Tenders in Kenya offer extensive opportunities for businesses, especially those seeking to supply goods and services to government agencies and large organizations. The Kenyan government’s commitment to transparency through platforms like the Public Procurement Information Portal (PPIP) ensures that suppliers have access to a wide range of tenders across various sectors. However, despite these opportunities, suppliers face several challenges that can deter their success. In this detailed guide, we will explore the tendering landscape in Kenya, common pain points for suppliers, and strategies to overcome these barriers. We will also discuss how platforms like Tenderzville can be used to increase visibility and access to tender opportunities.
What Are Tenders?
A tender is essentially a formal request from an organization, typically a government entity but also a private organization, for suppliers to bid on the provision of goods, works or services. Tenders in Kenya are used for everything from small-scale services, such as catering or office supplies, to large infrastructure projects, such as road construction or building schools. In Kenya, the tendering process is governed by the Public Procurement and Asset Disposal Act (2015), revised 2022, which sets out the regulations for transparency, competition, and accountability in public procurement.
But first, catch up to the main revisions of the Public Procurement and Assets Disposal Act – 2022
a) The Inspection and Acceptance Committee
Section 48 (2) of the Procurement Act has been revised to specify that the inspection and acceptance committee must be appointed by the accounting officer or the head of the procuring entity, based on the recommendation of the head of the procurement function, rather than the procurement unit. This change emphasizes the use of the term “procurement function” instead of “procuring unit,” which is not defined in the Procurement Act. Additionally, the amendment clarifies that the head of the procurement function is responsible for recommending committee members for appointment.
Similarly, Section 51 of the Procurement Act, which addresses procuring and asset disposal agents, has been updated in Section 51 (2) (b) to replace “procurement and disposal unit” with “procurement function” for consistency, as “procurement function” is the term defined in the Act. A comparable modification was made to Section 114, where references to the procurement management unit were replaced with “procurement function.”
b) Transparency for tenders in Kenya
The 2022 Edition of the Procurement Act introduced significant amendments to Section 53, making it more progressive. Sections 53 (12) and 53 (13) now require the Accounting Officer of a procuring entity and the National Treasury to publish and publicize the approved procurement plans on the entity’s website and the state tender portal (https://tenders.go.ke/), respectively, as an invitation to treat.
Section 53 (11) clearly states that any state or public officer who fails to prepare procurement and asset disposal plans will face disciplinary action. This enforcement measure likely contributes to the compliance of procuring entities in preparing these plans. It might be beneficial to impose similar consequences on state/public officers who fail to publish and publicize procurement plans.
The Committee’s Report noted that the publication of procurement plans is a sub-indicator under transparency and public information, assessed during the Public Expenditure and Financial Accountability (PEFA) and the United Nations Convention against Corruption (UNCAC) evaluations, to which Kenya is committed.
Take a minute to confirm whether this is done at PPIP below: Government tenders in Kenya.,
c) Delay tactics suppliers, be warned: Penalizing Bidders for Misusing Review Requests
This is a big change. Section 41 of the Act now allows for banning bidders who make pointless or annoying review requests just to delay the procurement process or contract work. This new rule ensures that unhappy bidders can’t use the Review Board under Section 167 to slow things down. It adds another layer of deterrence, beyond just imposing costs on such bidders.
Additionally, Section 172 has been updated to include immediate banning by the PPRA for dismissing frivolous appeals with costs and forfeiture of deposit.
d) Duty to carry our market surveys
Remember the wheelbarrow saga? Tenders in Kenya are indeed sagas, but do you want the narrative to change?
Clause 54 was amended to introduce section 54 (2A) of the Procurement Act which provides that “the head of the procurement function shall carry out market surveys to inform the placing of orders or decision making on a procurement by the relevant awarding authority.” Section 54 (2B) introduced additional provisions on market surveys but specific to infrastructure projects.
Which reminds me, I did a tiktok video on this last year (2023) citing the fact that that ball seems to have been dropped. PPRA used to carry out market price surveys and had a list of current commodity pricesBut to date, PPRA have not updated their data, or I’m I injecting too much? Confirm
e)PPRA’s Power to Investigate and Inspect
The PPRA can now visit the offices of a procuring entity at a reasonable time to carry out investigations, inspections, assessments, and reviews related to procurement and asset disposal. If someone from the PPRA is not allowed in, they can get a warrant from a magistrate to enter, even using force if necessary.
