Public Procurement Law in Kenya: Tender Process and Dispute Resolution

Public procurement is one of the largest markets in Kenya. National and county governments, state corporations, public universities and other public entities buy goods, works and services worth hundreds of billions of shillings every year. For businesses, government tenders are a major opportunity; for the public, procurement must deliver value for money and integrity. The Public Procurement and Asset Disposal Act, 2015 (PPADA) sets the rules. This guide explains how the tender process works, how bidders can comply, and how to challenge a procurement decision.

Key takeaways

• Public procurement must be fair, equitable, transparent, competitive and cost-effective, as required by Article 227 of the Constitution.
• The PPADA and the Public Procurement and Asset Disposal Regulations, 2020 govern all procurement by public entities.
• At least 30% of procurement spend is reserved for youth, women and persons with disabilities under the AGPO programme.
• A bidder can challenge a procurement decision before the Public Procurement Administrative Review Board within 14 days of notification or of the breach.
• Board decisions can be challenged by judicial review in the High Court within 14 days.

The institutional framework

Procurement methods

Open tendering is the preferred method. Other methods may be used only where the conditions in the Act are met:

• Open tender: advertised publicly and open to all qualified bidders, nationally or internationally.
• Restricted tender: limited to pre-qualified or a few suppliers where the goods or services are specialised or the cost of open tendering is disproportionate.
• Two-stage tender: used for complex procurement where technical specifications must first be refined.
• Request for proposals: used for consultancy and professional services, evaluated on quality and cost.
• Request for quotations: for low-value, readily available goods and services.
• Direct procurement: allowed only in limited circumstances, such as urgent need or where only one supplier is available, and is closely scrutinised.
• Framework agreements, electronic reverse auctions, design competitions and specially permitted procurement: each subject to specific conditions.

The tender process step by step

1. Planning and budgeting

Procurement must be included in the entity's annual procurement plan and be within its approved budget.

2. Invitation to tender

The entity advertises the tender, usually on its website, the PPRA tenders portal and the government electronic procurement system, with tender documents setting out the requirements, specifications and evaluation criteria.

3. Preparation and submission of bids

Bidders must submit complete bids before the deadline. Common mandatory requirements include company registration documents, a valid tax compliance certificate, a tender security where required (which may not exceed 2% of the tender value), statutory declarations, and evidence of experience and capacity. Missing a single mandatory document can lead to disqualification.

4. Opening of tenders

Tenders are opened immediately after the deadline in the presence of bidders who wish to attend, and the results of opening are recorded.

5. Evaluation

An evaluation committee assesses bids against the criteria in the tender document only. Evaluation usually involves preliminary (mandatory) checks, technical evaluation and financial evaluation. The tender is awarded to the lowest evaluated responsive bid or, for proposals, the highest-scoring proposal.

6. Professional opinion and award

The head of procurement gives a professional opinion, and the accounting officer decides on the award.

7. Notification

The entity must notify the successful bidder and, at the same time, all unsuccessful bidders, giving them reasons why their bids were unsuccessful.

8. Standstill period and contract

The contract cannot be signed until at least 14 days after notification of the award, which allows unsuccessful bidders to seek review. The contract must be signed within the tender validity period.

Preference and reservations: AGPO

Under Article 227(2)(b) of the Constitution and section 157 of the PPADA, procuring entities must allocate at least 30% of their procurement budgets to enterprises owned by youth, women and persons with disabilities registered under the Access to Government Procurement Opportunities (AGPO) programme. There are also preferences for local contractors and Kenyan goods, and margins of preference for citizens.

Electronic procurement

The government has moved public procurement onto an electronic government procurement (e-GP) system managed by the National Treasury, covering supplier registration, tender advertisement, bid submission, evaluation and contract management. Bidders should register on the system and familiarise themselves with its procedures well before a tender deadline, as technical difficulties at the last minute are rarely accepted as an excuse for late submission.

Challenging a procurement decision

Request for review to the PPARB

A candidate or tenderer who claims to have suffered, or to risk suffering, loss or damage due to a breach of duty by a procuring entity may file a request for review with the PPARB. Key rules:

• The request must be filed within 14 days of notification of the award or of the date of the alleged breach.
• Filing a request suspends the procurement process, so the contract cannot be signed while the review is pending.
• The Board must decide the request within 21 days of filing.
• The Board can annul decisions, order re-evaluation, direct the entity to award the tender in accordance with the law, or dismiss the request.

Common grounds include failure to evaluate in line with the tender document, introducing new criteria during evaluation, inadequate reasons in notification letters, and awarding to a non-responsive bidder.

Judicial review in the High Court

A party aggrieved by a Board decision may seek judicial review in the High Court within 14 days of the decision. The High Court must determine the application within 45 days, and an appeal to the Court of Appeal must be filed within seven days and decided within 45 days. These strict timelines make speed essential.

Integrity and sanctions

The PPADA prohibits corrupt, fraudulent, collusive and coercive practices. Bidders found to have engaged in such practices may be debarred by the PPRA from participating in public procurement for a set period. Officials and bidders involved in procurement fraud also face prosecution under the Anti-Corruption and Economic Crimes Act. Bid rigging is also a prohibited practice under the Competition Act.

Checklist for bidders

1. Register on the e-GP system and keep company documents, tax compliance and AGPO certificates current.
2. Read the tender document carefully and list every mandatory requirement.
3. Seek clarifications in writing within the time allowed.
4. Ensure the tender security is in the exact form and amount required.
5. Submit well before the deadline.
6. Diarise the 14-day review deadline from the date of notification.
7. Keep copies of all submissions and correspondence.

Frequently asked questions

Can I challenge a tender award if I was not told why I lost?

Yes. Procuring entities must give unsuccessful bidders reasons. Failure to do so is itself a ground for review, and you can ask the Board to examine the evaluation.

What happens to the contract when a request for review is filed?

The procurement process is suspended and the contract cannot be signed until the Board decides the matter. A contract signed in breach of the standstill period or during review proceedings may be declared void.

How W.O.A. Advocates can help

We advise bidders and procuring entities on tender compliance, prepare and defend requests for review before the PPARB, and act in judicial review proceedings. Contact our procurement team immediately if you are considering a challenge, as the deadlines are short.