ICPAK SCORECARD ON PUBLIC PROCUREMENT AND ASSET DISPOSAL ACT 2015

January 2016

INTRODUCTION

The Institute lauds the government for reforming the public procurement law to comply with the citizens’
needs and aspirations, the Constitution of Kenya 2010 and international best procurement standards. The
Institute is proud to have participated in the reform process by providing input at various stages of
enactment of the new law.

This scorecard provides an assessment of the extent to which ICPAK proposals were incorporated in the
Public Procurement and Asset Act 2015 and its potential impact. We are of the considered view that if well
managed, the public procurement system can contribute to a country’s economic development by
maximizing economy and efficiency. In addition, public procurement can form vital tool for improving
service delivery.

MAIN HIGHLIGHTS OF THE PUBLIC PROCUREMENT AND ASSET DISPOSAL ACT 2015

1. The new Act sets out an elaborate section on interpretations of terminologies. This is given a broader
perspective taking into account the devolved system of government.
2. Guiding Principles (Section 3)- The Act provides guiding principles for Public Procurement and Asset
Disposal for State organs and public entities. The Principles are based on values and principles of the
Constitution. These include maximization of value for money, incorporation of local content.
3. Public Procurement Governance: The Act has addressed governance well in accordance with the
international best practice, for instance
§ It vests powers to establish policy, systems and structures at macro level in the National Treasury,
§ The Act establishes the Public Procurement and Regulatory Authority (PPRA) to among other
functions, monitor, assess and review the public procurement and asset disposal system to ensure
they respect the national values and other provisions including Article 227 of the Constitution on
Public Procurement. This in essence transforms the Public Procurement Oversight Authority
(PPOA) from an oversight authority to a regulatory authority as a distinct regulator of procurement
related matters within the public sector with a governing board whose mandate would be to oversee
prudent procurement practices with the Director General of the Authority to undertake executive
role;
§ It has introduced an internal appellate system under the Administrative Review Board under the
Authority,
§ The Act has sought to streamline the appointment process for board members (overall and
Administrative Review Board), the Director General with clear tenures;

1 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
4. ICPAK Representation: The Act provides that ICPAK shall nominate one person for appointment to
the Public Procurement Regulatory Board (Section 10(2)); and three persons to the Public Procurement
Administrative Review Board (Section 29(2)).
5. Role of Accounting Officer (Section 44):-The Act under Sec 44 vests the power to oversee public
procurement in the hands of the Accounting Officer but acknowledges that the functional head of the
procurement unit shall be a procurement professional holding qualifications in procurement that is
recognized in Kenya;
6. General Principles of Procurement and Disposal (Section 53)- The Act outlines the principles as
follows:
§ All procurement entities shall develop annual procurement plans which shall be guided or
underpinned on approved budgets;
§ Annual asset disposal plans must be developed;
§ All procurements shall designate/reserve at least 30 per cent to women youth and People with
Disabilities
§ No procurement shall be commenced unless there is ascertained sufficient cash flow to carry through
the process to conclusion which includes settlement of supplier invoices... contravention of this
section is considered an offence

7. Split Procurement: Section 54 outlaws split procurements: The Act is clear that No procuring entity
may structure procurement as two or more procurements for the purpose of avoiding the use of a
procurement procedure except where prescribed.
8. Eligibility to bid: Section 55 defines capacity of persons to engage in tendering - tax compliance has
been given prominence
9. List of registered suppliers: The Act provides that the head of the procurement function of a procuring
entity shall maintain and update lists of registered suppliers, contractors and consultants in the
categories of goods, works or services according to its procurement needs
10. Limitation on contracts with state and public officers(Section 59) : A State Organ or public entity
shall not enter into a contract for a procurement with a public officer or state officer or a member of a
committee or Board of that State organ or public entity; or an officer of that public entity or state
organ;
11. Use of ICT (Section 64) has provided for use of ICT in communicating matters relating to
procurements – this is a clear shift from the previous requirement to have procurement communication
run through newspapers of national circulation;
12. Definition of a “relative”: Section 66 (11) of the Act has defined “relative” for purposes of
establishing conflict of interest to include spouse, child, parent, brother, sister or a child, parent,
brother, sister of a spouse.
13. Record Keeping: Section 68 requires appropriate record keeping at all stages of the procurement
process.

