Kenya Power offices on Aga Khan Walk in Nairobi.
The public procurement watchdog has partially cancelled a Sh6.7 billion Kenya Power tender for supply of smart meters issued to seven local manufacturers and assemblers.
While ordering the annulment and setting aside of some categories, the Public Procurement Administrative Review Board (PPARB) found that the electricity distributor failed in transparency and fairness test.
The board found that due diligence was conducted selectively, contrary to the law.
“A transparent procurement system, as envisaged by the law, would ordinarily require that due diligence be conducted on entities with no prior record of supply with the procuring entity.
"In the present case, several entities with no history of dealings with the procuring entity were not subjected to any due diligence,” said the tribunal. It added that the evaluation was also inconsistent.
The contract was to be issued to Smart Meter Technology Ltd, Inhemeter Africa Company Ltd, Magnate Ventures Limited, East Africa Meter Company Ltd, Hexing Technology Company Ltd, House of Procurement Limited, and Abcos Industrial Limited last month.
The tender was in two categories and two lots. Companies were to supply 637,000 single-phase smart meters cumulatively.
The ruling shows that Smart Meter Technology Ltd was to be awarded a Sh2.4 billion contract, while Inhemeter Africa Company Ltd was to supply metres worth Sh610.7 million and Magnate Ventures Limited Sh650 million.
East Africa Meter Company Ltd was to get a contract for Sh859.5 million, Hexing Technology Company Ltd (Sh769 million), House of Procurement Limited (Sh404.8 million), and Abcos Industrial Limited (Sh950 million).
Another finding was that the letters of notification of intention to award did not comply with the law.
Upon examination of the letters, the board noted that while the successful tenderers were disclosed, unit prices for each lot awarded were not provided.
“The board finds that the absence of such details rendered the notifications inconsistent with the requirements of Section 87(3)(b) of the Act,” said the board chaired by Joshua Kiptoo.
The findings emerge following a request for a review filed by Chinese company Chint Meters & Electric Kenya Company Limited.
The firm added that the mode of award applied to Categories 2 and 3 was unlawful.
This is because there was no detailed summary of the evaluation and comparison of tenders prepared and provided in line with the prescribed evaluation criteria.
“The board observed that the mode of award applied was unpredictable and inconsistent, thereby failing to guarantee a transparent procurement process.
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"By way of illustration, the lowest evaluated bidder was not assured of award in any given lot, owing to the contradictory and convoluted nature of the mode of award, which rendered the outcome uncertain and incapable of objective prediction,” it ruled.
In the application for review, the Chinese company, through its managing director Gan Zemin, claimed that its bid was dismissed before any substantive technical or financial evaluation.
The company said rejection of its tender on grounds of non-responsiveness and uncompetitive pricing was premature and unlawful.
Another claim was that notification of intention to award dated July 17, 2025, was ambiguous and misleading.
It insisted that it had submitted competitive pricing, and some of the successful bidders quoted higher prices, rendering the reasons given for rejection unreasonable.
