TENDERING

Basic requirements for eligibility to tender

The following are the general requirements for potential suppliers to public entities:
 Registration with Attorney General/incorporation certificate;

 Copy of PIN certificate and compliance with VAT (Electronic Tax Register), NSSF and NHIF and valid tax
compliance certificates;

 The necessary qualifications, capability, experience, resources, equipment and facilities to provide what is
being procured;

 Legal capacity to enter into contract;

 Not insolvent, in receivership , bankrupt or in the process of being wound up and not subject to related legal
proceedings;

 Not precluded from contracting by being an employee of the procuring entity or a member of its board or
committee or certain relatives of the same; and

 Not having been debarred by the Director-General (Public Procurement Oversight Authority) PPOA from
participating in procurement proceedings on account of an offence, breach of contract or other valid reason.

Other requirements may be specified for certain procurements:

 For building works, the potential bidder should be registered in either the Roads or Works Registers
maintained by the Ministry of Roads or the Ministry of Public Works;
 Business Permits;
 Energy Regulation Commission registration and classification if the works include electrical installation;
 Evidence of completion of similar works in previous 2 years;
 Provision of bid security of a certain amount (maximum 2% of the contract price); and
 Audited accounts for 3 years.

Special Requirements
a) Registration procedures for building works
Potential bidders should be aware that there are various procedures before they can supply building works, roads
and housing. The Ministry of Public Works vets all building contractors through the National Registration
Committee (NRC), which is chaired by the Chief Architect.

b) Qualifications for registration as a building works supplier Necessary

qualifications are:
 Minimum technical qualifications and skills prescribed by the NRC for the category, type and class of
registration being sought. At least one of the shareholders or partners must have the technical qualifications
and skills set by the committee from time to time;
 Necessary experience as prescribed by the committee in the field of application;
 The applicant’s professional conduct to be such that, in the opinion of the Committee, he/she is a person fit
and proper to be registered; and
 The necessary plant and equipment for execution of the intended works. The applicant must show proof of
ownership or availability, such as vehicle logbooks, receipts etc.

The Ministry registers firms in categories A to H for both general and specialised contractors.
Category A is the highest, handling projects of over KShs 250 million in general contracts and over KShs 50
million in specialised contracts.
Category H is the lowest handling contracts of KShs 5 million contracts and KShs 1 million in general and
specialised contracts respectively. To initiate the registration and classification process, local companies have to
pay KShs 3,000 and foreign companies US$200 for a manual which is then given a serial number. The manual
outlines the registration process including the payments required.

c) Temporary Registration This can be facilitated for foreign firms incorporated overseas who are in Kenya for
a specific business purpose. Conditions for such registration are in the Ministry of Public Works Registration
Procedure Manual.

Electrical Installations

Electrical contractors include those undertaking contracts for electrical installation, electronics, lift and escalators
installation, generating plants and control panels, solar power generation and photovoltaic installations.
For electrical installation, a potential bidder has to be registered with the Energy Regulatory Commission. The
regulations governing registration are contained in The Electric Power (Electrical Installation Work) Rules 2006.
The various classes of licences are as follows:
 Class C-2-lowest class of the possible licences. A holder of such licence can handle single phase supply
restricted to up to 2 storey residential and commercial buildings not used as a factory or public entertainment;
 Class C-1-carries out class C-2 work and connection to a 3 phase supply at low voltage restricted to four
storey building in buildings not used as a factory or public entertainment;
 Class B- Carries out Class C-1work but without limitation to number of storeys whether used as factories or
places of public entertainment and for connection to supply not exceeding medium voltage;
 Class A-1-Can handle all kinds of electrical installations including very high voltage up to 132KVA; and
 Class A-2 for specialised electrical installations.

Qualifications of electrical contractor

For a contractor to be registered as an electrical contractor he/she must be:
 A licensed electrician; or
 Have in his/her employ, a licensed electrician.

Advertisement of public procurement opportunities (tenders)

Bid opportunities are advertised in a wide range of media including the following:
 Notices may be placed on the various notice boards of Ministries, Parastatals, other procuring entities and
the provincial administration such as chiefs, Divisional Officers, District and Provincial Commissioners;
 Electronic media such as radio and television;  Newspapers and other print media (both local and
international);
 Individual Public Procuring entities’ websites;
 The special website for tender opportunities set up by the PPOA at www.tenders.go.ke.

