The Application that forms the subject of this judgment is the one dated 26th June 2025 wherein the Applicant seeks the following orders;
1) …
2) That pending the hearing and determination of the present Originating Motion, the Honourable Court be pleased to Order stay of proceedings in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), and particularly stay of finalization of the tender process, including entering into contracts with the bidders pre-qualified in the Notifications dated April 24, 2025;
3) That upon prosecution of the substantive Originating Motion, this Honourable Court be pleased to set aside the entire decision of the Public Procurement Administrative Review Board (PPARB), the 1st Respondent herein, delivered in PPARB Request for Review Application No. 54 of 2025: TUV AUSTRIA TURK vs, Accounting Officer, Kenya Bureau of Standards & 2 Others, on June 16, 2025, on the grounds of illegality and irrationality;
4) That this Honourable Court be pleased to SET ASIDE the entire decision of the Accounting Officer, Kenya Bureau of Standards (KEBS), the 2nd Respondent herein, in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), and delivered vide Notification of Award letters dated April 24, 2025;
5) That this Honourable Court be pleased to PROHIBIT the Accounting Officer, Kenya Bureau of Standards (KEBS), the 2nd Respondent herein, from progressing and finalizing the proceedings in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER);
6) That this Honourable Court be pleased to DIRECT the Accounting Officer, Kenya Bureau of Standards (KEBS), the 2nd Respondent herein, to terminate the tender process in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), and commence a fresh tender process;
7) That in the alternative to Order No. 4, 5, and 6 above, the Honourable Court be pleased to remit the matter back to the Public Procurement Administrative Review Board (PPARB), the 1st Respondent herein, with directions to the Board to hear and determine the implication of the finding on the record that the Notification of Award letters were executed by the Accounting Officer, Kenya Bureau of Standards, 1stRespondent herein, without the benefit of considering the Professional Opinion, in contravention of Section 84 of the Public Procurement and Asset Disposal Act, 2015;
8) That in addition to Order No. 3 above, this Honourable Court be pleased to declare that the finding of the Public Procurement Administrative Review Board (PPARB), 1stRespondent herein, in respect to the Exparte Applicant’s audited and approved accounts to be unreasonable and irrational for having failed to take into account relevant material and considerations placed before the Review Board in the Request for Review proceedings;
9) That in addition to Order No. 3 and 8 above, this Honourable Court be pleased to remit the matter back to the Accounting Officer, Kenya Bureau of Standards, the 2ndRespondent herein, with directions for the Accounting Officer to progress with evaluation of the Exparte Applicant’s bid submitted in respect of Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), in a manner compliant with Section 79 and 80 of the Public Procurement and Asset Disposal Act, 2015.
10) That costs of the present Originating Motion is awarded to the Exparte Applicant.
The Applicants Case;
1. The Exparte Applicant seeks to challenge the decision of the Public Procurement Administrative Review Board (PPARB) delivered in Request for Review Application No. 54 of 2025: TUV Austria Turk vs. The Accounting Officer, Kenya Bureau of Standards.
2. It is its case that the essence of the present proceedings is the evaluation in respect of TENDER NO.: KEBS/PRE-Q/T006/2025/2028- PRE- QUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES, THE YEAR 2025- 2028 (the subject international tender/ pre- qualification).
3. The Exparte Applicant herein participated, as a bidder, in the procurement proceedings.
4. The Exparte Applicant herein received a notification of regret entitled ‘Notification of Intent to Prequalify under TENDER NO.: KEBS/PRE-Q/T006/2025/2028- PRE- QUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES, THE YEAR 2025- 2028.
5. The letter was dated April 24, 2025, and it conveyed the assessment by the Procuring Entity that the Applicant’s bid was not successful, the reasons relied upon by the Procuring Entity in disqualifying the Applicant, and similarly the successful bidders for the different zones under consideration.
6. The Applicant was disqualified on account of the following reasons:
a) (The Applicant) Did not provide a full set of audited accounts for the last five years (from 2019);
b) It was noted that the auditor’s opinion puts a caveat on the financial statements provided that it doesn’t reflect the fair view of the financial position of the bidder.
7. This precipitated the filling of the request for review application on May 7th, 2025, being Application No. 54 of 2025.
8. The Public Procurement Administrative Review Board (PPARB), the 1st Respondent herein, delivered its decision in the subject request for review application on June 16, 2025- 2100H.
