By James Anyanzwa and Njiraini Muchira
The powers of the Public Procurement Oversight Authority (PPOA) will be clipped in a new wave of reforms that seek to strengthen the public procurement process.
The latest are part of the recommendations for amending the Public Procurement and Disposal Act, 2005, which has overly been blamed for delayed implementation of public projects.
The appeals procedures under the Public Procurement Administrative Review Board (PPARB) will also be restructured to make it difficult for frivolous complainants to abuse the process.
Under the new reforms, a dedicated high court is to be established to handle procurement contract appeals while appellants seeking stay of execution of contracts in the high court will be required to pay a fee. Rogue contractors who have fleeced the Government billion of shillings through shoddy and inflated deals will be blacklisted and banned from participating in public tenders.
A case in point is the massive Sh94 billion Olkaria — a flagship project under Vision 2030 economic blueprint. Firms seeking to supply electric rigs for drilling wells for the 280 MW project initially delayed the plant following lengthy complaints and appeals.
Another Vision 2030 flagship project that has been thrown into jeopardy due to the cumbersome and stringent procurement rules in the standard gauge railway project.
Kenya Railways, the parastatal that was initially supposed to implement the project before it was taken over the Ministry of Transport, was forced to float tenders seeking for a consultant to carry out the preliminary design and environmental and social impact assessment services at least three times.
According to the Controller of Budget Ms Agnes Odhiambo, Kenya may not attain Vision 2030 goals due to failure to utilise development funds as a result of rigid procurement procedures and donor funding conditionalities.
Odhiambo blamed failure to spend the entire development budget to rigid procurement procedures and donor funding conditionalities.
“Our report shows that only 36.6 per cent of the development vote for the period July 1, 2011 to March 31, 2012 was spent,” Ms Odhiambo said. “This poor use of budgetary allocations is a worrying trend and one that jeopardises efforts aimed at achieving the Vision 2030,” she said adding that non-utilisation of resources results in non-provision of services to the public.
According to the new guidelines released by the Treasury’s directorate of Public Procurement, accounting officers will receive more powers to take charge of the entire procurement process and to make judgement over the procurement process.
Principle secretaries will also be granted more powers in the procurement process. These will include, among others, barring suspension of the procurement proceedings and preventing an abandonment of the on-going process, which have characterised the current system pending appeals by bidders.
“We want to look for a more efficient way of processing debarment. There are many rogue contractors that have to be debarred from procurement,” Celestine Otunga, a director at the Public Procurement Department told Business Weekly. According to the proposals, which are currently under review by working committees at the Treasury, beneficiaries of government contracts will have to pay tax.
It will also be illegal for any government agency, ministry, and department or parastatal to import anything, which can be manufactured by local industries.
According to the proposed regulations, PPOA will be strengthened to monitor public entities for compliance. Kenya Institute of Supplies Management will be reinforced to instil professionalism in public procurement through capacity building and enforcement of code of conduct for procurement professionals.
All public entities will be required to exercise affirmative action, reservation and preference in the award of government contracts. “We intend to make detailed provisions with enforcement and penalties for procuring entities that fail to comply with these provisions,” Ms Otunga said.
“We are reviewing these proposals through working committees. We will soon have a taskforce in place to prepare a draft with help of the Attorney General.” Ms Otunga pointed out that a new procurement law or a significantly overhauled law will be in place by the end of the year.
“We hope that by the end of the year we shall have a new law in place or the current law significantly overhauled,” she said. Delays in implementation of many public projects has been blamed on slow public procurement procedures, a situation made worse by a heap of numerous appeals filed by prospective bidders who fail to win public tenders.
While the Public Procurement and Disposal Act, 2005 has provisions that allow unsuccessful bidders to appeal; there is a growing feeling that some mischievous parties could be using this provision to frustrate the entire public procurement process. While the law allows a bidder 30 days to appeal when a tender has been awarded, this period is considered too short given the backlog of cases at the high court.
Mr Elias Mbau, MP for Maragwa and the chairman of the Parliamentary Budget Committee said while a lot of funds are allocated to the ministry of roads, only between 50-60 per cent of the budgetary allocation are utilised in a fiscal year mainly because of the lengthy procurement laws.
The State spends 10 per cent of GDP on procurements every year. It is, however, estimated that it loses one per cent of the GDP every year in inflated procurement contracts.
