Market News
Nairobi restaurant loses KDC tea contract to rival
Thursday January 11 2024
Ag Director General, Kenya Development Corporation Norah Ratemo before Departmental Committee on Tourism and Tourism at KICC, Nairobi County on June 8, 2023. PHOTO | DENNIS ONSONGO | NMG
A popular city restaurant has lost a multi-million-shilling office tea tender it had been awarded by the State-owned Kenya Development Corporation (KDC) after the Public Procurement Administrative Review Board (PPARB) vetoed the KDC board’s decision.
Azuri Café and Restaurant lost the provision of office tea and outside catering services tender to Royal Taste Kitchen Ltd, following a legal battle the latter launched before the PPARB after KDC awarded Azuri the tender.
KDC awarded Azuri the tender in November following a month-long procurement process, a decision that resulted in Royal Taste Kitchen moving before PPARB for a review. It complained that it had been disqualified despite being the lowest evaluated bidder.
Royal Taste Kitchen argued before the Board that despite quoting the lowest price at the final stage of the tendering process, KDC denied it the tender on grounds that its tax compliance certificate had been withdrawn.
Read: Storm in NSSF tea cup as tender to restart
“The first respondent [KDC] is hereby ordered to reconvene and direct the Evaluation Committee to make a fresh recommendation of award of the subject tender to the lowest evaluated tender [by Royal Taste Kitchen], taking note of the Board’s findings, within seven days,” PPARB said in a decision issued on December 22, 2023. A total of 13 companies submitted tenders by the deadline of October 13, 2023, out of which six qualified at the preliminary and technical evaluation stages.
At the financial evaluation stage where bidders were evaluated based on the price, they would charge KDC for the services of serving a maximum of 256 cups of office tea daily, four companies were dropped, with Azuri and Royal Taste Kitchen qualifying after they quoted the same and the lowest offer.
“At the end of the evaluation at this stage, it was established that the applicant (Royal Taste Kitchen) and the interested party (Azuri Café and Restaurant) quoted the same tender price which also happened to be the lowest evaluated price,” the Board’s document notes.
This caused KDC’s tender evaluation committee to invite the two to submit their best and final offer to break the tie, as it also recommended carrying out due diligence on them.
At the final stage, Royal Taste Kitchen submitted the lowest offer (which was not disclosed in the Board’s documents), against Azuri which was awarded the tender at a cost of Sh40 for a cup of tea supplied to KDC.
At maximum delivery, the Sh40/cup tender would mean Azuri would make Sh10,240 each day it delivered its services for the morning and evening sessions, before factoring outside catering services.
KDC said it awarded Azuri after it noted that Royal Taste Kitchen’s tax compliance certificate had been withdrawn.
But Royal Taste Kitchen was about a week after KDC awarded Azuri the tender move before the Board on December 4 requesting for review of the process, which resulted in the board’s nullification of the KDC decision on December 22.
Read: Tea-making tender brews storm for energy agency after bidder appeals
“The first respondent (KDC Director-General) is hereby ordered to reconvene and direct the evaluation committee to make a fresh recommendation of award of the subject tender to the lowest evaluated tender, taking note of the Board’s findings above, within seven days from the date of this decision,” the Board ordered.
The Board also nullified the letter announcing Azuri as the winning tender and faulted KDC’s decision to disqualify Royal Taste Kitchen on the basis of its tax compliance certificate, arguing that “validity of documents submitted in response to an invitation to tender should be gauged on their validity as at the tender submission deadline.”
In its submissions before the Board, KDC admitted that Royal Taste Kitchen submitted the lowest evaluated tender price but indicated that it disqualified it after noting its tax compliance certificate had been withdrawn, even though it was valid at the preliminary tender evaluation stage.