2 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
14. Opening of Tenders: Section 78 provides for the Accounting officer to appoint a Tender opening
committee comprising of at least three members and members of the tender opening committee shall
not be involved in the tender evaluations. Deliberations of the tender opening committee shall be
communicated in minutes to be signed by all members with initials on each page of the minute
document.
15. Evaluation of tenders :The Accounting officer in accordance with Sec 46 shall appoint ad-hoc
evaluations committees and shall cause to be followed, an objective and quantifiable evaluation criteria
16. Procurement Methods: Part 9 of the Act provides an elaborate array of procurement methods over
and above the three methods prescribed under the old Act, to include: Open tender, Two stage
tendering, Design competition, Restricted tendering, Direct procurements, Requests for quotations,
Electronic reverse auction, Low value procurement, Force account, Competitive negotiations, Request
for proposals and Framework agreements. It is noted that by the new Act under Section 93, pre-
qualification is restricted to apply for complex and specialized goods, works and services
17. Procurement of Consultancy Services: Part 10 of the Act stipulates the method and process for
procurements of consultancy services. The Procuring entity may use a request for proposals in
combination with other methods of procurement.
18. Contracts Management: Part 11 provides for contracts management and under Sec 134, it is the
responsibility of the Accounting Officer and that any contract exceeding KES 5 billion shall have to be
cleared by the Attorney General before they are signed and all CS undertaking such contracts (above
KES 5 billion) shall be called upon to provide briefs to the Cabinet on the nature of such contracts.
Section 138 requires the accounting officer to publicise all contract awards on their notice boards
19. Preferences and Reservation in Procurement: Part 12 make provisions guiding preferences and
reservations. This Part speaks to preference given to manufactured articles, materials and supplies
partially mined or produced in Kenya; firms where Kenyans are shareholders; and protecting and
ensuring the advancement of persons, categories of persons or groups previously disadvantaged by
unfair competition.
20. Inventory Control and Asset Management: Part 13 addresses itself to inventory control, asset and
stores management for efficiency. Section 161 provides that an accounting officer shall cause to be
established an inventory management system to be managed by the head of procurement function;
21. Disposal of Assets: Part 14 provides for disposal of assets and provides that the accounting officer
shall establish ad-hoc disposal committee as and when necessary to verify and process unserviceable,
obsolescent or surplus assets with the guidance of the head of procurement function.
22. Administrative Review Procedures: Part 15 provide for administrative review procedures by which
an aggrieved tenderer shall within fourteen days of notification of award, lodge complaint with the
board. It provides for the review board secretariat to facilitate the review board hearings;
23. Offences and Sanctions: Part 16 provide for offences and sanctions and specifies fines not exceeding
KES 4 million for natural persons and KES 10 million for body corporate for contravention of any
provisions of the law and also open to the consequences of the administrative action.

