Public procurement

Youths in Kenya have been urged to register their businesses so as to take advantage of the huge business opportunities in public procurement. This was said on Friday 22nd February 2013 by Ms Mwanamaka Mabruk the Chief Executive Officer (CEO) of Kenya National Shipping Line a subsidiary Kenya Ports Authority (KPA) during KPA Suppliers’ Conference.

The Youths running businesses should register with Ministry of Finance to ensure they get a share of the Public Procurement Contracts as provided under the Law and decreed by retired President Mwai Kibaki.

Mr Oyaro the Head of Procurement KPA echoed the same sentiments. He confirmed that no single Business owned by Youths or a Disadvantaged Groups participated in bidding for the many contracts worth of Kenya Shillings (Kshs) Billions KPA advertised in current financial year. He reported that KPA has embraced Electronic Procurement (e-procurement) which will be rolled out in March 2013 on the SAP platform. He added in future there will minimal human interactions with the KPA Procurement Officers because all the buying processes will be paperless. He warned that free email contacts from yahoo!, gmail, hotmail etc will not be acceptable.

Retired President Kibaki is on record saying, through Affirmative Action, the youths will be empowered to supply 10 percent (%) of the value of goods, services and works procured by Government. The President directed Treasury and the State Law Office to eliminate any legal or administrative obstacles blocking the youths from accessing Public Tenders. He also ordered all ministries to include youth focused targets in performance contracts of all their departments.

President Uhuru Kenyatta  increased the reservation percentage threshold from 10% to 30 %.

The Minister of Finance responded through the publishing legal notice no. 58 in Special issue of Kenya Gazette of where Public Procurement and Disposal (Preference and Reservations) Regulations, 2011 were made into law.

There are many acceptable legal statuses for the Youths. The Youths can operate these forms of business organization from sole proprietorship in their human names to Registered Business Names, partnership, joint ventures, Consortiums and limited Company. The process of registering with Minister of Finance is easy. All that is needed is one to fill in the form titled: Registration form for Youth Enterprises for supply of goods, Works and Services to Government. Here is the website (URL) to ministry of Finance:

In the Conference, the Representatives from the Public Procurement Oversight Authority (PPOA), the procurement and disposal regulatory body in Kenya pointed out that the reforms in public procurement and disposal system is playing a critical role in achievement of Kenya Vision 2030; which is to create a globally competitive and prosperous country with a high quality of life by 2030. They reported that in financial year of 2008 the Central Government procurement as percent of GDP was 27 % representing about Kshs 475 Billions.

PPOA representatives advised all Public Entities that the common Disclaimer Statement  ” …. shall not be bound to accept lowest bid” is a contrary to Public Procurement Laws and should be not be included on an advertisement for invitation of tenders / bids. The lowest bidder ought to be awarded the tender. That is the spirit and letter of the Laws of Kenya. It also supports economics principles of fair competition and value for money.

All the speakers in the Event challenged the youths, women and persons with disability to compete in public procurement processes to boost their living standards and create employment. The Youths were urged and reminded that Government has preferred them. They should change from chasing the elusive employment vacancies to seizing the reserved business opportunities.

The implementation of Constitution of 2010 is at peak with first General Election slated for March 4. The devolved system of Government means more business opportunities for the locals and by extension the Youths.  The CEO of Kenya National Shipping Line (KNSL) who was the Guest of Honour also said because of legal relationships between KPA and KNSL the pre-qualified suppliers are usually lifted from the database of KPA and given opportunity to do business with KNSL. My dear reader don’t you agree that it can never be better than this?

Also in attendance were representatives from major financial institutions in Coast Region, a demonstration of Public Private Partnership. Equity Bank, Family Bank, Eco Bank, ABC Bank, Consolidated Bank, Rafiki Micro finance to name a few. They were unanimous that an entrepreneur who secures a Local Purchase Order (LPO) or Local Supplier Order (LSO) from most Government Institutions should visit their halls 100% assured that financial resources will be availed to him/her. Of course subject to manageable terms and conditions.

My question is: how many Kenyans are going to profit from this advice? I challenge you if you are over 35 years old, the Kenya Laws bars you from doing business as youth; enable a youth access this opportunity. If you are a youth or a lady or a person with disabilities I urge you act on this immediately. I rest my case by asking you to review the figure of Simplified Procurement Legal framework in Kenya at beginning of the article.

Now, suppliers have rights that are enforceable and must be respected by all Procuring Entities. We have come a long way. Before this legal framework was developed and implemented Procurement Departments (houses) was a likened to “The den of thieves” in the Bible. President Kibaki in 2003 after first victory of Multi-Party General Election in Kenya; he decreed for en masse dismissal of all serving Procurement Officers in Public Service. In the past on one hand the corrupt entrepreneurs operating in briefcase offices “supplied” air and were promptly paid millions from the Public coffers. On the other hand credible entrepreneurs’ having done business with the Government their invoices were left pending; cycles of Authority to Incur Expenditures (AIEs) or Budgets. Perhaps AIE meant at that time Authority to Insist on Eating. Such acts of impunity cannot happen when Chief Justice Dr Willy Mutunga is the Head of the Arm of Government called Judiciary.

Also Ethics and Anti-corruption Commission, the State Anti-corruption Body created in the Constitution of Kenya that was promulgated on 27th August 2010 is an Independent Commission and will thoroughly investigate you and recommend for your prosecution. The Director of Public Prosecution will dutiful get you a day before a Court System of Kenya. Mark you there are many Civil Societies fighting corruption such as Transparency International, Kituo Cha Sheria, Muhuri among others.

In a nutshell I urge you to do business based on value system of integrity. Warren Buffett an American Investor said “there is so much money to be made within the provisions of the law there is no need to play on the edges”.

Do you need some assistance? Feel free to contact me.