Economy

Amaco wins Sh190m city motorcycle tender

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Honda Motorcycle Kenya limited employees assemble a motorcycle at the assembly plant in the Industrial area in Nairobi. PHOTO | SALATON NJAU | NMG

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Summary

  • Justice Pauline Nyamweya faulted the Public Procurement Administrative Review Board for cancelling the tender awarded to Africa Merchant Assurance Co. Ltd (Amaco), yet it had no powers to do so.
  • In the dispute, Madison General insurance and Britam General Insurance challenged the tender arguing that they were not notified about its bids not being successful.
  • Amaco, the court heard, quoted the lowest price at Sh190.6 million.

A firm associated with Deputy President William Ruto has won a Sh190 million tender for the provision of insurance covers for vehicles and motorcycles of Nairobi County, which was cancelled last year by the procurement regulator.

Justice Pauline Nyamweya faulted the Public Procurement Administrative Review Board for cancelling the tender awarded to Africa Merchant Assurance Co. Ltd (Amaco), yet it had no powers to do so.

The Judge said Amaco had demonstrated that it was the successful bidder and after the lapse of 14 days’ statutory period and availing the acceptance and the performance bond, it signed a contract on April 30, 2020 and had proceeded to effect the insurance covers.

“The ex parte Applicant (Amaco) is therefore entitled to the orders sought of certiorari to quash the said decision, in light of the applicable principles as regards the grant of this remedy,” the Judge said.

In the dispute, Madison General insurance and Britam General Insurance challenged the tender arguing that they were not notified about its bids not being successful. The board was also informed during the hearing that Amaco was subject to an insolvency case.

After hearing the case, the board then ordered the Nairobi City County to undertake fresh evaluation of financial bids excluding Amaco, within seven days.

Amaco then moved to the High Court saying there was no request before the board to nullify the tender and that the board failed to consider that after signing the contract, the parties proceeded to perform the contract.

The board defended itself saying the decision was informed by the law applicable, facts and issues raised before it. The Board, however, said the insolvency case was not considered during the hearing as it was that Amaco had reached consent in the matter.

The county government argued that it was a waste of public resources and time for the tender reevaluated a second time and that the board deliberately issued directions on the margin of preference that would expressly disqualify the lowest evaluated bid that had passed the technical evaluation, and thus exposed the taxpayers to pay more for the supply of the insurance services.

Amaco, the court heard, quoted the lowest price at Sh190.6 million.

“The Respondent (board), having applied an erroneous criterion and having failed to interrogate and make a determination of the material factor as to when time started to run for the standstill time, thereby erroneously assumed jurisdiction to hear and determine the 1st and 3rd Interested Parties Request for Review. It, therefore, follows that the decision made by the Respondent was unlawful for this reason,” the Judge said.

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