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OVERVIEW OF THE PUBLIC PROCUREMENT
AND DISPOSAL ACT, 2005
Dr. Fred Mugambi Mwirigi
JKUAT
Schematic Representation of Legal and Regulatory Hierarchy
The Constitution
The Procurement Law
The Procurement Regulations
Procurement Manuals and Standard Bidding Documents
Circulars
Practice and Tradition
The Constitution serves as the highest legal authority. It is not expected to be amended except under exceptional circumstances. It covers all institutions and people in the country
The Procurement Regulations, typically issued by the Ministry of Finance, has application only to those Government Bodies that fall under its purview. Regulations can be expected to be updated very three years or so Different procurement entities may have different technical requirements and so may need to develop specific procurement manuals and standard bidding documents to address their kind of procurement. These must be in conformity with the regulations.
The Procurement Law, passed by parliament, provides the basis for the legal and regulatory framework specific to procurement. It has legal authority over all Government institutions. It can be expected to be amended only very decade or two
Circulars, provide for the greatest of flexibility, but do not carry the full force of the law or regulations. It is important that the law be clear on who is authorised and responsible to issue procurement circulars
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PARTS OF THE ACT This Act has Eleven Parts• PART I: PRELIMINARY (Section 1-7)• Deals with the purpose of the Act,
definitions of terms, conflict with other Acts, conflict with international agreements, and conflicts with conditions of donated funds.
• In case of conflict with this Act and Donor conditions, the Act prevails except in instances of negotiated grants and loans
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PART II: BODIES INVOLVED IN THE REGULATION OF PUBLIC PROCUREMENT (Section 8-25)
Deals with the establishment of the Public Procurement Oversight Authority (PPOA), Public Procurement Oversight Advisory Board, and Public Procurement Administrative
Review Board.Functions of the Proposed Bodies (a) Public Procurement Oversight Authority (PPOA): ensuring procurement procedures are complied
with; monitor the performance of the public
procurement system and report to the Minister (M&E)
assist in the implementation of an efficient and effective public procurement system through:
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• Preparation of manuals
• Providing advice and assistance to procuring entities
• Training and professional development
• Issuing directions to procuring entities
• Ensuring engagement of procurement professionals
• Offer other functions provided under this Act.
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Director General: · Shall be the Chief Executive of the
Authority· Appointed by the Advisory Board· Term of office – 5 years, renewable
once· Termination by the Advisory Boards
– Conditions:– Incompetence– infirmity– conviction– Corruption– employed in other public office– Bankruptcy.
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• FUNDS OF THE AUTHORITY
– Money appropriated by Parliament – Loans/grants– Revenue/fees for services rendered– Capacity building levy
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(b) Advisory Board:(i) Composition – 9 members
appointed by the Minister from persons nominated by prescribed (private and public) organizations. (First schedule for prescribed organizations), and the Director-General.
(ii) Functions: • Advise the Authority • Approve estimates of revenue and
expenditures of the Authority.
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• Recommend appointment or termination of Director- General in accordance with this Act.
• Other functions and duties provided for under the Act.
(c) Public Procurement Administrative Review Board
• This is continued as in the current Public Procurement Regulations.
• Composition of the Board shall be as prescribed in the regulations.
• The Authority shall provide administrative services to the Review Board.
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PART III: INTERNAL ORGANIZATIONS OF PUBLIC ENTITIES RELATING TO
PROCUREMENT(Section 26-28)
Purpose:(a) To ensure decisions are made in a
systematic and structured way.(b) Procurement shall be within
approved budgets through an annual procurement plan.
(c) Establishment of tender committees and procurement units
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(d) Procuring entities to be staffed with professionals.
(e) Accounting officers to ensure that the Act is complied with.
(f) Engagement of procuring agents allowed.
(g) Authority to register procuring agents(h) Authority to assist in the establishment
of an examination body and professional association for procurement professionals.
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PART IV: GENERAL PROCUREMENT RULES (Section 29 - 49)
• Use of alternative methods:–Approval of tender committee
required–Justification in writing required.
• No order splitting to avoid use of the procurement procedures
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• Qualifications to be awarded a contract one should;– Have necessary qualifications, resources
and equipment– Have legal capacity to enter into a
contract– Not be insolvent, in receivership or
bankrupt– Be debarred from participating in
procurement proceedings• Pre-qualification procedures
– Prequalification results from other procuring entities allowed
• Limitations on contracts with employees
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• Participation, no discrimination except as prescribed
• Maximum opportunities to SMEs • Corrupt practice – no involvement in
corrupt practices• No involvement in fraudulent
practices• No collusive practices• No conflict of interest
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• No disclosure of confidential information
• Keeping of proper procurement records
• Publication of contract awards• Amendments to contracts • Inspection and Audit relating to
contracts.
