The Kenya Revenue Authority’s (KRA) cost for cleaning and garbage services will double to Sh859 million, after the procurement board stopped its plan to award a single firm part of the contract while blocking three others.
KRA had budgeted Sh424 million for the two-year contract covering eight lots in its offices and residential houses, which saw four firms shortlisted to provide the services.
When the taxman realised submitted bids exceeded its budget, it decided to terminate bids on five lots and only award three lots that were bid by a single firm, a decision the Public Procurement Administrative Review Board (PPARB) nullified and asked it to award all companies as per their bids.
“The 1st Respondent (KRA Commissioner-General) be and is hereby directed to reconvene the Evaluation Committee for purposes of forwarding the Evaluation Report dated March 15, 2024 in respect of Tender No KRA/HQS/NCB-034/2023 for Provision of Cleaning and Garbage Collection for KRA Offices and Residential Houses Countrywide for a period of two years to the head of the procurement function for preparation of a Professional Opinion having regard to the Board’s findings in this Decision."
“Further to order 5 above, Tender No KRA/HQS/NCB-034/2023 for Provision of Cleaning and Garbage Collection for KRA Offices and Residential Houses Countrywide for a period of two years be allowed to proceed to its lawful and logical conclusion having regard to the Board’s finding in this Decision,” the Board directed in a decision on August 9, 2024."
The Board’s decision followed an application by Peesam Limited, one of the shortlisted firms, which sought PPARB’s intervention after it was knocked out of the tender.
KRA advertised the tender in February, and four firms made the cut to provide the services for two years.
The four- Kamtix Cleaners Limited, Saafi Cleaning Company Limited, Colnet Limited and Peesam Limited- were to provide services across eight different lots.
After KRA’s tender evaluation committee recommended award of the contract to the four companies, however, a KRA official in the supply chain management asked for a re-evaluation of the tender, which resulted in five bids won by Peesam, Saafi and Colnet being cancelled, as Kamtix was awarded part of the contract for three lots.
Peesam filed the request for review at the PPARB on July 19, complaining that after KRA’s evaluation committee concluded the procurement for the tender, the taxman’s supply chain management deputy-commissioner returned the report to the committee instead of forwarding it to the Commissioner-General.
It was after the report was returned to the committee that Peesam was knocked out on grounds of its NSSF documents being non-compliant, a decision it faulted as a nullity.
KRA told the Board that on top of Peesam failing to meet requirements, it lacked enough budget to implement the contract after bidders submitted rates far more that its Sh424 million planned budget for the two years.
The Board, however, faulted KRA’s claim of insufficient budget for cancelling part of the tender, questioning the criteria it used to award only lots won by a single firm, when it indicated to have not had specific budgets for the eight lots, within its Sh212 million overall annual budget for the tender.
“It may well be that the sum tender prices quoted by the lowest evaluated tenders under the 7 Lots surpassed the budget of Sh212 million but the Board found great difficulty in following through the Procuring Entity’s decision to issue award letters in respect of Lots 1, 4 and 6 of the subject tender when the said Lots were also part of the subject tender which evidently had inadequate budgetary provision,” the Board said.
It termed KRA’s decision to hand-pick only bids where Kamtix won while terminating where other firms had won illogical.
“The awarded Lots were all made to a single tenderer, Kamtix Cleaners Limited, while the rest of the Lots terminated. It may well be that the tenderer submitted responsive tenders in all the different lots but the award of tenders only in lots that this single supplier was the successful tenderer while ignoring the rest is of itself questionable,” it said.
PPARB also rejected KRA’s claim to lack money to fund the cleaning and garbage services at the cost bid by the four firms.
It also faulted KRA’s disqualification of the award to Peesam on grounds that its NSSF documents failed to meet tender requirements, observing that KRA’s head of procurement stepped out of his mandate.
“The Board therefore finds fault in the Head of Procurement function’s direction for the re-evaluation of the tenders in the subject tender that subsequently culminated in the disqualification of the Applicant,” the Board stated.
The Board also found that whereas the KRA set aside Sh424 million for the tender, the combined sum of the lowest tender prices for seven of the eight lots alone was Sh744 million. Peesam, which won lot 8 of the tender, bid Sh115.4 million, which would see the overall cost rise to Sh859 million.
