Public procurements and disposals in Kenya are governed principally by Public Procurement and Disposals Act, Chapter 412C, of the Laws of Kenya.
In view of the fact that parties involved in procurement process may be aggrieved by the manner of conduct if the process, the law permits any of the party to ventilate any grievance arising from a procurement by way of request to the Public Procurement Administrative Review Board (hereinafter called “the Board”). The Public Procurement and Disposal Act mandate the Public Procurement Administrative and Review Board to consider and determine disputes arising from procurement proceedings. In discharge of its mandate, section 98 of the Public Procurement and Disposal Act gives the Board the discretion to:
- annul a decision of the Procurement Entity;
- give directions on what it to be done or redone;
- substitute the decision of the procuring entity; or
- make an order of payment.
However, there have been occasions where parties who appear before the Board decline to comply with orders and directions of the Board, for instance, orders prohibiting or directing the undertaking of an action related to procurement proceedings.
When, for instance, the Board has directed a Procuring Entity to re-evaluate a tender of the Applicant (complainant before the Board), the Procuring Entity cannot purport to instead unilaterally decide to terminate the tender or even to retender.
Should a Procurement Entity disregard the express orders of the Review Board, such action by the Procuring Entity violates the mandatory provisions of the Procurement Act and any retender of the same project done by the Procuring Entity and subsequent actions will be null and void.
So what are the remedies available to cure such a breach?
It is important to state at the outset that after the Board’s ruling on any request for review involving procurement proceedings, the Review Board becomes functus officio and any aggrieved party can only have recourse to the High Court either on Appeal or through Judicial review.
Indeed a cursory look at Section 100(1) of the Act reveals that the decision of the Review Board is final and can only be challenged in the High Court. This provision does not therefore leave it open for any party to disobey the order of the Review Board as it is only the High Court that can issue an order stopping the implementation of the Board’s decision.
Does the filing of a Request for Review inoperationalize section 36 of the Act?
Section 36 of the Public Procurement and Disposal Act does provide that a Procuring Entity may terminate the procurement proceedings at any time without entering into a contract. The question that begs an answer is: beyond what point can’t a procurement entity decide to terminate the procumbent proceedings? A logical interpretation would indicate that the option of termination is only available to the procurement entity when no review regarding the procurement has been filed before the Review Board.
This position is applicable in circumstances where the procurement proceedings have not been completed and a final successful bidder selected by the Procuring Entity. Its import may include, for example, where there are errors in the procuring process that the Procuring Entity needs to correct to bring the procurement proceedings within the required needs of the Procuring Entity or correct an illegality in the process before the procurement process is finalized.
It is worth noting that once the tender process has reached the Public Procurement Review and Administrative Board, parties are expected to abide by the orders given by the Board. Accordingly, the filing of review against a decision taken by the procurement entity automatically ousts the operation of section 36(1) of the Procurement Act, and a procuring entity cannot purport to terminate the procurement (including a review before the Board) by invoking the provisions of Section 36 of the Act.
So when should the termination occur?
According to section 93(2) of the Act, whereas the Board has power to hear and determine the administrative reviews filed before it by a Party, such powers cannot be exercised where a Procuring Entity has terminated the proceedings under section 36 of the Act. Essentially therefore, the Board’s decision cannot be obtained where the proceedings were terminated earlier by the Procuring Entity.
What happens after the Board’s hearing?
As indicated hereinabove, the powers of the Review Board are clearly set out in section 98 of the Act. Where the Board nullifies an award of a tender and order for re-evaluation, an applicant would be entitled to participate in the financial evaluation.
The object of the Procurement Act is to ensure that public bodies procure goods and services in an open and transparent manner. These entities are therefore supposed to adhere to the principles set in the Act.
The objectives of the Act are contained in Section 2 and enumerated thus:
1. to maximize economy and efficiency;
2. to promote competition and ensure that competitors are treated fairly;
3. to promote the integrity and fairness of those procedures;
4. to increase transparency and accountability in those procedures;
5. to increase public confidence in those procedures; and
6. to facilitate the promotion of local industry and economic development.
Accordingly, all the participants in procurement proceedings are expected to promote these principles.
When a Procuring Entity therefore unilaterally decides to, for instance, re-tender instead of re-evaluating tenders as per the direction of the Board, it breaches these principles.
