Public Procurement

Oversight Authority

TRAINING FOR MINISTRY OF

FOREIGN AFFAIRS’S STAFF
Tuesday, June 17, 202528 January, 2011
th
1
 PUBLIC PROCUREMENT PROCESS,
METHODS & THRESHOLD MATRIX

BY
Stanley C. Miheso
Tuesday, June 17, 2025 2
 I: Basics of Procurement
Definition of Procurement
Acquisition by purchase, rentals or hire purchase, tenancy or
any
other contractual means of any type of works, assets, services
or
goods
Objectives of Good Procurement.
Acquisition of items in the most cost effective manner to ensure
that they are provided in the right quantities, at the right
quality,
from the right source in timely and right delivery period at the
right
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price (lowest possible total price)
 The Procurement Process
Need identification Procurement plan

Development of compliant strategy

Specifications
Contract strategy Market survey
Tender evaluation criteria

Contract Compilation of
Management tender documents
Initiation Specifications
Feedback
Monitor Terms & conditions
conclude Price schedule

4
Contract award Tender evaluation Invitation of tenders
1. Identification of Need
Responsibility for identification of requirement
- Departmental level
- Organizations level
2. Procurement Planning- S. 26(3) & Regulations 20; 21 and 22-very
critical
-no procurement shall be commenced until satisfied that sufficient
funds are set aside
3. Specification of Requirement
Purpose – To provide the information that the supplier requires in order
to reliably meet the user’s expectation.
Content – It consists of definitive descriptions on the object to be
procured.
Specifications must be clear, Accurate and Complete other wise will result
to:
 Delays and disruptions
 Additional costs due to delivery of the wrong products or services not
performed as required
Who should provide specifications?
Depending on the need, specification may be drawn by the user of the
product or service; the procurement and supply function (buyers); and or5
users and other stakeholders
4. Preparation of Tender Documents
Bidding/tender documents contain essentially the
specifications for the
goods, works or services to be procured; the conditions and
instructions to the bidders; tender forms, sample contract
e.t.c.
Particular care must be taken to ensure.
 That the goods/works/services are described with sufficient
clarity and detail to form the basis for competitive bids.
 That by no means specifications would prejudice
participation in the bidding by any qualified candidate.
 That the criteria to be followed in evaluation of bids are
disclosed.
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 That the bidding documents conform to the regulations
5. Choice of Procurement Method
6. Open tendering (LCB or ICB)-preferred method
7. Restricted tenders
8. Direct procurement
9. Request for quotations
10. Request for proposals
11. Low value procurement
12. Specially permitted procedures
Use of alternative methods-S.29
– Approval of tender committee required
– Justification in writing required.
No order splitting to avoid use of the procurement
procedures
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Preferences and Reservations S.39 & Reg. 28
Preferences and Reservations shall –
1. be non-discriminatory in respect of the targeted
groups;
2. allow competition amongst the eligible;
3. be monitored and evaluated.

To qualify for a specific preference or reservation, a

candidate shall provide evidence of eligibility.
In applying the preferences and reservations exclusive
preference
shall be given to citizens of Kenya where –
1. the funding is 100% from the Government of
Kenya or a Kenyan body; and
2. the amounts are below the prescribed threshold-
Reg.
Tuesday, June 28
17, 2025 8
A margin of preference may be given –
1. in the evaluation of bids to candidates offering goods
manufactured, mined, extracted and grown in Kenya; or
2. works, goods and services where a preference may be
applied depending on the percentage of shareholding of
the locals on a graduating scale as shown below
Exclusive Preferences (reservations) to citizens of Kenya
applicable threshold- 39(8)(a)(ii)& Reg. 28(1)
– goods and services Ksh. 50 M.
– Works Ksh. 200M.
Section 39(8) (b) (i) goods – 15%
Section 39(8) (b) (ii)
– Less than 20% shareholding 6%
– Less than 50% but more than 20%
shareholding 8%
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C: Submission of bid Documents
- provision of tender box {S. 58, Reg. 44}
- no late tenders
D: Opening of Bids (S. 60 Reg. 45)
- tendering opening committee
- bidders may participate
- tender opening minutes must be prepared and
signed by each member {S. 60(8) and 9}

No bid shall be rejected or an opinion/judgment voiced

as to its responsiveness at the bid opening, except for
late bids.
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E: Bid Evaluation (S. 66 & Reg. 16, 47-52)
Preliminary evaluation-rejection of tenders do not satisfy the requirements
(Reg.47)
Technical Evaluation-comparing each tender to the technical requirements of the
description of goods, works & services.
-Return of financial bids unopened for bids that fails technical evaluation- Reg. 45(2)
Financial Evaluation- comparing tenders to determine the evaluated price of each
tender to be completed within 5 days from time of completion of Technical
Evaluation
Reg. 50& Reg 16(7)(b)
-Evaluation to be done using criteria set out in the tender documents-S.66(2)
-Evaluation to be concluded within 30 days after opening of tenders documents-S.
66(6) & Reg.46
-Evaluation report to be prepared by the committee- see Reg. 51 for the contents
Post qualification- where indicated in the tender documents a PE may, prior to
award
of the tender confirm the qualifications of the lowest evaluated tenderer

