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Procurement agency on the spot over dam project tender

By Kiprotich Chepkoit | February 1st 2016

A company has raised concerns over the Public Procurement Oversight Authority's (PPOA) ruling in a tender row.

PPOA upheld a decision by the Kerio Valley Development Authority (KVDA) to award a dam construction tender to an Italian company amid claims of irregularities.

One of the bidders, Sosian Energy Consortium, says KVDA's decision disregarded procurement procedures and was arrived at in an opaque manner.

In its ruling during the review of KVDA's decision, PPOA dismissed the applicant's appeal, saying Sosian fully participated in the process.

"The board has looked at paragraphs 1 to 11 of the request for review and finds the applicant fully participated in the process and complied (with) every step," reads the board's ruling upholding KVDA's decision against awarding the company the tender.

The board's panel comprised Paul Gicheru who was the chairman, Nelson Orgut, Peter Ondieki, Josphine Mongare and Hussein Were.

Sosian, which is now planning to go to court, had applied for the review citing malpractices by KVDA. The company claimed KVDA acted in blatant disregard of the Public Procurement and Disposal Act 2005 and the Constitution during the evaluation and selection of winning bids.

"We have reasons to believe that the authority did not act fairly and impartially in the evaluation and selection of the winning bids," reads the letter by the consortium to PPOA.

KVDA had in December 2014 advertised (KVDA/RFP/38/2014-2015) requesting for proposal for funding, design, build and transfer of the proposed Embobut Multipurpose Dam Project. Interested bidders were expected to submit proposals before or on February 17, 2015. The opening dates were, however, rescheduled to March 18, 2015.

When the proposals were opened at the KVDA headquarters in Eldoret on March 18, eight bidders had submitted both technical and financial proposals including bid bonds as per the instructions. Sosian Consortium said the technical proposals were opened but the financial ones were not.

Four companies, which included Nari Group Corporation, Sinohydro Corporation Ltd, Cooperativa Muratori-Cementisti Di Ravena (CMCDR) and Sosian met the technical specifications.

"I am glad to inform you that after evaluation of your submission, your company scored 90 per cent of preliminaries and you have been shortlisted among three other bids to proceed to the second qualification stage," reads a letter to Sosian Consortium and signed by KVDA Managing Director David Kimosop, dated June 9, 2015.

Sosian said the introduction of the second Request for Proposals-stage two raised eyebrows, terming it illegal. The consortium argued that it learned of RFP Stage Two from a letter KVDA wrote to it informing them of the score in technical evaluation.

"The Request for Proposal document issued initially by the procuring entity did not inform bidders of the existence of a second stage. The closure date for the second stage bidding was September 15, 2015 but it was further extended to October 30, 2015," said the consortium's representative Henry Rotich.

Documents show during the tender period of the second stage, bidders were requested to conduct a feasibility study, prepare bills of quantities and confirm the viability of the projects. The bidders visited the site at different times, meetings between bidders and KVDA were held at different times and no minutes of such meetings were made available to all the bidders contrary to the law, according to Mr Rotich.

During the hearing of the review in Eldoret on January 14 and 21, it also emerged that the winning bidder had not adhered to the preliminary procedure of submitting a one per cent bond as advertised by KVDA. CMCDR, an Italian company with branch in South Africa, quoted Sh28.7 billion while Sosian Consortium had quoted the lowest with Sh11.4 billion. KVDA, in its own estimation of the cost of the project, had put it at Sh10.6 billion.

Though it was a requirement that one per cent bond be provided, CMCDR provided a bond of Sh256 million which is less than one per cent of its quote.

And despite PPOA's review board saying the consortium agreed to participate fully in the process, it emerged that KVDA did not answer to clarifications sought by bidders during the tendering period. "Clarifications sought by some of the bidders were not answered by the procuring entity and such clarifications were not shared to all the bidders as provided for in the Public Procurement and Disposal Act of 2005," said Rotich.

The aggrieved company also alleged that, "No invitation was issued to bidders who passed the technical stage to witness opening of financial proposals, contrary to the Public and Procurement Act of 2005," said Rotich.

"In our opinion the process was not fair and impartial. We believe that the procuring entity was compromised in this process and their actions were not transparent at all. This project is funded by the Government using taxpayers' money and it would be inappropriate to allow a process marred by irregularities to continue," added Rotich.

KVDA is also embroiled in another tussle over Arror dam and Water Cabinet Secretary Eugene Wamalwa has summoned the leadership to a meeting today at Maji house.

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