3 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
Annex 1: Summary of the scorecard
Section Public Procurement & Asset ICPAK Submissions Implications & General
Disposal Act 2015 comments
Part I: Preliminary
1. Section 3: The Act provides guiding ICPAK had proposed the Though the proposal to include
Guiding principles for Public inclusion of an additional the additional principle was not
Principles Procurement and Asset Disposal principle on incorporated, this section is
for State organs and public interrelationship between important in ensuring that the new
entities. The Principles are the two levels of Public Procurement and Asset
based on values and principles government as provided Disposal law is now in line with
of the Constitution for under Article 6(2) and Constitution of Kenya 2010.
189 of the Constitution
Part II: Bodies Involved In The Regulation Of Public Procurement And Asset Disposal
2. Section 7: Role This Section expressly provides The Institute was There might be issues of
of the National the functions and responsibilities concerned that the section duplication and overlap between
Treasury on of the National Treasury in included some technical the National Treasury and the
Public regard to Public Procurement. and operational functions. Public Procurement Regulatory
Procurement Most of these functions are We proposed that the Authority (PPRA) especially on
and Asset policy-oriented, such as technical functions be technical and operational
Disposal developing and promoting policy assigned to the Public functions.
guidelines and standards around Procurement Regulatory
public procurement Authority (PPRA).
3. Section 8: Public The Act establishes the PPRA to The Institute did not have The PPRA replaces the
Procurement among other functions, monitor, major concerns but wanted PPOA.There’s not much
Regulatory assess and review the public a proper demarcation of difference in terms of functions
Authority procurement and asset disposal responsibilities on public between the new Public
system to ensure they respect the procurement Procurement Regulatory
national values and other policy/operations between Authority (PPRA) and the Public
provisions including Article 227 the PPRA and the National Procurement Oversight Authority
of the Constitution on Public Treasury. (PPOA). However, we can seek to
Procurement. further strengthen the new body
through the Procurement
Regulations and guidelines
4. Section10: Public The Act establishes the Board to The Institute had proposed ICPAK submissions were
Procurement among other functions ensure the the need to provide considered. This is a good
Regulatory proper and effective performance adequate mix of skills practice for efficiency and proper
Board of the functions of the Authority. borrowed from members of delivery of public procurement
diverse professional services in Kenya.
The Board consists of backgrounds.
(1) a Chairperson nominated by In addition, ICPAK shall
the Cabinet Secretary and nominate one person for
appointed by the President appointment to the Board
(2) four members who shall be
appointed by the Cabinet
Secretary after nomination,
through a fair process, by
i. the Law Society of
Kenya;
ii. the Institute of Certified
Public Accountants of
Kenya;

4 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
 iii. the Kenya Institute of
Supplies Management;
iv. the Association of
Professional Societies
in East Africa,
(3) two other members
representing the youth and
People with disabilities
(4) The Cabinet Secretary or his
or her representative
(5) The Attorney-General or his
or her representative.
5. Section 13: The Act provides that a member
Tenure of Office of the Board of the Authority
including the chairperson shall
hold office for a term of three
years but shall be eligible for re-
appointment for a further term of
three years.
6. Section 26: The Section provides that for
Annual reports each financial year, the Board
shall cause an annual report to be
prepared.
The Board shall submit to the
Cabinet Secretary the quarterly
reports within thirty days after
the end of the quarter and the
annual report within three
months at the end of the year to
which the report relates
7. Sections 27 Sections 27 Act establishes the
Public Public Procurement
Procurement Administrative Review Board to
Administrative review, hear and determine
Review Board tendering and asset disposal
disputes; and other related
sections
5 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
ICPAK had proposed that
the tenure of office for
Board members be
staggered for continuity
and succession planning
purposes as a good
corporate governance tenet
The Institute had proposed
that the section be
amended to provide for
the creation of Finance
Committee; and Audit,
Risk and Governance
Committees of the board
We were concerned that
that establishment of
another autonomous
institution to the Authority
may lead to duplicity of
functions and strain the
current overstretched wage
Bill.
Subsequently, we
proposed an amendment to
the entire section on the
Public Procurement
Administrative Review
Board , to make the
Review Board a
Committee within the
Public Procurement
This section disregarded our
proposal on staggered retirement.
As such, we anticipate disruptions
to activities of the Board and
Authority once the term of Board
members expires.
This calls for further advocacy on
this matter through the Public
Procurement Regulations
It is good practice that annual
reports be presented by the
chairman of finance committee of
the board. Audit Risk and
Assurance committees play vital
role in instilling financial
discipline and enhancing good
corporate governance practices.
There’s still room for further
input in the Public procurement
framework through the
anticipated regulations.
We are still concerned that that
establishment of another
autonomous institution to the
Authority may lead to duplicity of
functions and strains to the wage
Bill.
 Regulatory Board