NO member of the tender committee to be in the evaluation committee Reg. 16(4)

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E: Award of Tender
Tender committee Quorum to be FIVE including the
Chairman
• Decision of the Committee shall be by consensus
and where no consensus decision shall be made
through voting by simple majority, if there is a tie
the Chairman shall have a second and a casting
vote
• A member with interest ( direct or indirect) in the
matter being deliberated shall declare the interest
and shall not participate in the deliberations
• T.C. shall not to modify evaluation report and shall
not reject any submission without justifiable &
objective reasons-Reg. 11(1) and (2)
• Minutes of T.C. to be prepared Reg. 12(6) 12
Bidders’ Appeals and Complaints
Bidders has a right to seek administrative review on PE’s
decisions
from Administrative Review Board (ARB)-Review S.93(1) &
Reg 73
which is additional to other legal remedy the person may
have. S 99

Matters not subject to a review:

 Choice of procurement procedure
 Rejection of all tenders/termination of procurement
proceedings
before awarding a contract
 Signed contracts
 Frivolous appeals.
• Tuesday, June 17, 2025
Suspension of proceedings upon request for review 13
5. Contract Management
- Execution of contract
- Inspection and quality assurance-by
inspection & acceptance committee
- Follow up and expediting
- Handling, claims, disputes and appeals
- Administering payment provision
-payments- S. 48 payments of interest on undue
payments in accordance with prevailing
commercial banks rates

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• Variations to Contracts-s. 47 And Reg. 31
 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 not to exceed 10% of
the original contract quantity
 Quantity variation for works not to exceed 15% of
the original contract quantity.
• Contract Termination-Reg.32
– To be approved by the tender committee.

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Procurement Methods

Open Tendering
 The preferred method of procurement
 Fairest to the PE and to tenderer.
 Allows all eligible bidders to participate
 Allows maximum competition
 Bid advertised:
 Nationwide newspaper: twice, 2 yrs publication
 website of PE
 Premises of PE
 Min tender period 21 days

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 International Open Tender
if required for effective competition
• ITT & docs in English
• Advert in English publication with
circulation outside Kenya
• technical requirements based on
international stds
• Bids quoted in widely used intern’l
currency
• conditions as used in international trade
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 Restricted Tendering (S. 72 & 73; Reg. 23, 24, 25,
53& 54 )
only if
• competition is limited due to complexity or
specialization
• time & cost to examine a large number of tenders
would be disproportionate; and
• there are only a few known suppliers or
• state security is involved
• Under Sec.73(2)(b) PE to invite bids from at least 10
persons from list maintained under R. 8 (3) (a)
 Time for prep. & submit bids at least 14 days.
 PE to furnish PPOA with written report within 30
days after the contract is entered into.
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 Direct Procurement (S.29, 74& 75; Reg. 62)
only if
• Only one person can supply
• No reasonable alternative or substitute
• there is urgent need
• Other methods impracticable and circumstances
were not foreseeable or result of PE’s dilatory
conduct
• PE negotiates for supply
• Contract in writing, signed by both parties
– At the prevailing real mkt price
– Reported to PPOA within 14 days of notification
of award for exceeding 500,000/=
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Request for Proposals
• For services or comb. of goods and services
• services are advisory/ predominately intellectual
• notice in 2 national newspapers
• Qualified interested parties given RFP and TOR
• PE evaluates each technical proposal
– score given in line with stated criteria
• Technically successful advance to financial eval.
• awarded to bidder with highest total score

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• PE may negotiate, request & permit changes
to contract only if:
– different price only for proportionate
increase/reduction in supply
– variations would still leave proposal
successful
• contract must be in writing & state max
money payable, or
• Max time that can be spent
• RFP contract cannot lead to a follow-on or
related
Tuesday, contract
June 17, 2025 21
Request for Quotations
• For goods readily available & with an est.
market
• estimated value less than
– 1M KShs (goods/services)
– 2M KShs (works)
• Issued to suppliers chosen by PE competitively
• minimum 3
• must allow adequate time to prepare quotations
• lowest price wins
• PE issues PO, confirmed in writing by bidder
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Low Value Procurement
• up to KShs 30,000 - A,
• if no benefit from other procedures
• not to avoid competition
• if recommended by procurement committee
• direct shopping
• original invoice or receipt signed by person
undertaking the procurement