Before, Section 43 didn’t require entry into premises or provide a way for the PPRA to act if entry was denied; it only allowed for inspection, assessment, review, or audit.
f) Final Tender Amount is Fixed :If mentioned, remains as is
Section 82 of the Procurement Act made the tender amount announced at the opening final, meaning it can’t be ammended or changed. This rule, introduced in 2015, aimed to stop secret changes that favored certain bidders.
In 2022, the note for Section 82 was changed to “Correction, revision, adjustment, and amendment of tender,” but it might have been clearer to mention “tender sum.”
Section 82 now has a new part, Section 82 (2), which says the final tender amount rule doesn’t apply to:
Direct Procurement (Section 103) because there’s only one bidder.
Competitive Negotiations (Section 131) because the amount can change during talks.
Framework Contracting and Multiple Awards (Section 141) because there’s no set tender amount.
Section 86, which explains how to pick the winning tender, was updated to say it doesn’t apply to framework contracting and multiple awards.
Section 89, about international tenders, was fixed to ensure local contractors get preferences under Section 155, not Section 85. Section 85 is about recommending awards, not preferences.
g) Advertising of Tenders in Kenya
This should be interesting considering the amount of tenders in Kenya that are not adertised.
Section 96 of the Procurement Act specifies how tenders should be advertised. Traditionally, tenders have been advertised on the Government tender portal (https://tenders.go.ke/), the website of the procuring entity, and in two newspapers with nationwide circulation.
The recent amendment to this section expands the advertising options to include at least two free-to-air TV and radio stations with nationwide reach. This change aims to ensure that Kenyans who may not have easy access to newspapers or the internet can still be informed about tender opportunities. This broader approach helps to increase participation and ensures that more people are aware of procurement opportunities.
h) Mandatory Notices for Expressions of Interest : Tenders in Kenya
In the 2015 edition of the Procurement Act, the requirement for the accounting officer to prepare a notice inviting expressions of interest under Section 119 was optional, using the word “may.” However, the 2022 edition has made this requirement mandatory.
Article 119 (1) of the Procurement Act now states, “An accounting officer of a procuring entity shall prepare a notice inviting interested persons to submit expressions of interest as prescribed.” This change ensures that the process is fair, transparent, and competitive, aligning with Article 227 (1) of the Constitution, which emphasizes cost-effectiveness.
This seemingly minor tweak has significant implications. By making the preparation of the notice mandatory, it ensures that all potential participants are given a fair chance to express their interest. This change promotes transparency and competition, which are key principles in public procurement. It also helps to ensure that the procurement process is conducted in a cost-effective manner, benefiting both the procuring entity and the public.
Still on Tenders in Kenya, and the next is:
i) Evaluation and Shortlisting for Consultancy Services – Tenders in Kenya
The 2022 edition of the Procurement Act introduced several important changes to Section 121, aimed at making the procurement of consultancy services more efficient:
Recording Evaluation Results: Previously, it seemed like the accounting officer was responsible for recording the evaluation results of expressions of interest. The amendment clarifies that this task belongs to the evaluation committee. This aligns with Section 46 of the Act, which outlines the role of the Evaluation Committee, and Section 121 (4), which states that the results should be submitted to the accounting officer for review and approval.