The form of advertisement will depend on the size and complexity of the goods, works or services being
procured.
Content of Advertisements
The content of an advertisement will vary according to what is being procured and the method of procurement.
A typical advertisement for works will contain:
 Scope of works (a brief description of the works required);
 Basic requirements for qualification;
 Arrangements for collecting documents, including any payment required; and
 Time and place of submission of tender or quotation (this requirement must be fully observed, as any late
submission will be disqualified).
Types of tenders

i. Open tendering
It is the Government of Kenya’s preferred method of procurement. However, alternative procurement
procedures may be used in certain circumstances. This is where an opportunity (including all tender
documents) is advertised inviting providers to bid directly for a contract.
All interested parties then submit a tender. Scoring takes place and the successful organization is awarded
the contract.
Sometimes there is a selection stage first, which is then followed by the award stage.

ii. Restricted tendering.

This involves the opportunity being advertised in the relevant places and media. Organizations will then
submit an expression of interest and fill in a pre qualification questionnaire. Successful organizations will
go onto select list and be given an invitation to tender with the tender documents. Tender documents are
completed and submitted. From the submitted tender documents scoring takes place and the successful
organization is awarded the contract. The select list may be used for a period of up to eight years. So it is
always useful to check when lists are coming to an end to see when your organization could be included.
There must be a minimum of five bidders. This procedure works best when a commissioning body is clear
at the start of the process what it wants to buy in terms of pricing and other
award criteria.

iii. Direct procurement(sole bid)

This method may be used where there is only one person or company that can supply the goods, works or
services being procured, where there is no reasonable alternative, or in certain cases of urgent need;

iv. Negotiated procedure

This method can only be used in a limited number of carefully defined cases (e.g. large capital
projects where a range of solutions to deliver are possible). An opportunity is advertised (the
specification is not established at the start of the process) and organizations can submit an expression of
interest and fill in a pre qualification questionnaire. Successful bidders are invited to negotiate with the
procuring body, which is called the dialogue phase. Once dialogue has generated solutions to the agreed
requirements, final tenders are submitted based on each bidders individual solution. Scoring then takes
place and the successful organization is awarded the contract. There must be a minimum of three bidders
v. competitive dialogue
this is a procedure only used in the case of particularly complex contracts. An opportunity is advertised
and organizations can submit an expression of interest and fill in a pre qualification questionnaire (the
specification is not established at the start of the process). Successful bidders discuss the form of the
contract and technical specifications with the bidders before the tender documents are issued. The
discussion ends when the procuring body can identify a solution to meet its needs. Bidders then submit a
tender based on the solution resulting from the discussion. Scoring then takes place and the successful
organization is awarded the contract. There must be a minimum of three bidders.

Tendering process
 a. Prequalification
Prequalification is a preliminary stage of the tendering process that is designed to produce a short-list
of companies that would be capable of meeting the technical standards of the works or project,
without regard to price considerations at this stage. Prequalification should take into account:
 Experience and past performance on similar contracts;
 Capabilities with respect to construction and manufacturing facilities; and
 Financial position.
Tendering is then confined to companies that have been prequalified.

b. Specifications

Requirements for an item, works or service to be procured will be specified in the tender document.
Specifications will normally be based upon Kenyan or international standards. Specifications form part of the
tender documents and are the basis on which the technical evaluation is conducted. It is important that offers
should adhere to all mandatory requirements; otherwise the offer may be rejected as non-conforming.
Goods must be supplied or work done in accordance with the specifications. Items which do not meet the
specified quality or standards may be rejected by the procuring entity who may withhold payment until items of
the required quality are supplied. The time requirements for delivery of goods or performance of services must
also be met.
c. Types of tender
Procuring entities may produce standing lists of registered tenderers for supply of their requirements over the
coming year. Those on a standing list may be offered an opportunity to tender or submit a quotation for
requirements that arise during the year.
Some tender opportunities will be for framework contracts. These are contracts entered over a specified period,
typically one to three years, and are used for goods and services that are required on a regular basis, such as office
stationery, medical supplies, road maintenance, cleaning, guarding services etc. A framework contract may
contain a Service Level Agreement, specifying the minimum standards which will have to be met for delivery of
the services.
Other tender opportunities will be for the one-off supply of an item or service. Some requirements,
particularly for high-value items or services, will be obtained through open tendering. All potential bidders,
not only those on the standing lists, may compete for open tenders, which are advertised by the procuring
entity. Open competitive bidding can be national or international depending on the goods, works or services
being procured. Potential bidders are allowed a minimum of 21 days to prepare and submit their bids (30 days
for international tendering).

