The public procurement watchdog has faulted the Kenya Electricity Generating Company (KenGen) for cancelling a tender on grounds of budget cuts by the State.
The Public Procurement Administrative Review Board (PPARB) said KenGen was not justified to cancel the tender for fumigation and pest control services at its offices and power stations on the basis of budget chops announced by President William Ruto.
“We have established that the termination of the procurement proceedings of the subject tender was irregular and in breach of Section 63 of the Act,” the board said in a December 23, 2024 ruling.
“We fault the 1st respondent (accounting officer KenGen) for commencing the procurement process of the subject tender without ascertainment of whether there were sufficient funds to meet the obligations of the resulting contract as such actions were contrary to the provisions of the Act and the Constitution noting that such issues of budgetary allocation 57 ought to have been arrested before commencement of procurement proceedings in the subject tender,” the board said.
President Ruto cut government spending in July last year following a deadly wave of youth-led protests forcing withdrawal of the controversial Finance Bill, 2024 which had sought to raise over Sh344 billion in additional revenue.
The power generator advertised a tender for provision of fumigation and pest control services at its premises and power stations for two years between 2024 and 2026 in June last year.
One of the nine bidders for the tender, Peesam Limited, was picked by KenGen as the lowest bidder at a cost of Sh3.8 million, taking the firm to the due diligence stage.
Following due diligence, KenGen cancelled the tender, citing lack of funds a decision which Peesam Limited appealed at the board.
The firm said it had passed the due diligence done on September 30, 2024, at its premises in Thika and that the evaluation team found that the information provided by the said bidder was true and that it could perform the contract.
The firm said termination of the tender by KenGen was unlawful.
In its decision rendered last week, the PPARB ruled that it is the procuring entity’s responsibility to ensure that it has a sufficient budget before initiating procurement.
It said KenGen floated he tender after President Ruto had already announced the austerity measures but still went ahead with the process.
“There is therefore no adequate evidence pertaining to budgetary insufficiency and allocation supplied to the board in support of termination of the procurement proceedings in the subject tender,” the board said.
“The board finds and holds that the respondents have failed to fulfill the substantive requirements for the termination of procurement proceedings in the subject tender as required by Section 63(1)(b) of the Act and the aforecited case laws since they have not provided sufficient evidence of inadequate budgetary allocation justifying termination of the subject tender,” the watchdog said.
PPRB quashed KenGen’s decision to terminate the tender and was ordered to proceed with the tender.
“The 1st respondent (KenGen accounting officer) is hereby directed to act on the findings of the evaluation committee at the financial evaluation and due diligence stage and proceed with the procurement process to its logical conclusion within 21 days of this decision taking into consideration the board’s findings herein. Provided that the proceedings shall not be concluded earlier than the 14-day window period,” it ruled.
