or quotations, including the evaluation criteria used as prescribed;
(e)

if the procurement proceedings were terminated without resulting in a contract, an explanation of why they were terminated;

(f)

a copy of every document that this Act requires the procuring entity to prepare; and

(g)

such other information or documents as are prescribed.

(3)

After a contract has been awarded to any person or the procurement proceedings have been terminated, the procuring entity shall, on request, make the records for the procurement available to a person who submitted a tender, proposal or quotation, or any interested member of the public where such information held is aligned to the principle of public interest or, if direct procurement was used, a person with whom the procuring entity was negotiating.

(4)

The accounting officer of a procuring entity may charge a fee for making the records available but the fee shall not exceed the costs of making the records available to any person.

(5)

No disclosure shall be made under subsection (3) that would be contrary to section 67(1), but a disclosure, under subsection (3), of anything described in paragraphs (a) to (f) of subsection (2) shall be deemed not to be contrary to paragraphs (b) to (d) of section 67(1).

(6)

An accounting officer of a procuring entity shall maintain a proper filing system with clear links between procurement and expenditure files that facilitates an audit trail.

69.
Procurement approvals
(1)

All approvals relating to any procedures in procurement shall be in writing and properly dated, documented and filed.

(2)

No procurement approval shall be made to operate retrospectively to any date earlier than the date on which it is made except on procurements in response to an urgent need.

(3)

In approving procurements relating to an urgent need, the accounting officer shall be furnished with adequate evidence to verify the emergency.

(4)

No procurement approval shall be made by a person exercising delegated authority as an accounting officer or head of the procurement function unless such delegation has been approved in writing by the accounting officer or the head of the procurement unit, respectively.

(5)

An accounting officer of a procuring entity shall maintain specimen signatures of all persons authorised to make approvals within the procurement process and these signatures shall be availed to all staff and members where applicable.

(6)

Responsibility for each approval made in the procurement procedure shall rest with the individual signatories and accounting officer, whether he or she delegated the authority or not.

PART VII — BASIC PROCUREMENT RULES
71.
Registration of suppliers
(1)

The head of procurement function shall maintain and continuously update lists of registered suppliers, contractors and consultants in various specific categories of goods, works or services according to its procurement needs.

(2)

An application to be included in the list of the procuring entity may be made at anytime, at no cost and shall contain proof of the following—

(a)

eligibility criteria as prescribed in this Act; and

(b)

capability criteria that defines necessary qualifications, experience, resources, equipment and facilities to provide what is being procured;

(3)

A tenderer may seek clarification from the candidate or relevant government agency on eligibility but not on capability.

(4)

The lists shall be applied on the alternative procurement methods as specified and appropriate and the list shall —

(a)

be generated through portal, websites and people submitting hard copies of their intention to supply;

(b)

allow for continuous applications and hence updating;

(c)

be evaluated leading to registration on a bi-annual basis;

(d)

be generated through market knowledge and survey; and

(e)

be as may be prescribed.

72.
Responsibility for complying with Act, etc

Contractors, suppliers and consultants shall comply with the provisions of this Act and the Regulations.

73.
Initiation of procurement process

Subject to the procurement planning, initiation of the procurement process shall be as prescribed in the Regulations.

74.
Invitation to tender
(1)

The accounting officer shall ensure the preparation of an invitation to tender that sets out the following—

(a)

the name and address of the procuring entity;

(b)

the tender number assigned to the procurement proceedings by the procuring entity;

(c)

a brief description of the goods, works or services being procured including the time limit for delivery or completion;

(d)

an explanation of how to obtain the tender documents, including the amount of any fee, if any;

(e)

an explanation of where and when tenders shall be submitted and where and when the tenders shall be opened;

(f)

a statement that those submitting tenders or their representatives may attend the opening of tenders;

(g)

applicable preferences and reservations pursuant to this Act;

(h)

a declaration that the tender is only open to those who meet the requirements for eligibility;

(i)

requirement of serialisation of pages by the bidder for each bid submitted; and

(j)

any other requirement as may be prescribed.

(2)

All tender documents shall be sent out to eligible bidders by recorded delivery.

75.
Modifications to tender documents
(1)

A procuring entity may amend the tender documents at any time before the deadline for submitting tenders by issuing an addendum without materially altering the substance of the original tender.

(2)

An amendment may be made on the procuring entity's own initiative or in response to an inquiry by a candidate or tenderer.

(3)

A procuring entity shall promptly provide a copy of the addendum to each person to whom the procuring entity provided copies of the tender documents.

(4)

The addendum shall be deemed to be part of the tender documents.