d. Tender Document

A tender document is a set of documents which may include the following:

 Invitation to Tenders;
 Instruction to Tenderers/Bidders;
 Bid Data Sheet;
 General Conditions of Contract;
 Special Conditions of Contract;
 Schedule of Requirements;
 Technical Specifications;
 Forms-Bid/Tender;
 Forms-Security;
 Integrity Declaration

e. Completing Tender Documents

When completing a tender document, a potential bidder should read the Instructions for
Bidders, which will contain all the information on how to complete and return the tender document. Specific
requirements of the tender or the bid, for example, where to place attachments or whether an omission would
invalidate the bid, will be highlighted in the Bid Data Sheet.

f. Filling Quotation Forms

PPOA(Public procurement oversight authority) has produced a Standard Request for Quotation (RFQ) form for
use by procuring entities. Potential bidders should read the instructions carefully. The RFQ form has in the first
part the item descriptions, the unit of measure and the quantity required, which will have been completed by the
procuring entity. The bidder will be required to fill in the unit price, any discounts offered, the brand and country
of origin of the goods quoted for, and to compute the price for each item, adding tax, shipping and miscellaneous
costs to arrive at the total quoted price.

g. Submission of offers

The time and place for submission of offers will be specified in the tender documents.
Bidders must submit their offers by the bid deadline: failure to submit your bid on time, even by only a few
minutes, will lead to your bid not being considered.
Some tender documents will specify that the technical and financial proposals be submitted in separate inner
envelopes within an outer envelope. For these tenders, the technical envelope will be opened first and the
technical evaluation carried out before the financial envelope is opened. If a technical proposal does not meet
requirements, the financial envelope will not be opened and will be returned to the bidder.

h. Standard Bidding Documents

PPOA has produced and published a number of Standard Bidding Documents which will be used with suitable
modifications for the procurement of different requirements

i. Validity of Bids and Bid Security

Potential bidders are required to submit bids that are valid for a period specified in the bidding documents.
Procuring entities have the option to demand bid security which can be a fixed sum or a percentage of the
estimated value of the contract. This is specified in the bidding documents and can be up to 2% of the contract
price. Bid securities should be from a reputable bank (local or international), insurance company (approved by
PPOA) or in the form of cash or letter of credit, in the amount specified in the bid document. A receipt is
attached to the returned tender as proof of payment. Bid security is only valid if it extends at least thirty days
after the expiry of the tender validity period. Bid security is released to unsuccessful tenderers once the contract is
awarded to the successful bidder.

j. Payment for documents

Procuring entities may charge a fee not exceeding KShs 5,000 for a set of tender or prequalification documents.
This payment covers costs for printing, copying and distribution or for converting documents into electronic
format. This fee is normally paid in cash or bankers cheque

k. Pricing and bid validity

 Pricing should be inclusive of all duties, taxes and other levies. Most entities will require that
the bid price be valid for up to 120 days after tender opening to cater for the evaluation, post tender negotiations
and wider consultations when necessary.

l. Evaluation of tenders
A preliminary evaluation is undertaken by an evaluation committee soon after opening tenders to ascertain that
the tender has been submitted in the correct format, has been signed, and that the correct number of copies, tender
security, validity and any required samples have been provided. Any tender that does not meet the requirements
is rejected. Tenders are then evaluated more rigorously for technical conformity, followed by the financial
evaluation which considers prices read out at tender opening, corrections for arithmetic errors, currency,
discounts etc. The lowest priced conforming tender is usually awarded the contract. However, for some tenders,
particularly those based on Requests for Proposals, a marking scheme may be used. Tender documents contain
the evaluation criteria by which the tenders will be evaluated. The recommendation for contract award by the
evaluation committee will be submitted to the tender committee for approval (procurement committee for lower-
value tenders).
The procuring entity has the right to reject all tenders received and to terminate the procurement proceedings at
any time without entering into a contract.

