ANALYSIS OF THE PUBLIC PROCUREMENT AND ASSET DISPOSAL ACT, 2015

INTRODUCTION

Public procurement is an important function of government and forms the largest domestic market in many countries. If well managed the public procurement system can contribute to a countries economic development by maximizing economy and efficiency. The law governing procurement in Kenya is the Public Procurement and Asset Disposal Act, 2015(hereinafter referred to as the Act) which repealed the Public Procurement and Disposal Act, 2005(hereinafter referred to as the old act).

The following constitutional provision informed the need for a repeal of the old act;

Article 227 of the Constitution, which provides the procedures for efficient public procurement and assets disposal by public entities. Article 227 (2) further provides that, an Act of Parliament (the Public Procurement and Asset Disposal Act) shall provide a framework within which policies relating to procurement and asset disposal shall be implemented.

 

The public Procurement and Asset Disposal Act 2015 gives effect to the aforementioned article on efficiency and defines the roles of regulatory bodies. Specifically, it requires that any state organ or public entity contracting for goods or services must do so within a system that is fair, equitable, transparent, competitive and cost-effective.

 

The new public procurement law is meant to comply with the citizens needs and aspirations, the Constitution of Kenya 2010 and international best procurement standards.

 

 

 

 

SALIENT REFORMS

the reforms that have been brought by the new act include inter alia:

1.    The Act provides guiding principles for public procurement and asset disposal for state organs and public entities. The principles are based on values and principles of the Constitution.   these guiding principles were not provided for in the old act.

 

2.      The National Treasury established under section 11 of the Public Finance Management Act, 2012 is given a Role by the new act in public procurement and assets disposal. The Act provides under section 11 that the National Treasury shall be responsible for public procurement and asset disposal policy formulation.

 

The role of the National treasury in public procurement and asset disposal was not provided for in the Public Procurement and Disposal Act, 2005

 

3.      The Act establishes the Public Procurement Regulatory Authority under section 8(1) of the Act to among other functions, monitor, assess and review the public procurement asset disposal system to ensure they respect the national values and other provisions including Article 227 of the Constitution on Public Procurement. This in essence transforms the Public procurement oversight authority from an oversight authority to a regulatory authority as a distinct regulator of procurement related matters within the public sector with a governing board whose mandate would be to oversee prudent procurement practices with the Director General of the Authority to undertake executive role.

 

Any undertaking or responsibility that fell on the Public Procurement Oversight Authority (PPOA) in the old act is now assumed by the Public Procurement Regulatory Authority (PPRA)

4.      The Act establishes the Public Procurement Regulatory Board established under section 10 of the Act.

 

 

5.      Old procurement act provided for a tender committee under section 26(4) which provides;

“A public entity shall establish a tender committee, procurement unit and such other bodies as are required under the regulations for the purpose of making such decisions on behalf of the public entity as are specified in this Act and the regulations.

 

Tender committee is not provided for in the new act.

6.      Part 9 of the Act provides an elaborate array of procurement methods over and above the three methods prescribed under the old Act to include; open tender, two stage tendering, Design competition,  Restricted tendering,  Direct procurements, Requests for quotations, Electronic reverse auction, Low value procurement,Force account,   Competitive negotiations, Requests for proposals and, Framework agreements

7.      Section 33 provides for county government responsibilities with respect to public procurement and asset disposal. The said section provides as hereunder;

“(1) A County Treasury shall be the organ responsible for the implementation of public procurement and asset disposal policy in the county.

(2) Without prejudice to the general provisions of sub- section (1), the County Treasury shall establish a procurement function which shall —

(a) implement public procurement and asset disposal procedures;

(b) coordinate administration of procurement and asset disposal contracts;

(c) coordinate consultations with county stakeholders of the public procurement and asset

disposal system in liaison with the National Treasury and the Authority;

(d) advise the accounting officers of county government entities on public procurement and asset disposal matters;

(e) co-ordinate county government monitoring and evaluation of the supply chain function of co government entities including ensuring compliance;

(f) promote preference and reservations schemes for small and micro enterprises and other disadvantaged groups, citizen contractors, women, youth, persons with disabilities,

minorities and marginalized groups in public procurement at the county;

(g) promote preference and reservation schemes for residents of the county to ensure a minimum of twenty percent in public procurement at the county;

(h) administer the scheme of service for county government procurement and supply chain management officers and capacity building;

 

 

8. the Act has introduced an internal appellate system under the Administrative Review Board under the Authority.

9. The Act has sought to streamline the appointment process for board members (overall and Administrative Review Board), the Director General with clear tenures

The provisions on county government responsibilities with respect to public procurement and asset disposal did not exist in the old act.

 

 

CONCLUSION

The Public Procurement and Asset Disposal Act 2015 was enacted, ostensibly to give effect to the Constitution of Kenya, and to provide for stronger institutions and procedures in the public procurement sector.