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PART V:OPEN TENDERING (Section 50-71) ·
This part deals with the following Invitation to tender• Tender documents• Advertisement• Time for preparing tenders• Tender security• Changes to tenders• Opening of tenders
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• Responsiveness of tenders• Evaluation of tenders• Notification of award • Creation of a contract • Time for preparing tenders• Tender security• Extension of tender validity
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PART VI: ALTERNATIVE PROCUREMENT PROCEDURES (72-92)
• The part deals with alternative procurement methods:
– Restrictive tendering– Request for proposal– Request for quotations – Procedure for low value procurement– Specially permitted procurement
procedures (concessioning).
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PART VII:ADMINISTRATIVE REVIEW OF PROCUREMENT PROCEDURES (Section 93-
100)
This part deals with• Request for a review
– An aggrieved party has a right of administrative review
• Matters not subject to a review:– Choice of procurement procedure– Rejection of all tenders– Signed contracts– Frivolous appeals.
• Suspension of proceedings– Procurement proceedings to be suspended
upon request for review
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• Dismissal of frivolous appeals• Parties to Review
– The person who requested the review– The procuring entity– Successful tenderer notified by the procuring
entity– Such other persons as the Review Board may
determine
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• Powers of Review Board– Annul anything the procuring entity has
done in the procurement proceedings– Give directions to the procuring entity
with respect to anything to be done or redone in the procurement proceedings
• Judicial review.– Any party to the review aggrieved may
appeal to the High Court
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PART VIII: AUTHORITY POWERS TO ENSURE COMPLIANCE ( Section 101-114)
Information to Authority Public entities required to give information relating to procurement to the authority
InvestigationsDirector-General may order investigations and
appoint an investigator Powers to investigate
The investigator shall have access to all books, returns, reports and other documents of the procuring entity or a person who participated in the procurement proceedings, including electronic documents
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Report of investigation The Director-General shall prepare a summary
of findings and recommendations and give a copy of the summary to the procuring entity and to the Kenya Anti-Corruption Commission.
Request for reviewProcuring entities and any other persons affected by actions resulting from the recommendations by the investigator may request the review of the order by the Review Board.
Dismissal of frivolous requestsReview Board may dismiss a request on this ground
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Parties to review– the who requested the review– the procuring entity– such other persons as the Review Board
may determine
Powers of Review Board– can confirm, vary or overturn Director-
Generals decision– order payment of costs as between parties
to the review
Judicial Review.– A party to the review may appeal from the
decision of the Review Board to the High Court.
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PART IX: DEBARMENT FROM PARTICIPATING IN PROCUREMENT PROCEDURES (Section 115-125)
• Director-General with the approval of the Advisory Board may debar a person from participating in procurement proceedings
Grounds of debarment: an offence under this Act offence relating to procurement under any
other Act breach of contracts Giving false information about qualifications Refusal to enter into a written contract
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Period of debarment (5 years) Right to make representations
A person shall be allowed to make presentation before debarment
Request for ReviewA debarred person may request a review
by the Review Board Judicial Review
Judicial review is also available to the debarred person
List of debarred persons.The PPOA shall maintain and make available to public entities a list of persons debarred from participating in procurement proceedings
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PART X: DISPOSAL OF STORES AND EQUIPMENT (Section 126-
132)• The accounting officer of a public entity
shall be primarily responsible for ensuring that the public entity fulfils its obligations as far as disposal is concerned
• Disposal committee to be established by every procuring entity
• Disposal procedure- employee in charge of obsolete, unserviceable or surplus stores or equipment to bring the matter to the attention of the disposal committee
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• Methods of disposal:– transfer to another entity– sale by public tender– sale by public auction– destruction, dumping or burying– trade-in
• There shall be a time limit for acceptance of recommendations of disposal committee by the Accounting Officer.
• Restriction on disposal to employees to be set out in the regulations.
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PART XI: MISCELLANEOUS (Section 133-144)
• Defence & National Security organs to comply with this Act.
• Dual list i.e. items subject to open and restricted procurement
• Annual agreement with authority on category of restricted list
• Restricted list subjected to classified Audit by the Auditor and Controller General or his/her appointee
• Consultative meeting to be held once a year
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• Offences: –Obstruction– lying or misleading–delay in opening of tenders or evaluation or award of contracts
–opening bids prior to appointed time.
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General Penalty: Fine not exceeding Kshs.4 million or
imprisonment for term not exceeding 10 years or both for an individual.
If corporate body, fine not exceeding Kshs.10 million.
Public officer shall be disqualified from public office.
Private individual shall be debarred Protection from personal liability: Code of ethics All procurement and disposal to be carried in
accordance with the code of ethics specified by PPOA
Minister to issue Regulations to implement the Act
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GOING FORWARD PPOA seeks to engage in transformative approaches
such as:-◦ Widen and deepen the use of compliance tools
(assessments, audits, investigations)◦ Widen the use of Framework Contracting ◦ Reforming the Supplies Branch◦ Developing e-procurement framework◦ Mandatory reporting requirements◦ Enhance self-regulation by introducing Internal Procurement
Performance Monitoring Tool◦ Widen network of allies (inter agencies)◦ Market price indexing◦ Enhance Public Private Partnerships◦ Developing long term policy framework in public
procurement◦ Communicate loudly and often
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COMMENTS/QUESTIONS
“THANK YOU”
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