- Businesses in Kenya seeking government tenders will soon have to contend with new regulations.
- Among the proposed changes is the amending of the compulsory requirement that compels the government to award tenders to the lowest bidder.
- According to the Institute of Economic Affairs the compliance rate of public procurement regulations is low.
Kenya’s Procurement Regulator Strategic Plan for businesses that seek government tenders will soon have to contend with new regulations should the Public Procurement Regulatory Authority forge ahead with the proposed changes on the issuance of state tenders.
Among the proposed changes is the amending the compulsory requirement that compels the government to award tenders to the lowest bidder. PPRA argues out that this has compromised the quality of some of the projects undertaken under this model of procurement.
The Authority’s Director General Patrick Wanjuki, said that in the next three years, PPRA is looking to strengthen its capacity in an effort to ensure that corruption is weeded out of government tendering.
“Whereas the law says the lowest evaluated bidder, does that lowest evaluated bidder deliver value? In some cases, that principle is not delivering value and we expect that out of this process that we shall be able to address some of the gaps in the current legal framework,” said Wanjuki.
Speaking during the release of PPRA’s 2023-2027 strategic plan the director general pointed out that despite the Authority only receiving Sh372 million in budgetary allocation its plan will require at least Sh911million in the first year of implementation.
“Whereas market public procurement tries to ensure that we operate within a certain purview of the law we also want to understand what is it that can drive our procurement system to fit what is best,” added Wanjuki.
Among the other changes that the entity is pushing is the acquisition of a new system that will see compliance monitored through system other than the manual way in the current system.
The implementation of the strategic plan comes at a time that the piloting of government’s end to end e-procurement system is expected to continue up to the end of this year (2024), in a move aimed at weeding out corruption in public procurement and disposal processes.
Kenya’s Procurement Regulator Strategic Plan
Treasury Cabinet Secretary Njuguna Ndung’u said that the strategic plan will cover 63 government entities as the state looks to stream line the tendering. The National Treasury has since approved the capacity building levy that will see the authority charge a levy on all procurement spend from exchequer. The proposals have since also been passed by parliament and is set to commence in the next 10 days on July 1.
On 15 August 2023, the Cabinet Secretary for the National Treasury and Economic Planning published the proposed Public Procurement Capacity Building Levy Order, 2023 and invited comments from members of the public.
The Proposed Order introduced a levy of 0.03 percent of the contract value on signed contracts between a procuring entity and suppliers (the Levy) which the procuring entity is required to deduct when making the relevant payment under the contract to the supplier.
“This levy exempts development partner’s contributions and we expect to raise additional funds to ensure we finance this strategic plan towards the next five years,” added the director general.
Capacity building levy will be used in among others upscaling the various engagements by the authority. According to the Institute of Economic Affairs the compliance rate of public procurement regulations is low, with estimations showing that less than 20 per cent of entity’s adhere to these laws.
Pascal Tegwa regional procurement hub coordinator for the World Bank noted that public procurement value in Kenya as per concept note is estimated at $15.8 billion (Sh2 trillion)
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