The public procurement watchdog has nullified a decision of the Kenya Airports Authority (KAA) to terminate a Sh117 million tender for the installation of security check systems in five airports, including Jomo Kenyatta International Airport.
The project, which had a budget of Sh166 million, was terminated in April 2024 due to insufficient funds, despite KAA having commenced a new procurement process with a budget of Sh284 million.
The Public Procurement Administrative Review Board (PPARB) ruled that termination of the procurement proceedings was illegal, as the necessary statutory procedures had not been followed.
The PPARB added that KAA had failed to explain how it had run out of the allocated funds for the project, even before the tendering process started in September 2023.
“The board observes that there is no documentation or record demonstrating that the allocated budget for the first tender was part of a consolidated budget as pleaded by KAA and how the said consolidated budget was depleted before the procurement process was completed. There is also no evidence of re-allocation of the approved budget for the first tender within the financial year in which its procurement proceedings were commenced,” PPARB said.
In the absence of evidence of inadequate budgetary allocation, it was difficult to conclude that there were no funds to finance the contract which had been awarded to Blits Proof Group Limited.
The company won the tender in March 2024 after fulfilling the evaluation criteria and emerging as the lowest bidder with a quotation price of $905,406.68 (Sh117.2 million).
The tender had attracted six bidders - Circuit Business Systems Kenya Ltd, Brinker Solutions Ltd, Biometrics Technology Ltd, House of Procurement Limited & Unival Group Gmbh, Securex Agencies (K) Limited & KGT Kenya Limited, and Blits Proof Group Ltd.
The winning bidder was notified of their successful bid on March 6, 2024, but the contract was not executed due to financial concerns on the part of KAA. Blits had accepted the award and had submitted a performance guarantee.
More than a year later, on April 4, 2025, KAA terminated the procurement process, citing a lack of funds, and informed the bidders of the cancellation. However, KAA commenced a fresh procurement process just days later with a budget of Sh284 million.
KAA also said the termination was due to Blits’ withdrawal of the performance guarantee (the document that legally confirms a contractor will complete the project).
Blits was disappointed by the termination and requested that the PPARB review the decision, arguing that the new tender was similar to the previous one.
The company claimed that KAA had deliberately avoided entering into a contract with them, despite having awarded them the tender, and that there was no evidence of inadequate budget provision.
Blits also queried how KAA could claim not to have a sufficient budget when it had requested an even higher budget for the second tender, noting the increase in budget from Sh166 million to Sh284 million.
The tender was for “supply, delivery, installation and commissioning of security screening equipment -2D cabin size x-ray machine, walk through metal detector and Ups for Kenya Airport Authority”.
The locations provided were Jomo Kenyatta International Airport, Moi International Airport, Wilson Airport, Eldoret International Airport and Kisumu International Airport.
In the second tender, KAA divided the contract into two lots with different scopes of work. Lot A covered installations at Moi International Airport, Ukunda Airport, Malindi, Lamu, Kisumu, and Wajir Airports, while Lot B covered Moi International Airport and Wilson Airport.
“The board’s considered view is that having extended the tender validity period in the first tender, the same ought to be implemented as is at the point of award and the attendant contract ought to capture the scope of works as laid out in the first tender’s Tender Document,” said PPARB.
In response, KAA had pointed to an internal memo by its General Manager of Finance indicating that the available budget was Sh51 million, whereas the company’s bid price of $905,406.68 (about Sh117 million) meant that it was impossible to issue a contract in the circumstances.
KAA also stated that the two tenders were dissimilar, and that it had initiated a new procurement process for the 2024/25 financial year based on user requirements and the availability of funds for that fiscal year.
Upon termination of the tender, it submitted that all bidders were notified in line with Section 63 of the Public Procurement and Asset Disposal Act.
However, the procurement disputes board rejected the explanation and ruled in favour of the company. It also ordered KAA to proceed with the procurement process to its logical and lawful conclusion within 60 days.
Blits was ordered to submit to a fresh performance guarantee for the contract.
