Insights into the Public Procurement & Asset Disposal Regulations, 2020
The Procurement and Asset Disposal Act, 2015 (the “Act”) establishes the procedures for the procurement and disposal of unserviceable, obsolete or surplus stores and equipment by public entities.
Just as the Constitution of Kenya is the backbone of all laws of the land, the Constitution anchors the values and principles of procurement and of public services which at the heart, call for efficiency, effectiveness, transparency and provision of timely information, responsive, and prompt provision of services. The Constitution paved the way for various developments in the laws that provide for services offered by state organs and public entities. These developments saw the digitization of public services and the procurement law was a beneficiary of this process, which led to the enactment of the Act.
The Act itself embodies the substantive provisions on procurement process while the Public Procurement and Asset Disposal Regulations, 2020 (the “Regulations”) breathe life by providing procedural guidelines on the procurement processes from the invitation to bid, submission of bids, clarifications, evaluation, ranking and finally to the award of contract.
Though the Act came into force in 2015 introducing electronic means of procurement for public entities by e-tendering, the Regulations, which were then in draft format, were not passed into law. This created a fuzzy situation with no fall back provision to provide clear guidelines on how the e-procurement process was to take place. The Regulations have now been enacted into law with effect from 22nd April 2020.
This article focuses on the e-procurement procedure to be followed by public entities which is now very relevant due to the current Covid-19 global pandemic which has forced entities to conduct their businesses through electronic platforms.
The Act defines e-procurement as a process of procurement using electronic medium such as the internet or other information and communication technologies.
Section 64 of the Act further prescribes the scope of e-procurement to include publication of notices, submission and opening of tenders, tender evaluation, requesting for information on the tender and disposal process, digital signatures and as may be prescribed by the regulations.
- The Regulations encapsulate the following definitions: ‘digital signature’ an electronic signature based on cryptographic methods of originator authentication, computed by a set of rules and parameters such that the identity of the signer and the integrity of the data can be verified.
- electronic document transmission’ is the electronic transmission of information in computerized systems.
- electronic’ an electrical, digital, magnetic, optical, electromagnetic or other form of technology that entails capabilities similar to these documents.
- ‘e-procurement system’; a system or technology that can be used to automate the internal and external processes associated with supply chain management including strategic sourcing, purchasing and inventory management of goods, works and services.
b). Provisions on the e-procurement procedure
- Regulation 49 – requires the conduct of e-procurement procedures for supply of goods, works and services integrated to the state portal and further shall:
- allow electronic exchange of documents between a procuring entity and suppliers;
- allow the management of the qualification process, the updating of supplier lists and the evaluation of suppliers.
- Regulation 51 (E-tender clarifications) – provides that e-procurement systems shall be interactive and have capability to enable bidders participating in a procurement proceeding to request or seek information or clarification. In procurement, at the bidding stage before tender closing, a bidder may want to seek a clarification from the e-tender documents to enable them properly submit a competitive bid. This is a vital provision for both the bidder and the procuring entity since through the clarifications sought are fundamental to the compliance by any bidder and requires the entity to resubmit an addendum or re-tender afresh. It is also an avenue that manages disputes arising in the tendering process. This provision should be read together with the provisions of Regulation 58 (4) which provides that clarifications sought shall be obtained electronically
- Regulation 55 (12); 68 (8) (a); 184 (2) (c) – provide that a procuring entity shall not charge any fee for tender docs obtained electronically by candidates. This will encourage many interested people to participate in procurement which will make the process more competitive and ultimately resourceful.
- Regulation 57 provides the procedure for the opening of e-tenders opening with the following stipulations:
- Electronic tender box:
- There shall be an electronic tender box which shall be maintained to high standards of security and shall remain closed until the time of tender opening.
- The electronic tender box shall have 3 passwords that are simultaneously time activated and each password shall be issued to different officers who are members of the tender opening committee.
- The tenderer may encrypt their bid as long as the password is availed at tender opening. If the tenderer fails to provide the password at tender opening, it shall be deemed that the bid was not submitted.
- Tender opening procedure:
- Tender opening minutes are required to be kept in print form.
- While there is a requirement that all tenders shall be opened in the presence of all invited bidders who choose to attend and sign a record of attendance, there is a proviso allowing for a procuring entity to arrange for the online viewing of tender opening proceedings by tenderers.
- All e-tenders shall be readable through open standard interfaces and formats as specified in the tender documents.
- The procuring entity shall ensure that financial proposal in electronic format shall only be accessed and opened after the technical evaluation of the proposal where so required in the e-tender docs.
- Until tender opening, bid offers shall be kept confidential.
- Financial bids for unsuccessful bidders at the technical stage shall not be opened.
- Electronic tender box:
Regulation 58provides that the evaluation procedure shall be in line with the criteria provided in the e-tender documents and further provides that the procuring entity shall use pre-approved automated evaluation process so long as the evaluation aligns with the criteria established in the bidding documents and is consistent with the principles of economy, effectiveness, efficiency, equal opportunity and transparency. In procurement, it is mandatory for the procuring entity to inform interested bidders of the criteria that will be used to evaluate their bids so that the bidders can submit competitive and compliant bids.
Regulation 61 provides for e-notification and acceptance of e-tender awards and states that a procuring entity shall notify all bidders participating in e-tendering process of the outcome of the award electronically and simultaneously.
The principle here is that successful and unsuccessful bidders should be notified simultaneously and in procurements where the procuring entity has failed to comply with this, the participating bidders have filed reviews of the ultimate decision on the successful bidder. Transparency is key and the principles of procurement must be carried throughout the process to preserve the integrity of the process.
The regulation further provides that the electronic system shall be interactive and have capability to enable bidder participating in a procurement procedure to be notified and accept tender awards electronically.
Regulation 62 (E-administrative review of tender disputes) states that a procurement system shall recognize the management of administrative review of all tendering disputes lodged before the Review Board and suspend all affected procurement proceedings until the Request for review is heard and determined. In addition, it provides that candidates and tenderers shall lodge appeals and receive responses electronically and, most importantly that the document management system shall be secure.
Regulation 72 – mandatorily requires tender advertisement invitation to indicate the mode of submission of tenders by specifying whether it shall be electronically or manually.
Regulation 99 (Electronic Reverse Auction) – this is defined as an online real-time purchasing technique utilized by the procuring entity to select the successful submission which involves the presentation by tenderers, suppliers or contractors of successively lowered bids during a scheduled period and the automatic evaluation of bids. This regulation 99 supplements the provisions of the Act and provides in more specific detail that:
- The procuring entity may seek approval form the authority to use this method of procurement; it shall apply to goods, works and services which have standard and comprehensive specification.
- The process must also be completed within 5hours
- The automatically generated report shall be submitted to the head of the procurement function for a professional opinion and for onward submission to the accounting officer who shall notify the successful bidder in writing that his or her bid has been accepted in accordance with the Act.
- In the event the successful bidder declines the offer, the next lowest bidder shall be offered the bid subject to the reserve price.
The timing of these regulations should encourage and give comfort to more people to take advantage of this e-procurement to participate in tenders issued by public entities.