The Ministry of Defence has been ordered to explain why it rejected a bid by APA Insurance to provide indemnity cover for the Head of State’s aircraft as required by law.
The Public Procurement Administrative Review Board said the Principal Secretary for Defence should disclose the reasons for the disqualification of APA Insurance for the provision of insurance cover for VVIP Fokker Aircraft.
The plane is the official aircraft used by the Commander in Chief of the Kenya Defence Forces for official duties.
The procurement watchdog was informed that the craft’s old insurance by APA expired on midnight of September 23, 2024, when the new disputed contract was signed between the Ministry and Britam General Insurance Company Limited which had successful bid for the job at a cost of Sh49.6 million.
“Consequently, the board deems it fit to nullify the Applicant’s Letter of Notification of Intention to Award the subject tender dated August 28, 2024 to enable the 1st Respondent (Ministry of Defence) to notify the Applicant of the outcome of the evaluation of its bid document and the subject tender by Section 87 of the Act read with Regulation 82 of Regulations 2020,” the board chaired by Alice Oeri said.
It said the accounting officer of a procuring entity while notifying the successful tenderer, must inform unsuccessful tenderers of their position giving reasons why such tenderers are unsuccessful, in line with Section 86 (1) of the Act and at what price the successful tenderer won the tender.
“These reasons and disclosures are central to the principles of public procurement and public finance of transparency and accountability enshrined in Articles 227 and 232 of the Constitution,” said the board.
Further, the Act does not require that an unsuccessful tenderer to seek clarification in order for the accounting officer to provide it with the outcome of evaluation or reasons leading to its disqualification in a tendering process, said the board.
The ministry invited bids for the provision of the cover for the aircraft and four tenderers- Mua Insurance Kenya Ltd, APA Insurance, Britam General Insurance, and Old Mutual General Insurance, submitted their bids.
At the end of the evaluation stage, one tender was determined non-responsive, while three others proceeded for evaluation at the technical evaluation stage.
Mua quoted Sh62.3 million, APA Insurance Sh50.8 million while Britam quoted Sh49.6 million.
The head of supply chain management services at the Ministry, Ms Magdaline Koech, reviewed the process and concurred with the recommendations of the evaluation committee to award the tender to Britam, as the most responsive bidder.
The board was informed that APA Insurance was the previous provider of the cover for the aircraft and it participated in the tender after being invited.
However, APA said after the submission of its bid document, there was no communication forthcoming from the procuring entity, and the underwriter was never been informed of the outcome of the process as required in the tender, the Act, and the Constitution.
The insurer accused the ministry of deliberately and inexplicably delaying to notify it of the fate of its bid contrary to law.
The ministry defended itself saying the aircraft used by the President is a serious matter of national security and there is no way the procuring entity would allow the C-in-C to be exposed to the perils that come with using an aircraft that is not adequately insured.
The Ministry of Defence maintained that APA and unsuccessful tenderers were notified and given reasons why their tenders were unsuccessful.
