Decision No.60 Of 2022 Olivile Ent Ltd Vs National Droughts Management Authority

The case involves a dispute over the withdrawal of Lot 11 (a Toyota Land Cruiser) from a tender process by the National Drought Management Authority (NDMA). Olivile Enterprises Limited, the highest bidder at Kshs 810,000, challenged the NDMA's decision to withdraw the lot after the evaluation process, arguing it violated Section 63 of the Public Procurement and Asset Disposal Act. The NDMA claimed the withdrawal was due to a tight fiscal framework and a National Treasury advisory, but the Board found the procedure flawed as the technical report justifying withdrawal was submitted post-evaluation. The Board ordered the NDMA to reinstate the tender and proceed to a logical conclusion.

The primary issue addressed was whether the Procuring Entity properly justified withdrawing Lot 11 from the tendering process under Section 63(1)(a)(i) of the Act, which permits termination if procurement is overtaken by operation of law. The Applicant argued the withdrawal violated procedural requirements by occurring post-evaluation and relied on an advisory from the National Treasury, which they claimed is subordinate legislation and cannot override parliamentary acts. The Board examined whether the Treasury's advisory constituted a valid 'operation of law' and whether the Procuring Entity followed mandated disposal procedures under Sections 163-166 of the Act.

The Public Procurement Administrative Review Board determined that the National Drought Management Authority's withdrawal of Lot 11 from the tendering process was not in compliance with Section 164 of the Public Procurement and Asset Disposal Act. The Board found that the procurement entity failed to adhere to the required disposal procedures by not submitting the technical report to the disposal committee before tender advertisement. The withdrawal during the evaluation stage, based on a post-hoc reliance on a National Treasury letter, was deemed irregular. The Board ordered the cancellation of the procurement entity's decision to withdraw Lot 11 and mandated re-admission of the Applicant's tender to proceed to a logical conclusion.

The Board emphasized that the Procuring Entity must strictly follow legal procedures for asset disposal as outlined in the Public Procurement and Asset Disposal Act (PPDA) 2015. It held that the termination of Lot 11 was irregular because the technical report justifying withdrawal was not submitted to the Disposal Committee prior to tender advertisement, violating Section 164 of the Act. The decision also clarified that an advisory from the National Treasury, while relevant, cannot override statutory requirements unless it constitutes a new law affecting procurement processes.