Proceeding with Fewer Proposals: A new Section 121 (5) allows the procurement process to continue even if fewer than the expected three proposals are received. This change helps to speed up and streamline the procurement process.
j) Selection Methods for Requests for Proposals – Tenders in Kenya
Section 124 (14), which required advertising for single-source selection, has been deleted. This is because it contradicted Section 124 (12), which outlines the conditions justifying single-source selection, such as when there is only one known supplier or a supplier with exclusive rights. These situations do not require advertising.
k) Publication of National Security Contracts – Tenders in Kenya
Section 138 ensures transparency and accountability by requiring the publication of procurement contract awards. The 2022 amendment to Section 138 (5) extends this transparency to defense contracts, limiting the exemption to only those awarded through classified methods and procedures under Part VIII of the Act. Previously, all contracts awarded by national security organs were exempt from publication. Now, contracts related to the open list under Section 90 (4) must be published as required by Section 138.
l) Quantity Variations Before 12 Months
The amendment to Section 139 (4) allows procurement contracts to be varied in terms of quantity at any time due to unforeseen circumstances. This was achieved by removing the previous limitation that variations could only be considered after twelve months from the contract signing date. However, the limitation on price variation remains unchanged under Section 139 (3), meaning no contract price can be increased within twelve months of signing. An increase in quantity does not necessarily mean a price variation when considering the price per unit.
m) Changes to the Evaluation Committee
The rules for who can be on the evaluation committee have changed. Previously, only the head of the procurement function could be the secretary of these committees. Now, the head of procurement can appoint another officer from the procurement function to be the secretary, as long as this appointment is made in writing.
This change allows the head of procurement to delegate their duties to another officer, but the delegation must be documented in writing. Without this written delegation, the committee would not be properly formed, making the evaluation invalid.
n) Exemption from Deposit and Filing Fees for Disadvantaged Groups
Section 167 (2) of the Procurement Act has been updated to exempt women, youth, persons with disabilities, and other disadvantaged groups from paying a deposit when filing a request for review at the Review Board for tenders in Kenya.
While this change is welcome, some stakeholders wanted Section 167 (2) to be completely removed because the deposit is quite high, even for regular bidders. This deposit is in addition to the filing fees required under Section 169. The deposit is returned to applicants if the Board does not find their request to be unnecessary or meant to cause delays. The purpose of the deposit is to discourage such requests.
Additionally, Section 169 has been amended to waive the filing fees for candidates under reserved procurements for women, youth, persons with disabilities, and other disadvantaged groups fortenders in Kenya. If the fees are not waived, the secretary will set the filing fees for these candidates.
Back to Tenders in Kenya: Types of Tenders
Tenders in Kenya can be broadly categorized into public and private tenders:
Public Tenders: These are issued by government ministries, parastatals, county governments, and other public entities. Public tenders are typically advertised on platforms like the PPIP, and they are subject to strict regulations to ensure fairness and transparency. Some common public tenders include construction contracts, supply of goods (such as stationery, vehicles, and medical supplies), and provision of services like IT support and cleaning.
Private Tenders: These are issued by private companies, NGOs, and international organizations. Private tenders may not be subject to the same level of regulation as public tenders, but they still require suppliers to meet strict criteria in terms of quality, delivery timelines, and cost.
Both public and private tenders offer significant opportunities for businesses in Kenya, but they also come with challenges that can hinder a supplier’s chances of success.
Pain Points for Suppliers in Kenya’s Tendering Process
1. Complex Documentation Requirements
One of the most significant barriers to entry for suppliers is the complex documentation required for tender applications. Most tenders require suppliers to provide a wide array of documents, including:
- Company registration certificates
- Tax compliance certificates
- Bid security or performance guarantees
- Financial statements
- Proof of previous work or references
Failure to submit any of these documents, or submitting incomplete or incorrect documents, can lead to immediate disqualification from the tendering process. For small businesses or new entrants to the tendering space, navigating these documentation requirements can be overwhelming.
2. Corruption and Lack of Transparency
Despite efforts by the Kenyan government to promote transparency through platforms like the PPIP, corruption remains a challenge in the tendering process. There have been numerous cases where tenders are awarded to companies with political connections or those willing to pay bribes. This can make it difficult for genuine suppliers to compete, especially when they do not have the same access to influential networks.
According to a report by the MIT Economics Department, corruption in public procurement in Kenya has resulted in inflated costs, substandard work, and delayed project completion. The report highlights the need for stronger oversight mechanisms to ensure that tenders are awarded based on merit, rather than favoritism [Read Document].
