1Monday, November 30, 2015 1 Public Procurement Oversight Authority TRAINING FOR JKUAT MOMBASA...

1Tuesday, April 18, 2023 1

Public Procurement Oversight Authority

TRAINING FOR JKUAT MOMBASA CAMPUS

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OUTLINEDefinition of some termsPart I: Preliminary-IntroductionPart II : Internal Organisation of Procuring

EntitiesPart III: General Procurement Rules.Part IV: Open TenderingPart V :Alternative Procurement MethodsPart VI- Administrative Review of

Procurements and ProceedingsPart VII Investigation, Debarment and Disposal Schedules

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DEFINITIONS OF TERMS• Procurement Acquisition by purchase, rental, lease, hire purchase, tenancy,

franchise or any other contractual means of any type of works, assets, services of goods including livestock or any combination

• Assets Movable and immovable property, tangible and intangible

including immovable property stores equipment, shares, intellectual rights vested in the state or proprietary rights.

• Procurement Plan A document prepared annually to plan all procurement

requirements• Public private partnership Agreement between a procuring entity and private party under

which a private party undertakes to perform a public function or provide a service on behalf of the procuring entity.

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DEFINITIONS OF TERMS

• Pre-qualification procedure Pre-qualification procedure set out in the

regulations (Reg.23 that is- ……..to include nature of requirements,

quantities….timetable for delivery, etc . Note: This is not same as procedures for

maintaining and updating annually a registered list of potential tenderers as per Reg.(8) (3) (a).

• A tenderer A person submitting a tender

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PART I PRELIMINARY INTRODUCTION • These Regulations apply to public entities as enlisted under

Section 3(1) of the ACT that is- Any body using public assets in any form of contractual

undertaking. Companies owned by public entity Any body in which the Government has a controlling share• Capacity building levy( Regulation 4 ) The capacity building levy payable under section 18(5)(d) of

the Act shall be 1.5 % of the contract price Payable in respect to the portion funded by the Government

for contracts partly funded by donors. Not applicable where the contract is 100% funded by

donor.

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PART I PRELIMINARY cont’d

The Advisory Board (Regulation 5) • Membership Nine members from prescribed institutions as

per First Schedule of the Act plus the Director General

A total of 14 prescribed bodies to nominate two persons –one a woman {(Reg.5(1)}.

The appointments to be approved by Parliament.

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PART I PRELIMINARY cont’d Threshold matrix (Reg.6). • Prescribed under First Schedule of the

Regulations• Apply to PEs differently according to Classes A ,B

& C – Gazette Notice - Legal No3 of 2007 dated 24th January 2007.

• Contains: Responsibility for awarding contracts Responsibility for signing contracts Responsibility for Inspection/Verification and

Acceptance of Goods ,services and works

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PART I PRELIMINARY cont’d

Role of User Department (Reg. 9)• Initiation of requirements and participating in

management of contracts.• Preparing specifications and undertaking

conformity assessment.• Preparation of procurement plan• Compliance with the Act and regulations Note : In response to Section 27(3) of the Act-

“Responsibility for compliance with the Act and regulations by employees, members of a board or committee”

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES.

Role of Accounting officer(Regulation7)• Pursuant to Sub- Section27(2) of the Act –

Accounting officer shall: Ensure establishment of Tender

/Procurement Committees.Ensures establishment of Procurement Unit

(staffed with procurement professionals)Ensures that Procurement Plans are

preparedEnsure proper documentation of

procurement proceedings.

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Tender committee ( Reg. 10) • Member of the tender committee may be paid

such honoraria as the procuring entity may determine.

• Where the value of the contract is above Kshs 50,000,000 at least two observers will be invited to the tender committee meetings.

• Decisions to be by consensus, and minutes prepared or by vote if consensus is not feasible

• Declared conflicts of interest and dissenting views to be recorded.

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Tender committee ( Reg. 10)• No ratification of decisions made outside the

committee.• Reviewing decisions made by Procurement

Committees• Review, verify and ascertain that all procurement

and disposal are undertaken in accordance with the Act and the Regulations.

• Alternate members with adequate experience to be appointed

• Quorum-Five members including the Chairman

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Procurement committee• Procurement committee established by as per

Section 26 (4)• Functions similar to those of the Tender

Committee but for procurement values below the Tender Committees thresholds.

• Approve, reject or approve subject to clarifications submissions by the procurement unit.

• Alternate members with adequate experience to be appointed

• Quorum-Chairman and at least two other members.

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Establishment of Procurement Unit• Summary of responsibilities Maintaining and updating registered list of tenderers. Preparing and publishing procurement opportunities Managing the whole procurement and disposal

process including inventory management Advising the entire PE on aggregation of

procurement to promote economies of scale Coordinating internal monitoring and evaluation of

the supply chain function Verifying that available stock levels warrant initiation

of procurement process.

