The State Department for National Government Coordination attempted to cancel a Sh50 million tender to renovate the Prime Cabinet Secretary’s offices, claiming funds were diverted to accommodate 51 newly deployed officers.
The High Court has dismissed an attempt by the State Department for National Government Coordination to overturn a decision that revived a Sh50 million tender for renovation works at the Office of the Prime Cabinet Secretary.
In a judgement delivered on July 24 2026, Justice Nabil Orina ruled that the Public Procurement Administrative Review Board acted within the law when it questioned the government’s decision to cancel the tender, saying the Board was entitled to verify whether there was sufficient evidence of a budget shortfall before accepting the cancellation.
The dispute revolved around Tender No. SDNGC/ONT/01/2025-2026 for renovation works at the Prime Cabinet Secretary’s offices located at the Kenya Railways Headquarters.
“Having carefully considered the record, this Court is satisfied that the Board properly exercised its jurisdiction in evaluating the evidence in order to be satisfied that the termination had complied with the law,” the judge said.
An aerial view of Nairobi City overlooking the Kenya Railways Headquarters as pictured on December 14, 2022.
The State Department terminated the procurement process on April 24, 2026, before a contract was signed.
It said it no longer had enough money to proceed after 51 newly recruited officers were deployed to the department, forcing it to divert funds to office space, furniture, ICT infrastructure and other operational needs.
The cancellation was challenged by Fossil Agencies Limited, one of the bidders, before the Public Procurement Administrative Review Board.
The Board found that the government had failed to prove the alleged budget constraints and ordered the procurement process to resume
The State Department then moved to the High Court, arguing that once it had terminated the tender because of inadequate budgetary provision, the Board had no legal authority to hear the complaint.
But Justice Orina rejected that argument.
He said the Board was not required to simply accept the government’s explanation at face value.
Instead, it had the power to first determine whether the cancellation met the legal requirements before deciding whether it had jurisdiction over the dispute.
The judge said allowing public entities to avoid scrutiny merely by citing budget constraints would undermine accountability in public procurement.
Kenya Railways Headquarters on September 7, 2012.
He observed that procurement laws were designed to promote transparency and prevent abuse of public resources.
The court added that the Board was right to examine whether there was credible evidence showing that funds had genuinely become unavailable before accepting the termination.
Court records showed the renovation project had been budgeted at about Sh50 million.
The procurement had progressed through the normal stages.
The tender had been advertised in March 2026.
Twelve bids were received and evaluated.
Fossil Agencies Limited emerged as the lowest evaluated responsive bidder with a bid of Sh46.5 million.
A professional opinion recommending award of the contract had already been prepared before the procurement was abruptly cancelled.
The judge noted that the State Department relied mainly on a letter requesting the National Treasury to reallocate the funds.
However, no evidence was produced to show the Treasury had approved the request.
He also found that the recruitment of the 51 officers had taken place months before the tender was advertised.
That, he said, weakened the government’s argument that the staffing changes were unforeseen events that forced it to abandon the renovation project.
Justice Orina said it was possible for a procuring entity to begin a lawful procurement process and later face genuine financial difficulties.
That is why procurement law allows cancellation because of inadequate budgetary provision.
However, he stressed that such claims must be backed by clear evidence showing that the funds had actually been withdrawn or reallocated.
The judge concluded that the State Department had failed to produce sufficient proof that it no longer had money for the project.
He said the only evidence presented was a request seeking reallocation of funds, but there was no confirmation that the request had been approved.
“The Applicants failed to present before the Board sufficient evidence beyond a letter requesting for reallocation of the funds,” the judge said.
He added that the sequence of events suggested the cancellation “seems to have been an afterthought inspired by other factors beyond what is contemplated in the law.”
Justice Orina also declined to interfere with the findings of the Procurement Review Board, saying specialised tribunals are entitled to judicial deference when acting within their legal mandate.
He found no evidence that the Board acted illegally, irrationally or outside its statutory powers.
As a result, the court upheld the Board’s jurisdiction and dismissed the State Department’s case.
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