What is the role of public procurement in Kenya is our next public sector accounting topic we are going to discuss?
Summary of Contents
PUBLIC PROCUREMENT IN KENYA
The Public Procurement and Asset Disposal Act 2015 was passed by Parliament in 2015, with the full title “An Act of Parliament to give effect to Article 227 of the Constitution; to provide systems for efficient public procurement and asset disposal.”
public procurement and asset disposal by public entities; and for connected purposes,” governs public procurement in Kenya.
All state organs and public entities in Kenya are required to comply with this law in regard to planning and undertaking procurement, inventory management, asset disposal, and contract management, except where the provisions of the Public Private Partnership Act, 2013 already apply to procurement and disposal of assets, or where procurement and disposal of assets are already covered by the Public Private Partnership Act, 2013.
The National Treasury is in charge of developing public procurement and asset disposal policies, according to the law.
WHAT IS PUBLIC PROCUREMENT
The act of obtaining goods, works, and services that are related to the attainment of an organization’s objectives is known as procurement.
An organization’s resources must be obtained or constructed. The acquisition process must be conducted correctly in order for the company to get the best value for its money.
Both the business and public sectors are concerned about this. Public procurement is defined as a procurement action carried out by a public sector institution such as a ministry, department, or agency.
DEFINITIONS OF PUBLIC PROCUREMENT THAT ARE RELEVANT
include raw materials, products and equipment, solid, liquid, or gaseous objects, and electricity, as well as services incidental to the supply of the goods if the value of those incidental services does not exceed the value of the goods themselves; an example of services incidental to the supply of goods is training of staff (costs) on the use of acquired technical products.
Site preparation, excavation, erection, assembly, installation of plant, fixing of equipment and laying out of materials, as well as any incidental activity under a procurement contract, are all examples of work associated with the construction, reconstruction, demolition, repair, or renovation of a building, structure, or surface.
Accounting, banking, cleaning, consultation, education, insurance, expertise, medical treatment, and transportation are examples of intangible products. Any entity that conducts public procurement under this Act is referred to as a procurement entity.
In procurement, tendering is the procedure by which government agencies invite bids for significant projects that must be completed within a specific time frame. Normally, these invitations are made public via publication in daily newspapers.
A Request for Tenders (RFT) is a formal, structured call to suppliers to submit bids for the supply of goods or services.
A written invitation made to possible suppliers of a good or service informing them of the information needed by the buyer to make a decision.
To make a bid for something at a specific price, especially at an auction. Potential suppliers respond to tender requests by stating what they have to offer and the price they are willing to exchange those goods, contracts, and services for. Based on his or her specifications and the offers received, the bid-receiving party would next determine who to buy from.
is a plan that has been presented for consideration.
A quotation is a written declaration of a product’s, contract’s, or service’s cost.
A bid security is a sum of money determined as a percentage of a procurement requirement’s budget estimate or as a percentage of a bidder’s bid price. It serves as a deterrent to bidders who withdraw their offers before the end of their bid validity period, or who refuse to sign the contract.
Tender Validity Period
This is the time period during which the supplier is obligated by the tender’s content and terms (price, execution time, guarantee, etc.).
The amount to which one person or group receives preferential treatment over others is known as the margin of preference. For domestic suppliers/ tenderers or domestically produced goods, works, and services, the percentage reduction in the requirements of the goods, contracts, and services to be procured by a procurement unit.
PUBLIC PROCUREMENT IN KENYA HISTORY
In comparison to other Western countries, Kenya’s public procurement sector is relatively new.
There was no Kenyan government to perform public procurement because Kenya was a colonial state of the United Kingdom until the middle of the twentieth century.
The public procurement market was not regulated in the early days of the republic.
As a result, most of the laws and customs governing public procurement date from the twenty-first century.
Until the establishment of the Public Procurement Oversight Authority in 2005, treasury circulars were mostly used to regulate public procurement in Kenya.
Kenya’s 2010 Constitution established new public procurement regulations in Article 227.
This provision mandates that public procurement be conducted in a fair, equitable, transparent, competitive, and cost-effective manner. It also mandated that the Kenyan parliament implement procurement legislation that would ensure preferential contracting and requirements for disadvantaged communities.
It will also need to enact regulations imposing penalties on non-performing contractors as well as those found guilty of corruption, tax evasion, or labor law infractions.
GOVERNMENT AUTHORITIES PUBLIC PROCUREMENT IN KENYA
The Public Procurement Oversight Authority oversees public procurement in Kenya (PPOA).
The Public Procurement and Disposal Act of 2005 established the Public Procurement Oversight Authority.
The Public Procurement and Disposal Act of 2005 also established the Public Procurement Advisory Board (PPAB) and the Public Procurement Administrative Review Board, which replaced the Public Procurement Complaints, Review, and Appeals Board (PPARB).
ACCESS TO GOVERNMENT PROCUREMENT OPPORTUNITIES IN KENYA
The Access to Government Procurement Opportunities (AGPO) law, which was first enacted in 2012, set aside 10% of government contracts to be allocated to disadvantaged groups (i.e., businesses owned by young people, women, or people with disabilities) without regard for established firms. In 2013, this ratio was increased to 30%.
Micro and small businesses, local and citizen contractors, and citizen contractors in joint ventures with foreign suppliers are all covered by the AGPO program.
PROBLEMS WITH PUBLIC PROCUREMENT IN KENYA
In 2007, the Public Procurement Oversight Authority (PPOA) projected that Kenyan procurement entities were paying up to 60% more than market pricing. This indicates that Kenya’s procurement market is not competitive.
In Kenya, it is predicted that proper execution of public procurement laws and procedures can save 25% of government spending.
The OECD claims that while the legal and regulatory framework for public procurement established in the last decade has strengthened the system, flaws still persist.
Applying the newly established framework and executing the legislation pose considerable obstacles.
Other difficulties include a disproportionate reliance on quotations for procurement and considerable disparities in procurement practices amongst government entities.
INFLUENCE OF THE CHINESE PUBLIC PROCUREMENT IN KENYA
Kenya’s public procurement is closely linked to Chinese investments. The Chinese government has made significant investments in the region’s infrastructure, including giving debt to the Kenyan government to fund the hiring of Chinese corporations to complete infrastructure projects. The pipeline connecting Nairobi and Mombasa is a good example of this.
Opposition politicians have questioned the use of public funding to give contracts to Chinese corporations, claiming that these firms frequently hire Chinese labor, limiting job chances for Kenyans.
In 2015, Parliament passed the Public Procurement and Asset Disposal Act. Public procurement and asset disposal policies are developed by the National Treasury.
In comparison to other Western countries, Kenya’s public procurement system is relatively recent, with most regulations dating from the twenty-first century.
Kenya’s government procurement is inextricably related to Chinese investments. The Kenyan government has borrowed money from China to fund infrastructure projects.
Opponents have raised concerns about using public funds to award contracts to Chinese corporations, arguing that these enterprises employ Chinese workers, reducing job opportunities for Kenyans.
The public sector accounting post or guides or articles are not limited to these 10 countries alone:
- United States
- South Africa
But instead targeted all the countries in the world since public sector accounting is being practice in every country in the world, so wherever country you are in the world can read public sector guides here since public sector accounting applications are similar.