IEBC ordered to amend election technology tender document

The Independent Electoral and Boundaries Commission (IEBC) has been ordered to amend its tendering document for the technology that will be used in next year’s general election.

In an indictment of the Ethekon Edung-led commission, the Public Procurement Administrative Review Board (PPARB) found that parts of the document were vague and needed amendment before the bidders were required to respond.

PPARB ordered that the deadline of September 3, which had initially been issued, should be extended by not less than seven days for anyone interested to apply for the lucrative deal.

“We therefore find that the Tender Document, as originally issued, did not in all respects satisfy the statutory and constitutional requirements applicable to the preparation and evaluation of tenders. The deficiencies identified by the board are, however, capable of being addressed through appropriate clarification, amendment or correction of the tender document,” PPARB ruled.

 The board’s panel consisting of Alice Oeri, Lilian Ogombo, and Daniel Langat first took issue with the commission’s requirement that bidders should provide evidence of technology ownership. At the same time, it also required them to attach a manufacturer certificate and/or authorization.

According to the board, the commission was unclear on the nature of evidence it needed to clearly establish ownership or dealership. It ruled that the bidder should not be left to second-guess whether it should provide evidence of ownership, whether it is a go-between or both.

Further, PPARB found that it was vague whether the tender was subject to post-qualification. It indicated that, from the document, a bidder with the lowest bid would be left wondering if the IEBC would further process the bid, or if the pre-qualification process was cast in stone; as such, it ought to get the contract.

It also noted that the requirement for a Kenya Revenue Authority (KRA) tax clearance certificate or its equivalent was equally problematic as the technology tender was an international one.

According to the board, the commission did not reveal which other documents would be acceptable or whether the tax exemption would be factored into the evaluation process.

“A tenderer who submits a document which the Procuring Entity subsequently considers not to be an "equivalent" certificate risks being found non-responsive without having been given sufficiently clear guidance beforehand as to what document foreign tenderers who may not possess documents bearing the same nomenclature or issued in the same form as Kenyan tax compliance or exemption certificates,” observed PPARB.

 It further noted that the IEBC had couched the tax compliance as a mandatory term.

The board also found that bidders were required, in some parts of the crucial documents, to either answer yes or no. It was of the view that the parameters were unclear on how they operated with the weighted scores.

For example, the board said, if a bidder replied with a yes, no one knows whether they would get a maximum score or if it was just a mere compliance answer. On the flip side, the board added that if a bidder replied no, it was unclear if they would be found non-compliant or score fewer marks.

“ The tender document ought to clearly state whether compliance with every individual parameter is mandatory, or whether alternative means of demonstrating compliance are permissible. Where a specification contains several requirements or parameters, the Tender Document should further indicate whether all such requirements must be satisfied, or whether compliance with a specified number or combination of requirements would

suffice for a tender to be considered responsive,” it continued.

The board also said that the requirements of the supplier’s technical team for the IT contract were also vague. It pointed out that although IEBC required them to indicate the relevant experience in Kenya, including working-level fluency in local languages, knowledge of local culture or administrative system, and government organization, among others, it was unclear how this would be measured to come up with a final result and how each of it was weighted.

 The board, however, dismissed the claims that the tender document had been specifically designed to favour South Korean technology firm, Miru Systems Co. Ltd. It was of the view that matching competencies did not lead one to think that the document had been tweaked for that purpose. Without the evidence, PPARB said, it was difficult to conclude that there were ulterior issues. It also dismissed the requirement for a Sh 30 million security guarantee.

Galadirel Investment Limited filed the case. It accused IEBC of tailoring the specifications of the Integrated Elections Management System (IEMS) and the Kenya Integrated Elections Management System (KIEMS) kits to fit Miru’s bidding documents.

Its lawyer Julius Miiri argued that although the tender had been floated, it had been ¬-allegedly deliberately warped to lock out all other competitors.

“The law allows any bidder to approach this tribunal before the tendering process closes,” claimed Miiri, adding that his client believed that the tender was skewed to favour

“ At page 78 on the specifications provided, and it is the applicant's case that the specifications mirror the achievements Miru system claims to have achieved,” he added.

The Ethekon Edung-led commission had also floated the tender for supply of ballot papers, among others. However, Miiri questioned why the commission had not supplied information on the value of the tender. He said that bidders were required to provide Sh 30 million as tender security.

He further said that the tendering process was similar to groping in the dark as there was no communication about the evaluation.

“ The tender documents contain vague, incomplete or undefined technical standards and specifications, including provisions which remain in the nature of instructions to the procuring entity to insert or specify the applicable standards, benchmarks and requirements, thereby exposing tenderers to uncertainty and subjective evaluation,” claimed Miiri.

 He argued that it was unclear the currency to be used in the tender, as well as the standard through which each bid will be

“ The tender document does not disclose what the tenderers are bidding for. We agree that IEBC and the PE have the authority to require experience from whoever will supply these . If you go to the website of Miru, what IEBC requires corresponds with Miru’s profile. This has been formulated around Miru’s profile,” he said.

He pointed out that, for example, IEBC requires the tenderers to have at least conducted 11 prior elections. The lawyer claimed this is a replica of Miru’s election.