(5)

If the tender documents are amended when the time remaining before the deadline for submitting tenders is less than one third of the time allowed for the preparation of tenders, or the time remaining is less than the period indicated in instructions to tenderers, the accounting officer of a procuring entity shall extend the deadline as necessary to allow the amendment of the tender documents to be taken into account in the preparation or amendment of tenders.

76.
Modification of bids
(1)

Before the deadline for submitting tenders, a person who submitted a tender may only change or withdraw it in accordance with the following—

(a)

the change or withdrawal shall be in writing; and

(b)

the change or withdrawal shall be submitted before the deadline for submitting tenders and in accordance with the procedures for submitting tenders.

(2)

After the deadline for submitting tenders, a person who submitted a tender shall not change, or offer to change the terms of that tender.

77.
Submission and receipt of tenders
(1)

Submission of tender documents whether in electronic or manual form, shall be in writing, signed and in the case of manual submission, they shall be sealed in an envelope.

(2)

A tender document and the envelope, in which it is sealed in, shall bear the tender number assigned to the procurement or asset disposal proceedings by the procuring entity.

(3)

A tender shall be submitted before the deadline for submitting tenders and any tender submitted after the deadline shall not be accepted by the procuring entity.

(4)

The procuring entity shall ensure that the place or site where tenders shall be submitted is open and accessible and shall provide, in that place or site, a tender box including an electronic tender box that complies with the prescribed requirements in regulations.

(5)

Each tender that is delivered shall be placed unopened in the tender box —

(a)

if the tender is delivered by post, by the staff of the procuring entity immediately upon receipt; or

(b)

if the tender is delivered otherwise than by post, by the person delivering the tender.

(6)

If a tender that is delivered by post is inadvertently opened, the fact of that opening shall be recorded on the envelope by the person who opened the tender and the tender shall then be placed in the tender box.

(7)

If a tender or part of a tender cannot fit in the tender box it shall be received in the manner set out in the tender documents or the invitation to tender or, if no such manner is set out, in the manner determined by the procuring entity and the procuring entity shall acknowledge receipt of the tender documents.

78.
Opening of tenders
(1)

An accounting officer of a procuring entity shall appoint a tender opening committee specifically for the procurement in accordance with the following requirements and such other requirements as may be prescribed—

(a)

the committee shall have at least three members; and

(b)

at least one of the members shall not be directly involved in the processing or evaluation of the tenders.

(2)

Any bid withdrawn in writing shall not be eligible for evaluation or consideration in the tender process.

(3)

Immediately after the deadline for submitting tenders, the tender opening committee shall open all tenders received before that deadline.

(4)

Those submitting tenders or their representatives may attend the opening of tenders.

(5)

The tender opening committee shall assign an identification number to each tender and record the number of pages received.

(6)

As each tender is opened, the following shall be read out loud and recorded in a document to be called the tender opening register—

(a)

the name of the person submitting the tender;

(b)

the total price, where applicable including any modifications or discounts received before the deadline for submitting tenders except as may be prescribed; and

(c)

if applicable, what has been given as tender security.

(7)

No tenderer shall be disqualified by the procuring entity during opening of tenders.

(8)

The accounting officer of a procuring entity shall, on request, provide a copy of the tender opening register to a person submitting a tender.

(9)

Each member of the tender opening committee shall—

(a)

sign each tender on one or more pages as determined by the tender opening committee; and

(b)

initial, in each tender, against the quotation of the price and any modifications or discounts, where applicable.

(10)

The tender opening committee shall prepare tender opening minutes which shall set out—

(a)

a record of the procedure followed in opening the tenders; and

(b)

the particulars of those persons submitting tenders, or their representatives, who attended the opening of the tenders.

(11)

To acknowledge that the minutes are true reflection of the proceedings held, each member of the tender opening committee shall—

(a)

initial each page of the minutes;

(b)

append his or her signature as well as initial to the final page of the minutes indicating their full name and designation.

(12)

A person who causes the physical loss of tender documents provided for under this section commits an offence.

79.
Responsiveness of tenders
(1)

A tender is responsive if it conforms to all the eligibility and other mandatory requirements in the tender documents.

(2)

A responsive tender shall not be affected by—

(a)

minor deviations that do not materially depart from the requirements set out in the tender documents; or

(b)

errors or oversights that can be corrected without affecting the substance of the tender.

(3)

A deviation described in subsection (2)(a) shall—

(a)

be quantified to the extent possible; and

(b)

be taken into account in the evaluation and comparison of tenders.

80.
Evaluation of tenders
(1)

The evaluation committee appointed by the accounting officer pursuant to section 46 of this Act, shall evaluate and compare the responsive tenders other than tenders rejected under section 82(3).