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Evaluation committee• To be formed for each procurement with threshold of

tender committee • It is advised that procurements within the

threshold for the procurement committee also warrant some evaluation for effective adjudication by the Procurement Committee

• To comply with the evaluation procedures –Section 66(3) i.e.”

• Using procedures and criteria in the tender documents.• No other criteria to be used• The criteria must be to the extent possible be objective

and quantitative

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Evaluation committee cont’d• Criteria (as stipulated in the bid document) to

be expressed taking into account price, quality and service to enhance effective evaluation

• Evaluation may be by by Technical Committee and Financial Committee

• Technical Evaluation to be completed within30 days

• Financial Evaluation Committee to complete the exercise within 5 days after completion of technical evaluation

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PART II INTERNAL ORGANISATION OF PROCURING ENTITIES cont’d

Inspection and Acceptance Committee• Composed of Chairman and at least two other

members• To inspect ,test goods to ensure correctness of

quantity, and compliance with specifications.• To ensure effectiveness in completion of

works and services as well.• Ensure required manuals and documents are

submitted• Issue interim or a complete certificate or reject

goods, works or services

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Transfer of procurement responsibility

• By the Authority to:Procuring agents.Or another Procuring EntityA procuring agent shall pay a registration

fee of Ksh.20,000 to the authority.

• This role is also vested in the Accounting Officer but remains responsible.

PART II CONTD.

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PART II CONTD. Procurement planning Reg.20(1) to(5) pursuant

to Section 26(3)(a)( b) and (c) of the Regulations

• Plan to be integrated in the applicable budgetary processes and based on indicative and approved budget as appropriate

• Where appropriate Multi-year procurement plans may be prepared and shall be integrated into the medium term expenditure framework (MTEF)

• A head of department shall submit procurement plan to Accounting Officer at least 30 days before the close of each financial year

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PART II CONTD.

• Procurement planning cont’d• Consolidated plan to be approved by the

Head of the procuring entity and where applicable by the Board of Directors or similar body.

• Note: Role of Board of Directors in PPOA’s circular Ref:PPD.4/07Vol.1/(47) dated 2nd February 2007

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PART II CONTD.Procurement plans shall include:• A breakdown of goods, works or services • A schedule of planned delivery, implementation

or completion dates• An indication and justification for whether an

procurement shall be undertaken within a single year or under a multi-year arrangement.

• An indication of which items can be aggregated for a procurement a single package or for procurement through any applicable arrangement for common user items

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PART II CONTD.Procurement plans shall include • An indication of which items will be packaged

into lots• An estimate of value of each package of

goods, works or services. • The budgets available and sources of funds• Procurement method for each procurement • Format to be provided by PPOANB: But it is advised that you do not wait for the

format-use an appropriate one to capture the above and others necessary information.

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PART II CONTD.

Purchase requisition and authorization.• Requisitions to have estimates that reflect up-to-date information on economic and

market conditions.• Approval as per First Schedule of the

Regulations -the Threshold Matrix.• Procurement unit to prepare plan for each individual requirement to include TIME for

each stage in the procurement cycle.

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PART III GENERAL PROCUREMENT RULES

• Prequalification procedure.Candidates to be allowed 14 days to prepare and

submit application( for specific procurement).Maintain and update a list( for future purchases)• Procuring entity shall maintain and update a list of

suppliers –Section39 (7)• Procuring approvals.• A procuring entity shall maintain specimen

signatures of all persons authorised to make approvals in the procurement process

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PART III GENERAL PROCUREMENT RULES• Restrictions-Limitation on contract with employees and

relatives etc by PE ( Reg.26 ) For purpose of section 33 (2) of the Act relative is limited to

spouse and child.• Conflict of interest -Pursuant to Section 43• An employee or agent of PE or member of Committee, Board,

shall no take part in the proceedings or on any matter to do with the contract awarded to a relative

• A relative means:A spouse child, parent brother or sisterA child. parent brother or sister of a spouse or any prescribed relative.NB: Note the relationship between this provision with

limitation to entering into contract with persons under Section 33 and 43 of the Act

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Preferences and Reservation-Section 39(8) (a) &(b)Preferences to citizens of Kenya-Applicable thresholds for:Goods and services Kshs. 50 M.Works Kshs. 200M.Section 39(8) (b) (i) goods manufactured, mined extracted and

grown in Kenya– margin of preference :15% orSection 39(8) (b) (ii) works, goods and service where

preference may be applied depending on shareholding as follows:

- Less than 20% shareholding-margin of preference :6% -Less than 50% shareholding -margin of preference: 8%

PART III CONTD. 1

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PART III CONTD. Tender documents – Third schedule.1. Standard tender document for design

construction, supply, installation, testing commissioning and handing over of plant/project (turnkey project.)

2. Standard tender document for supply installation and commissioning of plant and equipment.

3 Standard tender document for prequalification of procurement candidates.

4 Standard tender document for procurement of works (Roads, Bridges, Water and other Civil Engineering works).

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PART III CONTD.