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Specially Permeated Procedures
 Provided for under Section 92 of the
PPDA Act, 2005 and Regulation 64 of
PPDR, 2006

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Threshold Matrix
 Under 1st schedule of the PPDR 2006.
 3 classes of PEs: A, B, C
 Max. & Min. levels of expenditure per method
 Person responsible for proc. initiation per
method
 Body responsible for awards per proc method
 Person responsible for sign. Per method
 Responsibility for verification of goods, works
& services

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 First schedule: Threshold Matrix:
Class A Entities

Procureme Max or min level of expenditure allowed for use of a

nt particular procurement method
Methods
Goods Works Services Award by:

Internation Max .as per Max .as per Max .as per Tender
Budget for Budget for Budget for Committee
al Open
the the the
Tender
Procurement Procurement Procurement
No Min. No Min. No
level level Min .level
National Max .as per Max .as per Max .as per Tender
Open Budget for Budget for Budget for Committee
Tender the the the
Procurement Procurement Procurement
Min. level Min. level Min. Level Tender
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Kshs, 6Mill. Kshs,6,Mill. Kshs3Mill. Committee
 Threshold Matrix: Class A PEs

Procurement Max or min level of expenditure allowed for use of a

Methods particular procurement method

Goods Works Services Award by:

Max .as per Max .as per Max .as per Tender
Restricted Committee
Budget for Budget for Budget for
Tendering
the the the
s.73(2)
Procurement Procurement Procurement
(a )the Act

Min Kshs Min Kshs Min Kshs Tender

20Mill.Belowt 20Mill..Below- 20Mil..Below- Committee
his,use open open tender open tender
tender

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 Threshold Matrix: Class A PEs

Procureme Max or min level of expenditure allowed for use of a

nt particular procurement method
Methods

Goods Works Services Award by:

Max. Kshs Max. Kshs Max. Kshs Tender

Restricted
Tendering 20Mill.Above- 20Mill..Above - 20Mill.Above Committe
s.73(2)(b) open tender open tender use open e
the Act tender

Min. Kshs Min. Kshs Min. Kshs 3Mill. Tender

3Mill. 5Mill. Below use Committe
Below use Below use Quotation e
Quotation Quotation
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 Threshold Matrix: Class A PEs

Procuremen Max. &Min. Level of expenditure allowed for use of

t particular procurement method
Method
Goods Works Services Award
by:
Restricted Max. Kshs. Max .Kshs. Max. Kshs. Tender
Tendering 20Mill.Above 20Mill.Above- 20Mill.Above Committ
s.73(2) (c) -Open Open Tender Open Tender ee
the Act Tender

Min. Kshs Min. Kshs Min .Kshs Tender

1Mill. 2Mill . 1Mill. Committ
Below- Below- Below- ee
Quotations Quotations Quotatitons

Tuesday, June 17, 2025 29

 Threshold Matrix: Class A PEs

Procuremen Max. Min. Level of expenditure allowed for each procurement

t method
Method
Goods Works Services

Request for Method not Method not No Max, Tender

proposals applicable applicable or Min Committee
s.76(1) of for goods for works
the Act
Direct No Max, No Max, No Max, Tender
Procuremen or Min or Min or Min Committee
t
Procurement
s.74 (2) and
Committee-
(3)
Below
kshs500,000
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 Threshold Matrix: Class A PEs

Procureme
Max Min expenditure allowed for procurement method
nt Methods
Goods Works Services Award by:
Quotations Max. Kshs Max. Kshs Max .Kshs Tender
s.88 of the 1Mill. 2Mill. 1Mill. Committee
Act Procurement
Committee-
BelowKshs500,0
00
Low value Max Max. Kshs Max. Kshs User
s.90 of the Kshs30,000 30,000 per 30,000 per
Act Per procureme procureme
procurement nt nt
per item
Tuesday, June 17,
No2025
Min. No min. No Min user 31
Disposal of Stores &Equipment (Section
126-132)
• The accounting officer of a public entity shall be
primarily responsible for ensuring that the public
entity fulfils its obligations as far as disposal is
concerned
• Disposal committee to be established by every
procuring entity
• Disposal procedure- employee in charge of
obsolete, unserviceable or surplus stores or
equipment to bring the matter to the attention of
the disposal committee
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Reporting requirements to
Authority
Contracts valued at Ksh. 5m and above- S. 46(1)
Direct procurement value exceeding Ksh. 500, 000- done
within 14 days of the notification of award-Reg. 62(3)
Disposal to employees- done within 14 days of the
disposal –Reg. 93(2)
Termination of procurement proceedings-S. 36(7)- done
within 14 days of termination of the procurement
proceedings- PPOA CIRCULAR N0.4/2009

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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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