State ties government tenders to housing, health levies
PPRA boss directs agencies to ensure bidders comply with statutory requirements.
It will now be mandatory for bidders to comply with the requirements of the Affordable Housing Levy and the Social Health Insurance Fund (SHIF) statutory obligations to win government business, states new guidelines by the Public Procurement and Regulatory Authorit.y (PPRA).
The October 27 circular by PPRA Director-General Mr Patrick Wanjuki demands that all accounting officers in government offices include this requirement when preparing tender documents.
The bidders shall also demonstrate commitment to complying with the minimum basic salary obligations, applicable statutory housing allowance, statutory deductions, employer’s contributions, National Social Security Fund (NSSF).
The circular also demands that the accounting officers in government demonstrate that the quoted tender sums provided for applicable insurance cover overhead costs and a reasonable profit margin and VAT at the prevailing rate.
“The accounting officers are advised to provide as a mandatory requirement in the tender documents issued to tenderers that where a procurement process results in a bid whose tender sum is less of these requirements, such a bid should be declared nonresponsive,” the circular reads.
These mandatory requirements apply “irrespective of whether a tenderer had met all other mandatory eligibility and technical qualification requirements.”
“All accounting officers are required to note and bring the content of this circular to the attention of all officers involved in public procurement and asset disposal activities within their jurisdiction,” says Mr Wanjuki.
The PPRA is mandated to monitor, assess and review the public procurement and system to ensure that it respects national values. The circular notes that in the course of executing its regulatory mandate, PPRA has received complaints from procuring entities on contract implementation and challenges related to contracted services such as security, cleaning, gardening and artisan among others.
“The complaints centre on the contracted service providers’ failure to respect their employees’ right to fair labour practices including but not limited to the right to fair remuneration as set out in the published government minimum wages regulations,” says Mr Wanjuki.
Until the circular was issued, procuring entities in government have been limited by the technical and financial capability of the bidders to award tenders.
This comes as data from the National Treasury shows that over Sh10 billion is owed by the country’s state corporations unremitted statutory deductions that include Sh9.25 billion Pay As you Earn (Paye) to Kenya Revenue Authority, Sh991.29 million in staff Sacco deductions, Sh95.55 million to NSSF and Sh72.42 million for NHIF. At least Sh21.82 billion is in pension arrears and over Sh3 billion worth of unpaid staff loans and other deductions.
During the contract monitoring period, the accounting officers must ensure that service providers remunerate their staff in line with the prescribed government minimum wage.
