Procurement watchdog blocks second JKIA fast-food tender

A second fast-food tender at the Jomo Kenyatta International Airport has been cancelled after the procurement watchdog stopped the Kenya Airports Authority (KAA) from awarding the contract to a firm that runs the Steers and Debonairs Pizza franchises.

The Public Procurement Oversight Authority (PPOA) said that KAA erred in awarding the tender to Hoggers Limited and asked the airport’s manager to name a new firm after a fresh assessment of the bids.

Last month, the watchdog also stopped KAA from awarding a fast-food catering contract to the Hurlingham-based Slims Restaurants after US-based fast food chain, Subways, appealed against the tender.

The fast-food shop and the catering unit are set to operate at JKIA’s new Unit 4, which is an extension of the existing airport set to be opened next month.

“The procuring entity is directed to re-evaluate the tenders of the three most responsive bidders for both technical and financial evaluation in accordance with the criteria set out in the tender documents and take into account the findings of the board,” PPOA ruled last week.

READ: Watchdog cancels JKIA fast food tender

The freeze of the fast-food shop tender was prompted by a complaint from a Dubai firm, Suzan General Trading Limited that runs duty free shopping complexes and mini-hotels at airports and sea ports.

In its application to the PPOA review board, the Dubai company said KAA failed to accurately assess its concession fee and also used the wrong conversation rate against the US dollar while evaluating the firm’s bids.

It said the KAA tender team used a mean rate of Sh86.44 against the dollar instead of a selling rate of Sh86.52, leading to anomalies in its overall bid score.

It also accused KAA of irregularly accepting and analysing a profit and loss statement provided by Hoggers Ltd rather than a valid cash flow statement as required by the tender documents.

Suzan Ltd said KAA made errors when evaluating its financial bid by using its five-year cash flow statement to arrive at a concession fee of $1.53million instead of $1.65 million, which was greater than the sum proposed by its rival, Hoggers Ltd.

It further accused KAA of according all bidders a common weight in evaluating their technical proposals despite variances in their capabilities and strengths.

The PPOA team acknowledged the anomalies in the evaluation processes and ordered for fresh scrutiny.

“Although the procuring entity argued that the cash flow statement was of no significance to the concession rate, the board finds that the criteria used by the procuring entity was not objective,” the PPOA review board stated.

The board also said that the use of Sh86.44 exchange rate against the dollar instead of 86.52 favoured Hoggers Ltd and breached the rules of fairness.

Unit 4 is expected to handle 2.5 million more passengers and ease congestion in East Africa’s main air travel hub. JKIA was built in the 1970s to handle 2.5 million passengers annually and has since struggled to handle the more than six million people who jet in and out every year.