In reference to local bidders, he said, the money will circulate locally. Miiri asserted that the aim of having local hands is to enable those in the industry to grow.

“ If the materials were being sourced locally, it is much cheaper,” argued Miiri.

In response, IEBC lawyers Edwin Mukele and Moses Kipkogei argued that the case was speculative. Mukele argued that Galadirel should have first sought clarifications or information where it felt the requirements were unclear.

He insisted that the Public Procurement Administrative Review Board (PPARB) has no powers to entertain the case.

Mukele further argued that the request for the review is premature. “ This is premature. For instance, the document claims that the tender document fails to provide particulars. The allegation is that the applicant has come across information... Do you want to revert to the procuring entity to verify that allegation? We are dealing with apprehension,” replied Mukele.

On the other hand, Kipkogei said that no company in Kenya or Africa was qualified or had the expertise the commission requires. He was of the view that IEBC had, however, provided a window for partnerships with local companies, where they can borrow, or there will be a transfer of technology.

“There is no bidder who can achieve those standards; I am highly doubtful you will find such a bidder in Africa. That standard has to be the highest, and it is not available locally. We do not manufacture these laptops and tablets, so, logically, we exclude and allow these bidders to deal with the challenge by use of technology transfer to local contractors,” he replied.

Kipkogei insited that everything was clear.

“Respondents deny the allegation that the tender document is vague, incomplete and contains undefined technical specifications and assert that contrary to this allegation, the tender document has elaborately set out the technical specifications of the equipment sought to be procured. For instance, the tender document from pages 149-182 sets out the specifics of the equipment under the broader headings "Technical specifications for the supply, delivery, installation, testing, commissioning, and support of the Kenya Integrated Elections Management System,”he added.

Separately, IEBC is embroiled in a separate case with the current contractor, Smartmatic International Holdings BV, over Sh 570 million alleged unpaid debt.

In its case filed before the Commercial High Court, In the case, Smartmatic claimed that the commission decided to pay for the contract in Kenyan shillings, instead of the agreed United States of America dollars.

The court heard that a dispute arose, which ended up before an arbitrator who subsequently found that the Erastus Ethekon-led commission had breached its end of the bargain.

However, the firm said that IEBC did not appeal or challenge the amount awarded during the arbitration.

“The claimant asserts that there were delays in payment contrary to the express terms of the contract. More importantly, the claimant argues that the respondent purported to apply an exchange rate meant for the purpose of assessment of the responsiveness of the tender, to payment of the invoices that had been raised and which were payable in USD.

During the arbitration, Smartmatic argued that it suffered foreign exchange loss as the IEBC used a negotiated exchange rate with its commercial banks for the dollar, which at the time of the dispute was at Sh 124.45 for a US Dollar.

It claimed the result was a loss of its margins due to the commission’s decision to pay in Kenya Shillings instead of US Dollars.

 Smartmatic said that there were attempts to amicably solve the dispute, but they proved futile.

“ The respondent herein has failed to file any application seeking to set aside the award within the timelines stipulated by the Arbitration Act, and as such, there exists no reason whatsoever to delay the recognition and enforcement of the award,” said Smartmatic’s Managing Director, Rans Gunnink.

Smartmatic was demanding at least USD 5.03 million, arguing that the commission had unsettled invoices. “ There were delays in payment contrary to the express terms of the contract,” the company argued, adding that it had done its end of the bargain by ensuring that Kenya had held its 2022 election.

It demanded that the IEBC be compelled to pay 13 per cent per annum interest, from April 1, 2024, to the date of the judgment.

On the other hand, the commission denied that there were unsettled invoices.

It argued that the exchange rate applied in the invoices was agreed upon on May 4, 2022, in the contract between them.

IEBC, however, admitted that there was an existing contract. The commission stated that the agreement was that Smartmatic would be paid within 30 days of invoicing, following delivery and acceptance of services.

It asserted that only three invoices were pending payment, and was in the process of being settled after release of funds from the exchequer.

The commission also urged the arbitrator to ignore the interest claim, arguing that the contract did not expressly provide for interest on delayed payment.

On the foreign exchange loss issue, the commission stated that the contract was fixed at Sh 107.90 for a dollar. It asserted that there were no losses, as Smartmatic was allegedly aware during the signing of the contract that the commission had settled for the exchange rate.

The commission also said that the contract was in Kenyan shillings, but the dollar invoicing was only adopted as the company had no local banking partner.

“ Any shortfalls arising from exchange rate differences are attributable solely to the claimant’s business decisions and do not give rise to liability on the respondent’s part. As a prudent commercial actor, it ought to have mitigated foreseeable risks, including those related to currency inflation within the three-year contractual period,” replied IEBC.

Separately, the board dismissed a case filed by one Mohamed Ali, over a ballot paper printing tender. Ali was aggrieved by the commission’s requirement for experience. It wanted the board to order the IEBC to vary the requirement to include the capacity to print security papers.

The board also threw out another claim of political interference. Ali had alleged that a person said to be National Assembly Speaker Moses Wetang’ula’s  Chief of Staff, Stephen Apopo, had allegedly travelled to Greece to meet Inform Lykos (Hellas) SA officials in a bid to influence the procurement process in its favour.

The board noted that although Ali’s claims were grave, he never provided evidence to back them.