8. Section 29(1): The Act provides that the The Institute had There’s an opportunity for
Composition of Review Board shall comprise of recommended amendment ICPAK representation in the
the Review the following 15 members who to the entire section to Review Board.
Board shall be appointed by the Cabinet make the Review Board a
Secretary taking into account Committee within the The Institute should be on the
regional balance and gender PPRB. look-out for the regulations and
parity nominate the three(3) members to
(a) A chairperson whose the Review Board
qualifications and
experience shall be as that of
a Judge of the High Court
(b) Fourteen other members
whose qualifications and
experience shall be as
prescribed in the regulations
9. Section 29(2): 29(2) A person appointed as a As above There’s an opportunity for
Composition of member under subsection (1) ICPAK representation in the
the Review shall be nominated by the Review Board.
Board following professional bodies
from amongst their members as The Institute should be on the
follows— look-out for the regulations and
a) Three persons nominated by nominate three(3) members to the
the Law Society of Kenya; Review Board
b) One person nominated by
the Chartered Institute of
Arbitrators, Kenya Chapter;
c) Three persons nominated by
the Kenya Institute of
Supplies Management;
d) Three persons nominated
by the Institute of
Certified Public
Accountants of Kenya
e) Four persons nominated by
the Association of
Professional Societies in
East Africa, provided that
the appointed nominees are
not members of professional
bodies mentioned above
10. Section 31: Unlike for the Board(under ICPAK had proposed that Good provision, ICPAK
Tenure of Office Section13), the Act in this the tenure of office for proposals incorporated. This
section provides the following Board members be provision is in line with the
for the Review Board: staggered for continuity Mwongozo Code on succession
and succession planning planning and continuity.
(1) The Chairperson and the purposes as a good
members of the Review corporate governance tenet
Board shall hold office for

6 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
 a term of three years and
shall be eligible for a
further term of three years

(2) For continuity of the

Review Board's
functions and
responsibilities, the
appointment of the
Review Board Members
shall be on a staggered
period of six months
Part III- County Government Responsibilities With Respect To Public Procurement And Asset Disposal
11. Section 33: The Act outlines the roles and The Institute was
Roles and responsibilities of County
Responsibilities Governments in respect to
of County Public Procurement.
Governments
Since this was not considered, it
concerned with the lack of will be imperative for the Institute
a proper and strong linkage to take up this matter through the
between the County Public Procurement Regulations.
Governments, the
Authority and National This in essence will ensure that
Treasury on Public County Procurement Departments
Procurement policy maintain linkage with the
decisions and operation Authority while at the same time
respecting the devolved system of
We recommended government
amendment of functions of
County Treasuries to
ensure they consult and
liaise with the National
Treasury and the Authority
on procurement policy

Part IV-Powers To Ensure Compliance

12. Section 39: The new law provides that the
Request for a procuring entity and any other
Judicial review person who was entitled to be
given an opportunity to make
representations, may request for
Judicial Review against an order
of the Board to the High Court
within fourteen days after the
order is made
ICPAK in its earlier The import of the ICPAK
proposals was concerned proposal was to ensure that all
that the order of appeal available review and appeal
fails to exhaust all the channels are exhausted before
available channels before appeal to the High Court.
resorting to Court/Judicial However, we can still take up the
intervention. issue through the Regulations
We had recommended that
the procuring entity and
any other person who was
entitled to be given an
opportunity to make
to the Review Committee;
and if unsatisfactory,
request for Judicial
Review against an order of
the Board to the High
Court