Variations and Price Adjustment

The bidding documents shall clearly indicate whether price adjustment during the period of the contract will be
allowed in the event of price changes occurring in major cost components such as labour, equipment and
materials. Variation of contracts is only allowed if:
 The price variation is based on the prevailing Consumer Price Index obtained from the Central Bureau of
Statistics or the monthly inflation rate issued by the Central Bank of Kenya;
 The quantity variation for goods and services does not exceed 10% of the original contract (or 15% in the
case of works); The price or quantity variation is to be executed within the period of the contract; and
 The variation has been approved by the procuring entity’s tender committee in writing.
Performance Bonds
A performance bond is a financial tool used to guarantee satisfactory completion of a project by a contractor and
ensures that in the event of default by the contractor, funds are available to complete the works being undertaken.
Performance bonds are issued by banks as financial guarantees. Performance bonds are usually set at 10% of the
contract price. For construction contracts, 50% may be released immediately on completion of the work, with the
balance being released after 6 months.

Terms of payment

a) Goods Processing of payment for goods commences after their receipt in store, verification that they
meet specifications and signing of the delivery note. The standard terms of payment are 30 days from the date of
invoice. The procuring entity is obliged by law to pay interest on overdue amounts, unless the contract provides
otherwise.

b) Services Payment for services is also due 30 days from the date of invoice after the user has confirmed that
services meet the Service Level Agreement which forms part of the service contract.

c) Works In major contracts for equipment and plant which may take some considerable time to complete,
provision is normally made for progress payments on milestone achievements. Contracts for works provide in
appropriate cases for mobilisation advances, advances on contractors equipment and materials, regular progress
payments and reasonable retention amounts to be paid after full compliance with the contractor’s obligations
under the contrac
17 Rights of Bidders

a) Notification of acceptance of tender The procuring entity will notify the successful bidder
that his tender has been accepted, while at the same time notifying other bidders that their
tenders were not successful. However, at least 14 days must elapse before a written contract
may be entered into, to allow time for an application to be made for administrative review. If
the successful bidder refuses to enter into a written contract, the entity may award the contract
to the next best evaluated bidder.

b) Unsuccessful Bidders A bidder has the right to request the reasons why his bid was
unsuccessful. Regulation 66(2) is clear that the Procuring Entity shall, within 14 days after a
request provide written reasons on why the tender, proposal or application to be prequalified
was unsuccessful. Bidders may also request a summary of the evaluation report pursuant to
Section 44(3) of the Act.

c) Request for Review An independent Administrative Review Board is in place and any
aggrieved bidder can
request for review of a decision by a procuring entity. The minimum requirements for lodging
a request for review include: -
 The complainant must be a candidate in the procurement process he/she seeks to be
reviewed. A candidate is a person who has submitted a tender to the procuring entity;
 The request should be made within fourteen days of the occurrence of the breach
complained of or notification of award;
 The applicant seeking a review must specify the breach of duty which has or may result
in the applicant suffering loss or damage;
 The Request for Review shall be presented in the manner of Form RB 1, which can be
downloaded from the PPOA website (www.ppoa.go.ke) and is also found in the fourth
schedule of the Regulations 2006;
 The request for review should be accompanied by such statements as the complainant
considers necessary to support its request;
 The complaint must be accompanied by the requisite fee. The fees for reviews are found
in Part II of the Fourth Schedule to the Regulations. The fee payable upon filing a
request for review depends on the value of the tender quoted by the complainant. In
addition, there is an administrative fee of KShs 2,000; a
 The request should be submitted to the Board Secretary in 15 bound copies and a soft
copy, pages of which should be consecutively numbered.

The following matters are not subject to

review:
i. The choice of a procurement procedure;
ii. A decision by the procuring entity to reject all tenders, proposals or quotations under
Section 36 of the Act;
iii. Where a contract is already signed in accordance with Section 68 of the Act; and
iv. Where an appeal is considered by the Review Board to be frivolous.
Where an appeal is lodged, procurement proceedings will be suspended. The Review Board
will complete its review within 30 days. A decision made by the Review Board is final and
binding on the parties, unless an aggrieved party appeals to the High Court
18 Health
& Safety
Potential bidders should be aware that importance is attached to health and safety requirements
and these may be specified in tenders.

19
Enviro
nment
Potential bidders should be aware that Kenya is a signatory of the Kyoto Protocol and
environmental factors may be built into the tender and evaluation of bids. Examples of such
factors include but are not limited to carbon footprint, level of forest degradation, emission and
spillage of toxic chemicals, crude oil spills on land or offshore, level of non-biodegradable
waste, threats to biodiversity and levels of radioactive materials