9. It is its case that the decision of the Review Board reveals a flaw in the tender process, which the Review Board failed to either acknowledge or address, and which the Applicant holds the view goes to the heart of the procurement process.
10. According to it the error in the procurement process is reflected in the decision of the Review Board, under paragraphs 10 and 11.
11. The Accounting Officer of the Review Board, executed the Notification of Awards and Regret on April 24, 2025.
12. The Professional Opinion required under Section 84 of the PPAD Act was issued on April 25, 2025.
13. The Accounting Officer exercised her mandate on April 24, 2025, without the benefit of the Professional Opinion required under Section 84.
14. Furthermore, the Professional Opinion was issued after the fact, to regularize and comply with the provisions of the Law (on April 25, 2025).
15. According to the Applicant the manner of exercising her mandate under the PPAD Act, where the Accounting Officer progressed to make her decision without considering the professional opinion is a fatal misstep, as the same contravenes Article 227 of the Constitution of Kenya, 2010, and deprives the process of attributes of fairness, competitiveness, and transparency.
16. It is its case that despite reflecting this position in its decision, it is clear that the Review Board did not address its mind to the same, and simply disregarded or omitted the same entirely and in the result the decision of the Review Board was materially influenced by an error in Law.
17. It is argued that the improper exercise of mandate by the Accounting Officer vitiates the procurement process, more so where the mandate is exercised in a manner which omits, disregards, or avoids safeguards codified in law.
18. Furthermore, the regularization of statutory prescripts, post exercise of mandate, is similarly insufficient to resuscitate the procurement process, as it nonetheless defeats the purpose of the Law in requiring the consideration of the safeguards, pre/ prior to exercise of mandate.
19. The Board is similarly impugned for failure to consider relevant material placed before them to inform their decision on the issues for determination.
20. It is its case that the substance of the dispute before the Review Board was entirely on the presentation and interpretation of Special Purpose Financial Accounts, as well as the interpretation of accompanying auditors’ opinion to the special purpose financial accounts.
21. The Applicant availed technical guidance in the form of ISA 800- Audits of Financial Statements prepared in accordance with Special Purpose Framework.
22. This is a professional standard prepared by the International Auditing and Assurance Standards Board.
23. According to the applicant this is an authoritative guide on a technical subject, being the audit and outcome of audits of special purpose frameworks, the Applicant reasonably expected that the Review Board would consider the same in its decision in the matter.
24. This is more so the case as the Applicant had taken the effort to avail the professional standard (ISA 800), in its entirety, in its Further Written Submissions.
25. In arriving at its decision, the Review Board omitted or disregarded relevant material placed before them, and importantly on a technical subject such as interpretation or perception of audited financial statements.
26. It argues that by failing to consider relevant material placed before them on a technical subject, the Review Board arrived at an erroneous or conflicting finding on the issues for determination.
27. It is its case that the Review Board erred on what comprises a full set of audited financial statements.
28. Under the technical guidance, at paragraph 7, the standard defines a complete set of special purpose financial statements to entail the requirements as stipulated under the Review Board, financial reporting framework- which stipulates presentation, structure, and contents of the financial statements.
29. It argues that upon disregarding relevant material placed before the Review Board on a technical subject, under paragraphs 114 to 116 of its decision, the Review Board took the position that a full set of financial statements includes a balance sheet, income statement, statement of cash flows, statement of changes in equity, and Notes to the Account.
30. The Applicant asserts that this is not always the case, as directed in the technical guidance of ISA 800.
31. It also argues that in requiring presentation of the financial statements strictly in the manner of the five (5) components, the Review Board imposes upon the Applicant an additional requirement of presenting financial statements in accordance with the International Financial Reporting Standards (IFRS), which is a requirement not expressly stated in the tender documents.
32. In any event the mandatory requirement number 9 did not stipulate a specific financial framework that bidders must comply with. As such, being an international tender and tenderers bound by different financial frameworks globally, it is unlawful and unreasonable to imply a specific financial framework, more so at the point of evaluation of tenderer’s bids.
33. This is particularly pronounced where in past tenders, the procuring entity readily accepted financial statements prepared in a different financial framework to IFRS.