7 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
13. Section 41: The Act provides grounds for This is good practice. This is good practice.
Debarment debarment of a person from
participating in procurement or We hope the Public We hope the Public Procurement
asset disposal proceedings. Procurement Authorities Authorities will enforce this
will enforce this to ensure provision to ensure accountability
They include: accountability and and efficiency in the Public
(1) Has committed an offence efficiency in the Public procurement and Asset Disposal
under this Act; procurement and Asset proceedings.
(2) Has committed an offence Disposal proceedings
relating to procurement ICPAK has a public interest duty
under any other Act or of monitoring to ensure
Law of Kenya or any compliance and implementation
other jurisdiction;
(3) Has breached a contract
for a procurement by a
public entity including
poor performance;
(4) Has in procurement or
asset disposal
proceedings, given false
information about his or
her qualifications;
(5) Has refused to enter into a
written contract as
required under section
135 of this Act;
(6) Has breached a code of
ethics issued by the
Authority pursuant to
section 181 of this Act or
the code of ethics of the
relevant profession
regulated by an Act of
Parliament;
(7) Has defaulted on his or
her tax obligations;
(8) Is guilty of corrupt or
fraudulent practices;
(9) Is guilty of a serious
violation of fair
employment laws and
practices.
Part VI -General Procurement And Asset Disposal Principles
14. Section 66: The Act provides that a person The Institute proposed an This proposal was not considered
Corrupt, of whom this Act applies shall additional subsection in the enacted law. We can still
Coercive, not be involved in any corrupt, requiring the Procuring lobby for it in the Regulations and
Obstructive, coercive, obstructive, collusive entities to establish a subsequent guidelines
Collusive or or fraudulent practice; or register of interests.
Fraudulent conflicts of interest in any
Practice, procurement or asset disposal This will act as means of
Conflicts of proceeding. verification of interests;
Interest and in build the culture of
accountability in the public

8 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015

15. Section 68: The Act provides that an
Procurement accounting officer of a procuring
Records entity shall keep records for each
procurement for at least six years
after the resulting contract has
been completed or, if no contract
resulted, after the procurement
proceedings were terminated
16. Section 68(4) : Sub Section 4 provides that the.
Procurement The accounting officer of a
Records procuring entity may charge a
fee for making the records
available but the fee shall not
exceed the costs of making the
records available to any person.
Part XVII: Repeal, Transition And Savings Provisions
17. Part XVII: This section provides Transition
Repeal, and Savings Provisions for the
Transition And existing offices and institutions
Savings such as the Public Procurement
Provisions Advisory Board and Public
Procurement Oversight
Authority (PPOA).
9 ICPAK Analysis of the Public Procurement and Asset Disposal Act 2015
procurement process.
We had argued that 6 years
as provided by Act for
keeping of procurement
records may not be
sufficient. We further
proposed that the section
be amended to read, “for
at least 10 years”
The Institute had argued
out that it is difficult to
establish the cost for
availing records.
We subsequently proposed
amendment to this section
to require the Procurement
entity to charge a fee not
exceeding Ksh. 20, 000”
ICPAK argued that the
provisions were
inadequate. We proposed
the provision of Savings
and Transitional Provisions
for the Advisory Board and
institutions that existed
before the commencement
of this Act
It is our considered opinion that
some items with tax implications
might require the Commissioner
to make reference to procurement
records.
It is imperative for consideration
to amend the section to align it
with the Income Tax Act(Section
55(2)) for purposes of taxation,
especially for a procurement
matter that might have
implications on tax
To avoid charging exorbitantly
for availing records, there’s need
for the Institute to continuously
engage on this matter through the
Regulations.
Availing records and information
is a key tenet of the Constitution
(Art 35) and thus should be
facilitated.
This ensures smooth transition
and continuity on public
procurement proceedings. For
instance
(a) any undertaking or
responsibility falling on the
Public Procurement
Oversight Advisory Board
shall be assumed by the
Public Procurement
Regulatory Board
(b) any undertaking or
responsibility falling on the
Public Procurement
Oversight
Authority(PPOA) shall be
assumed by the Public
Procurement Regulatory
Authority(PPRA)