De La Rue beat German firm Giesecke & Devrient, Crane Currency and Oberthur Fiduciaire of France last year to the lucrative contract for printing new notes that are in compliance with the Constitution.
The CBK in a statement yesterday said it would appeal the review board’s decision at the High Court.
The tenders watchdog ruled that De La Rue did not qualify for the preference margin of 15 per cent applied, adding that the British printers was not the lowest evaluated bidder.
The Central Bank of Kenya (CBK) has been put on the spot after the procurement watchdog nullified the award of a Sh10 billion-a-year tender for printing of the new-look currency to British firm De La Rue International.
The Public Procurement Administrative Review Board (PPARB) yesterday terminated the contract following a week-long hearing in which Swedish firm Crane AB, through lawyer James Gitau Singh, accused the CBK of breaching the law in awarding the deal to De La Rue by giving it a 15 per cent margin preference for having local shareholding.
De La Rue beat German firm Giesecke & Devrient, Crane Currency and Oberthur Fiduciaire of France last year to the lucrative contract for printing new notes that are in compliance with the Constitution.
The CBK in a statement yesterday said it would appeal the review board’s decision at the High Court.
The PPARB panel comprising of chairman Paul Gicheru, and members Hussein Were, Peter Bita Ondieki, and Paul Ngotho called the process of the award to De La Rue “unlawful”, saying the CBK abused the 15 per cent local preference clause.
“De La Rue International Limited was unlawfully awarded the tender for the printing and supply of the new design Kenya currency and bank notes and the application of a 15 per cent preference margin in its favour was unlawful,” ruled the board. “The award of the said tender is hereby annulled.”
The board further directed the CBK to make a fresh evaluation of the tenders submitted to it within a fortnight.
“(CBK) is directed to undertake a fresh evaluation of all the tenders submitted to it by all the four bidders who participated in the tender process herein and complete the said process within a period of fourteen days,” the board said.
The tenders watchdog ruled that De La Rue did not qualify for the preference margin of 15 per cent applied, adding that the British printers was not the lowest evaluated bidder.
De La Rue has had a stranglehold on the Kenya’s lucrative money printing business except for the period between 1966 and 1985 when notes were printed by UK firm Bradbury Wilkinson, later acquired by De La Rue.
The ruling marks yet another botched contract by the CBK.
It means Kenyans have to wait longer for a new-look currency. The production of new currency notes that do not bear the images of former presidents was supposed to start after passage of the 2010 Constitution.
The supreme law prohibits the use of an individual’s portrait on legal tender. The replacement of the old currency notes will cost Sh18 billion, according to CBK estimates. The CBK, which was represented by lawyer Ochieng Oduol, had sought to have the case heard in camera, citing national security concerns.
The case was seen as an acid test for the bank, which has never successfully floated a competitive international currency printing tender since it was established in 1966.
The procurement agency warned on Monday that the CBK going forward must comply with the law in subsequent tendering.
“The (CBK) shall take into account the board’s observations on the issue of preference together with the provisions of Sections 82 and 86(1)(a) of the Public Procurement and Asset Disposal Act,” said the agency.
In arguing its case, Crane AB claimed that Kenyans stood to lose nearly Sh1 billion as the award was not given to the lowest bidder.
“The procuring entity (CBK) failed to give all tenderers an open and transparent opportunity at winning the award, thus compromising the integrity, fairness, transparency and accountability of the process in violation of the stated objectives of the Public Procurement and Disposal Act 2005 as enumerated in Section 2 of the said Act and Article 227 of the Constitution of Kenya,” argued Crane AB.
De La Rue had quoted $112 million (about Sh11.6 billion) for printing and supplying the notes while the Swedish firm had quoted $105 million (about Sh10.9 billion).