This is because:
a) firstly, re-tendering would not promote the integrity and fairness of the process as the Board has already ordered a re-evaluation; and
b) secondly, it would be costly and this would be tantamount to misuse of public funds.
c) thirdly and most crucially, it would not promote completion. This comes about in the sense that should there be a re-tendering, a party who challenged the initial award and thus occasioned the Procuring Entity to be ordered to re-evaluate is likely to be treated unfairly or prejudiced against.
Moreover, the process of retendering would highly prejudice the bidder whose bid ought to be admitted for re-evaluation. This flies in the face of the cardinal principle of legitimate expectation.
Indeed, anybody aggrieved by the decisions of the Review Board in these proceedings ought to challenge that decision in the High Court as per the provisions of section 100(3) of the Procurement Act.
What are the duties of the Procuring Entity upon order of re-evaluation?
Under section 98 of the Act, the Review Board may order a re-evaluation of a tender by the Procuring Entity. Once the Procuring Entity has been ordered to re-evaluate a bidder, it has to strictly abide by the order of the Board and any act that it does contrary to the order will be null and void as per the clear provisions of section 100(3) of the Procurement Act.
At this point, therefore, actions such as retendering and any purported termination under section 36 are null and void.
In fact, the Procuring Entity at this stage cannot legally enter into another procurement process relating to the same supply without first executing the order of the Board.
Section 45 of the Act expects the Procuring Entity to keep all the materials related to tender process for up to 6 years after the resultant contract has been entered into. It is therefore unfathomable that the Procurement Entity could argue that it is unable to implement the Board’s order because it lacks the tender documents needed for re-evaluation!
Tender security should also not be released where a Procurement Entity has been ordered to re-evaluate the tender. Therefore, the provisions of section 57 of the Act cannot be invoked by a Procuring Entity at the stage of complying with a Court Order.
As the law stand today, any attempt by the Procurement Entity to terminate procurement and to retender, where the Board has ordered for a re-evaluation, would be unfair, invalid, and null and void and a gross abuse of office.
What are the available remedies Where a Procuring Entity Declines to follow the Order of the Review Board?
The Public Procurement Administrative and Review Board is the body empowered to consider reviews that relate the procurement undertaken by public institutions. These institutions are therefore under an obligation to ensure that they follow the provisions of the Procurement Act and to generally ensure the interest of the public are protected and the objects of the Act (as contained in Section 2 of the Act) in these proceedings are realized.
Moreover, Bidders have legitimate expectation that procuring entities will, in the public interest and in the spirit of the objectives of the Act, faithfully follow the directives of the Board issued pursuant to section 98 of the Public Procurement and Disposal Act.
Failure by a public entity to act in accordance with the Board’s decision would therefore attract judicial review remedies such as prohibition, mandamus and or certiorari.
It is therefore our advice that a party who successfully appealed against an awarded of a tender could move the High Court under Judicial review and seeks orders of mandamus and prohibition.
The mandamus orders will be to compel a Procuring entity to implement the order and direction of the Review Board. By so doing the procuring entity will have to, for instance, re-evaluate the tender, if that is the order of the Board.
According to Admistrative Law 8th Edition HWR & C.F FORSYTH page 604-5
“ the commonest employment of mandamus is as a weapon in the hands of the ordinary citizen, when a public authority fails to do its duty by him…mandamus deals with the wrongful inaction...
Disobedience to a mandamus is a contempt of court, punishable by fine or imprisonment. A mandamus is therefore very like a mandatory injunction: both are commands from the Court that some legal duty be performed. But the two remedies have different spheres.
The injunction is an equitable remedy, and it is rare to find mandatory injunctions outside private law. Mandamus is a common law remedy, based on royal authority, which is used only in public law”
An order of prohibition would prohibit the Procuring Entity from, for instance, re-tendering, and thereby preventing the invitation of other bidders to participate in a fresh tender. In Administrative Law, prohibition prevents a public body from proceeding in any matter outside their jurisdiction. An aggrieved party in a procurement process can therefore consider Judicial Review as way of addressing this issue.
We trust that the above legal advice will be useful to you in your decisions regarding public procurement. However, should you have any further queries regarding public procurement law, practice and related issues in Kenya, please do not hesitate to contact us at email@example.com for clarification. You may also call us on + 254 715 310 677.
For: Strategic Legal Solutions Group LLP
Patrick, Teddy & Partners Advocates – a participating Law Firm in the SLS Group of consultancies.