IEBC Kenya: Admits Tender Performance Security Error

• The Independent Electoral and Boundaries Commission (IEBC) admitted an error in its tender for a new Integrated Elections Management System (IEMS).
• The IEBC mistakenly set the performance security requirement at 20% of the contract price, exceeding the legal limit of 10%.
• Galadirel Investments Limited challenged the tender, citing this error and other alleged omissions, contradictions, and unclear requirements.
• The Public Procurement Administrative Review Board (PPARB) is reviewing the dispute and is expected to issue a determination within 21 days.
• The tender is for a system crucial for the 2027 General Election, and the IEBC has requested the challenge be dismissed to proceed with procurement.

This case serves as a critical reminder for legal professionals advising bidders on Kenyan public tenders to meticulously scrutinize performance security requirements to ensure strict compliance with statutory limits.

The Independent Electoral and Boundaries Commission (IEBC) has publicly acknowledged a significant misstep in its tender documentation for a new Integrated Elections Management System (IEMS). The commission informed the Public Procurement Administrative Review Board (PPARB) that it erroneously stipulated a performance security requirement of 20 percent of the contract value for prospective bidders. This figure substantially exceeds the legal maximum, which mandates that performance security should not surpass 10 percent of the contract price. The IEBC has indicated its intention to rectify this oversight by preparing an official addendum to amend the tender document.

This admission emerged during proceedings initiated by Galadirel Investments Limited, which formally challenged the procurement process. The tender, originally advertised on August 11, has been scrutinized by Galadirel, which contends that the IEBC's documentation contains numerous omissions, contradictions, and unclear requirements. These alleged deficiencies, according to Galadirel, could compromise the integrity of the bidding process.

Galadirel Investments Limited's challenge extends beyond the performance security error, asserting that the tender violates fundamental constitutional principles. The company argues that the procurement process fails to adhere to Article 227 of the Constitution, which mandates that public procurement must be conducted in a manner that is fair, equitable, transparent, competitive, and cost-effective. A key point of contention raised by Galadirel, represented by lawyer Julius Miiri, is the KSh 30 million tender security requirement. The challenger questioned the basis for this specific amount, given that the tender document itself did not specify the overall value of the contract, a detail Galadirel claims is contrary to Section 61 of the Public Procurement and Asset Disposal Act (PPADA).

The company further contends that the tender's material omissions, contradictions, and undefined or incomplete provisions could severely impede how bidders formulate their proposals. Such shortcomings, Galadirel argues, risk undermining fair competition, objective evaluation, comparability of bids, and the equal treatment of all potential tenderers. In response, the IEBC has largely dismissed these broader allegations, maintaining that the tender is fundamentally sound. The commission characterized the excessive performance security provision as an isolated error that it is actively working to correct. Regarding the KSh 30 million tender security, the IEBC defended its approach by explaining that the procurement is structured as a framework contract, a scenario where procurement law permits tender security to be prescribed as an absolute monetary amount rather than a percentage of an unspecified contract value. The IEBC also refuted claims that the tender specifications were crafted to unfairly benefit Miru Systems Limited, labeling such accusations as speculative and noting that Galadirel had not identified any specific requirement that would confer an undue advantage. The commission underscored the stringent nature of its requirements, stating that bidders must satisfy all mandatory conditions to qualify, emphasizing a "100 percent compliant" standard. Furthermore, the IEBC clarified that bidders are required to demonstrate tax compliance through relevant documentation recognized in their respective countries and highlighted a 40 percent local content requirement, aimed at fostering local participation and facilitating skills and technology transfer.

The Public Procurement Administrative Review Board (PPARB) is currently deliberating on these complex issues, with a determination expected within 21 days. The IEBC has formally requested the Board to dismiss Galadirel's challenge and lift the suspension on the procurement process, which would allow the commission to advance to the subsequent stages of acquiring the new Integrated Elections Management System. This system is crucial for supporting key election administration functions in anticipation of the 2027 General Election.

This case serves as a critical reminder for legal professionals advising bidders on Kenyan public tenders to meticulously scrutinize performance security requirements to ensure strict compliance with statutory limits. It also underscores the vital role of the Public Procurement Administrative Review Board in upholding procurement integrity and addressing irregularities, even when major government entities like the IEBC are involved. The allegations brought forth by Galadirel Investments Limited remain subject to the final ruling of the procurement review board, which will ultimately decide the fate of this significant tender.

Lawyers advising bidders on Kenyan public tenders should note this case as a reminder to scrutinize performance security requirements for compliance with legal limits. It highlights the Public Procurement Administrative Review Board's role in addressing procurement irregularities by even major government entities like IEBC.

Source: Original reporting via Kenyan news sources.