Rubis wins Sh77.bn KPLC fuel supply deal

Rubis Energy

Rubis Energy has won a Sh7.7 billion tender to supply diesel to Kenya Power’s 30 off-grid stations, which will see the oil marketer supply low-sulphur diesel to the utility firm for two years.

This follows the conclusion of a case where Dalbit Petroleum Limited was contesting the award of the tender to Rubis, before the Public Procurement and Administrative Review Board (PPARB).

In orders issued by the PPARB on January 2, the Board dismissed Dalbit Petroleum’s case, paving the way for Rubis to undertake the 24-month Sh7.737 billion tender.

Kenya Power advertised the tender for procurement of supply and delivery of low sulphur diesel to 30 off-grid power stations on October 10, last year, attracting bids from six oil marketers.

Five oil marketers, however, failed at the preliminary tender evaluation stage, only Rubis succeeding through technical and financial evaluation stages.

“We are therefore not persuaded by the applicant’s arguments to consider that its tender was substantially responsive and that any minor deviations in its tender were immaterial and would not affect the competitive position of other tenders as public procurement espouses the principle of competition which requires that participating tenderers should complete on equal footing such that any non-compliance on any tender requirement calls for the automatic disqualification of the non-compliant tender,” the Board decided.

The Board dismissed Dalbit Petroleum’s request for review and ordered Kenya Power to proceed with procurement of the tender to conclusion.

The PPARB noted that at the end of the preliminary tender evaluation stage, the interested party’s (Rubis Energy Kenya) bid, being the only responsive bid was recommended for award of the subject tender for a period of 24 months based on the price formulae set out in the price schedule subject to the estimated annual budget of Sh3,868,669,072 VAT (Value Added Tax) exclusive and availability of funds from MoE&P (Ministry of Energy and Petroleum) as recommended.

After bidders were notified of Rubis Energy’s win on November 17, Dalbit Petroleum moved before the PPARB on December 11 filing a request for review.

Among complaints by Dalbit Petroleum was that letters of notification sent to tenderers were signed by Rosemary Oduor (former acting Kenya Power MD) instead of Joseph Siror (the current MD), that reasons for its disqualification were unfair and unprocedural, and that it visited 30 off-grid stations as a mandatory tender requirement, but only 11 were referenced in the subject tender.

Kenya Power told the Board that while it was a mandatory tender requirement for all tenderers to visit all the 30 off-grid stations relating to the tender, Dalbit Petroleum visited only 11, while the other 19 were in reference to a past tender.

“Counsel submitted that for the Applicant to qualify as the lowest evaluated bidder, it had to pass the preliminary evaluation stage, the technical evaluation stage and the financial stage and having been disqualified at the preliminary evaluation stage, it wasn’t the lowest evaluated bidder and its tender wasn’t the most responsive,” the documents state.

On January 2, the PPARB dismissed Dalbit Petroleum’s case finding that Kenya Power’s tender evaluation committee was right to disqualify its tender, for failing to meet mandatory tender requirements.

The Board decided that Dalbit Petroleum failed to visit the 30 off-grid stations Kenya Power wants supplied with low Sulphur diesel, as a mandatory requirement of the tender.

It went ahead to note that a procuring entity cannot waive a mandatory requirement or term it a minor deviation as Dalbit Petroleum wanted in the case, since a mandatory requirement is a hurdle that a tender must overcome in order to be considered for further evaluation.

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Note: The results are not exact but very close to the actual.