Tender documents – Third schedule.5 Standard tender document for procurement

of works (small works6 Standard tender document for procurement

of Works (Buildings and associated civil engineering Works)

7 Standard tender document for procurement of works. (Electrical and mechanical works)

8 Standard tender document for procurement of goods.

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PART III CONTD. Tender documents co9 Standard tender document for

procurement of insurance services10 Standard tender document for

procurement of services11 Standard tender document for letting,

leasing, licensing, tenancy, franchise and management contracting.

12 Standard request for proposals (RFP) (Selection of consultants

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PART III CONTD.

Tender documents cont’d13 Standard tender document for Request

for Proposals (RFP) (selection of

individual professional consultants14 Standard tender document for sale of

boarded stores and equipment.• The standard tender documents are

usually customized by purchasers.

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PART III GENERAL PROCUREMENT RULES cont’d

• Contract Administration• The Act covers contract management Section 4(1)

of the Act and detailed in the Regulations in respect of:

Price variation to be based on prevailing consumer price index obtained from CBS or the monthly inflation rate issued by CBK

Quantity variation for goods and services not to exceed 10% of the original contract quantity.

Quantity (bill of quantities /scope of works) variation for works not to exceed 15% of the original contract quantity.

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PART III GENERAL PROCUREMENT RULES cont’d

• Contract AdministrationContract termination.Grounds and procedures for termination to be specified in

the contractThe request for termination to be made by procurement

unit for the tender committee approval prior to terminationThe request for termination to includeReasons for terminationContractual grounds for termination andCost of termination Discussion: How can costs of contract termination be

avoided or minimized?

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PART IV OPEN TENDERING

• Threshold for Open tendering advertisement

CLASS GOODS WORKS SERVICES

A 6000000/- 6000000/- 3000000/-

B 4000000/- 4000000/- 2000000/--

C 3000000/- 3000000/ 1000000/

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PART IV OPEN TENDERING

• Advertisement period. ICB – 30 days minimum NCB – 21 days minimum.• Evaluation of tenders Preliminary Evaluation Technical Evaluation Financial Evaluation Evaluation within 30 days after opening of

tenders. See timeframe for Technical and Financial evaluation above

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Issuance of Tender Documents• Fee for tender documents

– Not to Exceed Ksh 5,000.

Tender Security– Not to exceed 2% of the estimated value of

contract.– Insurance company guarantee acceptable if

approved by the Authority.

PART IV CONTD.

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PART V – ALTERNATIVE PROCUREMENT METHODS.

• Restricted Tendering.• Request for proposals.• Request for quotations.• Direct procurement.• Low value procurement .• Specially permitted procedure. -It is important to know the following: -When a procedure may be used -Have prior approval of the Tender committee. For choice of procurement methods –see Matrix

Presentation

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PART V CONTD. Award of contract ( As per the first schedule-

the Matrix)• By Tender /Procurement Committee depending

on threshold for each class of PE• By user in case of Low Value Procurement• Notification of award:To successful tenderers as well as unsuccessful

tenderes. After notification of award where an unsuccessful

tenderer requests a procuring entity shall within 14 days after a request provide written reasons as to why the tenderer was unsuccessful

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PART VI - ADMINISTRATIVE REVIEW OF PROCUREMENTS AND PROCEEDINGS

• Composition of membership of Review Board• The Director General shall appoint from amongst the

staff of the Authority to be the secretary to the Review Board

• To be appointed for a term of three years• The membership to be six appointed from the names

submitted by 13 professional bodies and COTU• Three other persons appointed by the Minister• A Chairman appointed by the Minister from six

persons referred above.• Procedures in review (Refer to presentations for the

Overview of the ACT)

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Part VII INVESTIGATION, DEBARMENT AND DISPOSAL• Investigation.

Investigator pursuant to section103 not to advice PE on matters being investigated.

• DebarmentThe Director General with the approval of the

Advisory Board may debar a person from participating in procurement proceedings on the ground that the person has breached a code of ethics (s.139 of the Act)

Where a person is debarred from participating in procurement proceeding as under section 115 of the Act, the debarment extends to any firm in which a person has a controlling interest

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PART VII CONTD.• Disposal As recommended by disposal committee May be by : Sale by Open tender Transfer to another public entity or part of

public entity with or without financial adjustment Sale by public auction Destruction, dumping or burying Trade-in

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PART VII CONTD. Disposal cont’d• Disposal to employees When: Time and cost required to dispose to any other person

would be disproportionate to the value of the item

The employee is in the possession of the stores or equipment to be disposed of and may be given the firstly priority to purchase the same

Any disposal made to staff should be reported to the authority within 14 days of the disposal by the accounting officer

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SCHEDULES

• First - Threshold matrix• Second – Composition of Tender Committee• Third – Standard tender documents• Fourth – Review forms and fees for review

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Never decide to do nothing just because

you can do a little

Do the little you can

Thank you!

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END

DISCUSSIONS

“THANK YOU”