Kenya has stable PPP legal and regulatory framework which comprises of the Constitution of Kenya 2010, the Public Private Partnership Act Cap 430, the Public Procurement and Assets Disposal Act ,2015, court rulings, regulations, guidelines and tribunal determination
The Public Private Partnership Act Cap 430 under section 37 provides procurement methods which a contracting authority may procure a Public Private Partnership Project.
A Public private partnership may be initiated through:
a. Direct procurement. ( Section 38)
b. Privately-initiated proposals (Section 40)
c. Competitive bidding (Section 46)
d. Restricted bidding (Section 45)
A. Direct Procurement.
A contracting authority in consultation with the directorate may use direct procurement if the conditions under section 38 are satisfied inter alia: the private party possesses the intellectual property rights to the key approaches or technologies required for the project, the works and services are only available from a limited number of private parties etc.
A contracting authority is required to:
a. Issue a tender document which shall be the basis of the tender preparation by the contracting authority and subsequent negotiations
b. Appoint an evaluation committee in accordance to the Act for negotiation of a direct procurement of a project.
c. Ensure appropriate approvals under this Act have been granted;
d. Ensure that the resulting project agreement complies with this act;
B. Private- initiated Proposals
A private party may submit a privately-initiated proposal to a contracting authority.
A contracting authority may consider the privately-initiated proposal submitted if:
a. The project is aligned with the national infrastructure priorities and a demonstrated societal need.
b. The project provides value for money;
c. The project proposal provides sufficient information for the contracting authority to assess fiscal affordability and the potential contingent liability implication of the proposal;
d. The project can be delivered at a fair market price;
e. The project is supported by all documents
f. The project supports the efficient transfer of risk from the public sector.
The contracting authority shall submit the privately-initiated proposal to the directorate
The directorate and the contracting authority upon evaluation of the privately-initiated proposal, may or may not approve the private-initiated proposal. Such approval however shall not create an obligation on the part of the directorate, contracting authority or the government towards the private party.
C. Restricted bidding
A contracting authority may use restrictive bidding if any of the following conditions are satisfied:
a. Competition for contract, because of the complex or specialized nature of the works and services is restricted to prequalified tenderers;
b. The time and costs required to examine and evaluate a large number of tenders would be disproportionate to the value of the works or services procured.
c. If there is evidence to the effect that there are only a few known suppliers of the whole market of the works or services;
d. An advertisement is place where applicable on the procuring entity website regarding the intention to procure through limited tender.
D. Competitive Bidding
A contracting authority shall on approval of a feasibility report, invite requests for qualifications from qualified bidders with respect to the proposed project.
A contracting authority shall specify the eligibility criteria of a bidder and may require each bidder to provide statements or documents to prove the bidder’s eligibility.
A private party intending to respond to a request for qualification under competitive bidding may do so as part of the consortium of the private parties.
A private party is eligible to respond to a request for qualification if the party:
a. Satisfies the criterial specified in the request for qualification issued by the contracting authority.
b. Has the technical and financial capacity to undertake he proposed project;
c. Has the legal capacity to enter into a project agreement with the contracting authority;
d. Is not insolvent, in receivership, bankrupt or in the process of being wound up.
The contracting authority shall upon issuing a notice constitute a pre qualifying committee for the purpose of pre-qualifying bidders.
A bidder may be disqualified at the pre-qualification stage if they provide false, inaccurate or incomplete information, colludes, connives and is involved in any corrupt or any dishonest practice intended to confirm unfair advantage over other bidders.
After pre qualification and short listing of pre-qualified bidders, the contracting authority shall prepare tender documents in relation to a project for the purpose of inviting bids from eligible bidders.
A bidder intending to bid shall complete and submit a technical and financial bid. Upon evaluation of the bids the evaluation team may reject a bidders submissions where the bidder fails to comply with the conditions specified in the tender documents.
A bidder whose bid has been rejected under section shall not be entitled compensation
On approval of the project, the contracting authority shall notify in writing all bidders of there decision.
The contracting authority shall then proceed to execute the project agreement and the private party shall be required to commence the project within 12 months.
The contracting authority reserves the right to cancel a tender process at any time before the execution of the project agreement if it is in the public interest to do so.
Prepared By:
PATRICKS LAW ASSOCIATES
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