(2)

The evaluation and comparison shall be done using the procedures and criteria set out in the tender documents and, in the tender for professional services, shall have regard to the provisions of this Act and statutory instruments issued by the relevant professional associations regarding regulation of fees chargeable for services rendered.

(3)

The following requirements shall apply with respect to the procedures and criteria referred to in subsection (2)—

(a)

the criteria shall, to the extent possible, be objective and quantifiable;

(b)

each criterion shall be expressed so that it is applied, in accordance with the procedures, taking into consideration price, quality, time and service for the purpose of evaluation; and

(4)

The evaluation committee shall prepare an evaluation report containing a summary of the evaluation and comparison of tenders and shall submit the report to the person responsible for procurement for his or her review and recommendation.

(5)

The person responsible for procurement shall, upon receipt of the evaluation report prepared under subsection (4), submit such report to the accounting officer for approval as may be prescribed in regulations

(6)

The evaluation shall be carried out within a maximum period of thirty days.

(7)

The evaluation report shall be signed by each member of evaluation committee.

81.
Clarifications
(1)

A procuring entity may, in writing request a clarification of a tender from tenderer to assist in the evaluation and comparison of tenders.

(2)

A clarification shall not change the terms of the tender.

82.
No correction of errors

The tender sum as submitted and read out during the tender opening shall be absolute and final and shall not be the subject of correction, adjustment or amendment in any way by any person or entity.

83.
Post-qualification
(1)

An evaluation committee may, after tender evaluation, but prior to the award of the tender, conduct due diligence and present the report in writing to confirm and verify the qualifications of the tenderer who submitted the lowest evaluated responsive tender to be awarded the contract in accordance with this Act.

(2)

The conduct of due diligence under subsection (1) may include obtaining confidential references from persons with whom the tenderer has had prior engagement.

(3)

To acknowledge that the report is a true reflection of the proceedings held, each member who was part of the due diligence by the evaluation committee shall—

(a)

initial each page of the report; and

(b)

append his or her signature as well as their full name and designation.

84.
Professional opinion
(1)

The head of procurement function of a procuring entity shall, alongside the report to the evaluation committee as secretariat comments, review the tender evaluation report and provide a signed professional opinion to the accounting officer on the procurement or asset disposal proceedings.

(2)

The professional opinion under sub-section (1) may provide guidance on the procurement proceeding in the event of dissenting opinions between tender evaluation and award recommendations.

(3)

In making a decision to award a tender, the accounting officer shall take into account the views of the head of procurement in the signed professional opinion referred to in subsection (1).

85.
Recommendation for contract awards

Subject to prescribed thresholds all tenders shall be evaluated by the evaluation committee of the procuring entity for the purpose of making recommendations to the accounting officer through the head of procurement to inform the decision of the award of contract to the successful tenderers.

86.
Successful tender
(1)

The successful tender shall be the one who meets any one of the following as specified in the tender document—

(a)

the tender with the lowest evaluated price;

(b)

the responsive proposal with the highest score determined by the procuring entity by combining, for each proposal, in accordance with the procedures and criteria set out in the request for proposals, the scores assigned to the technical and financial proposals where Request for Proposals method is used;

(c)

the tender with the lowest evaluated total cost of ownership; or

(d)

the tender with the highest technical score, where a tender is to be evaluated based on procedures regulated by an Act of Parliament which provides guidelines for arriving at applicable professional charges.

(2)

For the avoidance of doubt, citizen contractors, or those entities in which Kenyan citizens own at least fifty-one per cent shares, shall be entitled to twenty percent of their total score in the evaluation, provided the entities or contractors have attained the minimum technical score.

87.
Notification of intention to enter into a contract
(1)

Before the expiry of the period during which tenders must remain valid, the accounting officer of the procuring entity shall notify in writing the person submitting the successful tender that his tender has been accepted.

(2)

The successful bidder shall signify in writing the acceptance of the award within the time frame specified in the notification of award.

(3)

When a person submitting the successful tender is notified under subsection (1), the accounting officer of the procuring entity shall also notify in writing all other persons submitting tenders that their tenders were not successful, disclosing the successful tenderer as appropriate and reasons thereof.

(4)

For greater certainty, a notification under subsection (1) does not form a contract nor reduce the validity period for a tender or tender security.

88.
Extension of tender validity period
(1)

Before the expiry of the period during which tenders shall remain valid the accounting officer of a procuring entity may extend that period.

(2)

The accounting officer of a procuring entity shall give in writing notice of an extension under subsection (1) to each person who submitted a tender.

(3)

An extension under subsection (1) shall be restricted to not more than thirty days and may only be done once.

(4)

For greater certainty, tender security shall be forfeited if a tender is withdrawn after a bidder has accepted the extension of biding period under subsection (1).