3. Financial Constraints
Many tenders require suppliers to provide a bid bond or performance guarantee, which can be financially burdensome, particularly for small and medium-sized enterprises (SMEs). A bid bond is a type of insurance that ensures the procuring entity will be compensated if the winning bidder fails to execute the contract. Similarly, a performance guarantee ensures that the supplier will complete the project as per the terms of the contract. These financial requirements can be a barrier for suppliers without access to sufficient capital or credit.
4. Lengthy Payment Delays
One of the most common complaints from suppliers who have won tenders is the issue of delayed payments. Government agencies and large organizations are often slow to pay their suppliers, leading to cash flow problems. For smaller businesses, delayed payments can severely impact their operations, making it difficult to pay staff, procure materials, or meet other financial obligations.
Strategies for Success in Tendering
Despite the challenges mentioned above, suppliers can adopt several strategies to increase their chances of success in Kenya’s tendering process:
1. Develop a Strong Business Profile
Before bidding on tenders, suppliers need to ensure that their businesses are well-prepared. This includes having all the necessary documentation in place, such as tax compliance certificates and company registration documents. Additionally, suppliers should invest in building a strong business profile by showcasing previous work and obtaining positive references from past clients.
2. Stay Informed
Staying informed about new tender opportunities is crucial for success. Suppliers should regularly monitor tendering platforms like the PPIP for public tenders and private platforms like TenderSoko and Tenders Kenya for private tenders. These platforms allow suppliers to search for tenders based on industry, location, and contract value. By staying informed, suppliers can ensure that they do not miss out on lucrative opportunities.
3. Build Relationships
In the tendering space, relationships matter. Suppliers should invest time in networking and building relationships with procurement officers, contractors, and other stakeholders in their industry. Attending industry events, joining business associations, and participating in supplier forums can help suppliers increase their visibility and build a reputation in the tendering community.
4. Prepare Financially
To overcome the financial barriers associated with tenders, suppliers should explore options for financing their bids. This could involve securing a loan from a financial institution, partnering with other businesses to pool resources, or working with an insurance company to obtain a bid bond or performance guarantee. Proper financial planning is essential to ensure that suppliers can meet the financial requirements of tenders without jeopardizing their cash flow.
5. Deliver High-Quality Work
For suppliers who win tenders, delivering high-quality work is crucial to securing future contracts. Procuring entities are more likely to work with suppliers who have a proven track record of meeting deadlines, staying within budget, and delivering quality goods or services. By exceeding expectations, suppliers can build a strong reputation in the tendering space and increase their chances of winning repeat business.
Opportunities with Tenderzville Portal
For suppliers looking to increase their visibility and access to tender opportunities, platforms like Tenderzville offer a valuable solution. Tenderzville is a supplier directory and tender aggregation portal that allows businesses to sign up and access tenders from a wide range of industries. By joining the Tenderzville directory, suppliers can showcase their capabilities to potential clients and increase their chances of being shortlisted for tender opportunities.
When it comes to tenders in Kenya, we are focusing on the privates sector.
Additionally, Tenderzville offers the following benefits for suppliers:
- Tender Alerts: Suppliers receive notifications about new tenders in their industry, ensuring they never miss an opportunity.
- Supplier Directory: Businesses listed in the directory can be easily found by procurement officers looking for specific goods or services.
- Resource Center: Tenderzville provides valuable resources and guides to help suppliers navigate the tendering process, from preparing bid documents to securing financing.
By signing up for the Tenderzville portal, suppliers can increase their chances of success in Kenya’s competitive tendering market with our Join Early Access presence as we work towards fostering partnerships with various stake holders, as well as sysstems that make sense and not focus on profit margins. Timeline, get to be ahead and in the know via our newsletters.
Sign up today: Supplier Directory and Early Access
Conclusion
The tendering process in Kenya offers significant opportunities for businesses, but it also comes with challenges that can be daunting for suppliers, particularly SMEs. From complex documentation requirements to financial constraints and corruption, suppliers need to be well-prepared to navigate these challenges successfully. By staying informed, building relationships, and leveraging platforms like Tenderzville, suppliers can increase their chances of winning tenders and growing their businesses.
For more information on current tenders, visit the PPIP portal or sign up for the Tenderzville supplier directory today and unlock access to a wide range of tender opportunities.
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