Transcentury unit loses pipeline tender

Kenya Pipeline Company has been cleared to proceed with the final evaluation of bids for the expansion of its Nairobi fuel terminal after the public procurement watchdog rejected an application by Civicon Limited to have the process stopped.

The Public Procurement Administrative Review Board said KPC’s decision to lock out Civicon from the tender was justified because the applicant failed to prove it had the capacity and experience to carry out the job.

Civicon, which generates about Sh5 billion a year in revenue, is majority owned by listed investment firm TransCentury —which uses the engineering firm to build power plants, gas storage facilities and roads.

“The applicant’s request for review filed with the board on June 20, 2014 is hereby dismissed and the procuring entity’s decision declaring the applicant’s technical bid as being non-responsive is hereby upheld,” the board said in a ruling.

Civicon was among 14 firms that responded to a tender call by KPC for the construction of additional fuel storage tanks in its Nairobi terminal to cater for the extra petroleum products when a new pipeline from Mombasa becomes operational in 2016. The oil firm plans to build four storage tanks with a total capacity of 133.52 million litres — an equivalent of 22 per cent of KPC’s total national capacity of 612.32 million litres.

The Nairobi terminal with a capacity of 100,528 cubic metres is presently the second largest after the Kipevu oil storage facility that holds 326,333 cubic meters of petroleum products.

Eight firms including Civicon qualified for the detailed technical evaluation of bids on areas such as experience and past performance, tank design and financial capacity among others. The firm, however, did not make it past the technical evaluation stage after KPC’s tender committee questioned its capability and experience to handle the job.

The committee said Civicon failed to provide evidence that it had built a fuel storage tank with a capacity of at least 30 million litres as specified in the tender document. A review of four projects listed by the firm in its bid documents showed none of them met the minimum threshold of 30 million litres of storage capacity.

“You attained a total technical score of 71 per cent and zero per cent in the experience and past performance criteria. You therefore did not achieve the required 75 per cent overall pass mark and 50 per cent for each criteria,” KPC’s tender committee said in a letter to Civicon.

But the building and engineering firm termed KPC evaluation of the technical bids unfair and demanded for a review, arguing it had listed a consortium of experienced partners in its bid. The board said Civicon’s plea for a review was not weighty because the criterion for evaluation was clearly stated in the tender documents.

“Once the procuring entity had prepared a tender document containing the relevant criteria it would be practical for every bidder to come up with its own criteria any more than candidates in an examination would come up with his or her own marking scheme,” the board said.

“If the board were to uphold the applicant’s submission, it would be opening up procurement entities to the possibility of a nominal bidder or a bidder who has no experience or capacity to obtain work.”