34. Secondly, the Review Board entered a finding that the special purpose financial accounts, was solely meant to facilitate preparation of Group consolidated financial statements and therefore may not be suitable for any other purpose. This is contrary to the technical guidance availed under ISA 800, which advances the following:
a) Under Paragraph 14 of the standard, the disclaimer or emphasis of matter is only advanced as a precautionary measure;
b) Under Explanatory Note A4, the technical guidance acknowledges that for some entities Special Purpose Financial Statements are the only statements prepared. In these circumstances, the financial statements can be used by users other than those for whom the financial reporting framework is designed. This describes the situation of the Applicant where the Special Purpose Financial Statements are the only financial statements prepared by the Applicant- as the Applicant is a wholly owned subsidiary of the Parent Company;
c) Under Explanatory Note A20, the technical guidance acknowledges that The Special purpose financial statements may be used for purposes other than those were intended. For example, a regulator may require certain entities to place the special purpose financial statements on public record. To avoid misunderstandings, the auditor alerts users of the auditor's report by including an Emphasis of Matter paragraph explaining that the financial statements are prepared in accordance with a special purpose framework and, therefore, may not be suitable for another purpose. ISA 706 (Revised) requires this paragraph to be included within a separate section of the auditor's report with an appropriate heading that includes the term- Emphasis of Matter. Once again, the Emphasis of matter (disclaimer) is placed as a pre-cautionary measure, which informs professionals suitably.
35. In omitting the technical guidance in ISA 800, the Review Board arrived at an erroneous finding which contradicts the authoritative position on the subject.
36. The Exparte Applicant maintains that the erroneous exercise of the Board’s mandate is significantly prejudicial as it sanitizes a procurement process that is fatally defective, and furthermore, unfairly and unlawfully locks the Applicant out the subject tender process.
The Applicant’s Submissions:
37. It identifies the issues for determination starting with the issue whether the decision of the Public Procurement Administrative Review Board (PPARB), the 1stRespondent herein, was materially influenced by an error in law, where the Board failed to acknowledge that an error flouting Section 84 of the Public Procurement and Asset Disposal Act?
38. It challenges the decision of the 1st Respondent herein, for identifying an irregularity within the procurement process, but failing to acknowledge the materiality of the irregularity in its decision.
39. It submits that upon scrutinizing the confidential documents supplied by the 2nd and 3rd Respondents, the Board notes as follows at paragraphs 10 and 11 of its decision:
“10.In a Professional Opinion dated 25th April 2025 (hereinafter referred to as ‘the Professional Opinion’), the Head of Procurement of the Procuring Entity, Ms. Jane Ndinya, reviewed the procurement process, including the evaluation of tenders, and concurred with the Evaluation Committee’s recommendation to pre-qualify the ten tenderers, subject to the conduct of due diligence. The Professional Opinion was subsequently approved.
11.The tenderers were notified of the outcome of the evaluation for the subject tender through letters dated 24th April 2025.”
40. The record of the Review Board establishes three facts:
a) First, the Accounting Officer of the Procuring Entity, the 2nd Respondent herein, exercised her mandate by preparing and executing the notification of awards (under Section 87 of the Public Procurement and Asset Disposal Act) on April 24, 2025;
b) Secondly, the Professional Opinion by the Head of Procurement Function was issued (or dated) on April 25, 2025. The Professional Opinion was issued after the Accounting Officer had exercised her authority by proceeding to prepare and execute the notification of award;
c) Thirdly, the approval of the professional opinion was done after the fact, either or on after April 25, 2025. The approval of professional opinion was effected to regularize the position, after the Accounting officer had already exercised her mandate. However, it is apparently clear that at the point of exercising her mandate the Accounting Officer did not have the benefit of the professional opinion.
41. It submits that The Procuring Entity attempts to vary the facts as depicted by the Review Board. The Procuring Entity belatedly, wishes to assert that in fact the professional opinion is dated April 24, 2025, and is just approved and executed on April 25, 2025.
42. It submits that this is a contradiction to the position as established by the Review Board after scrutinizing the confidential documents.
43. The Review Board is express, the professional opinion is dated April 25, 2025. Further, the professional opinion was subsequently approved, to mean either on or after April 25, 2025.
44. Section 84 of the Public Procurement and Asset Disposal Act, 2015 provides as follows:
“(1) The head of procurement function of a procuring entity shall, alongside the report to the evaluation committee as secretariat comments, review the tender evaluation report and provide a signed professional opinion to the accounting officer on the procurement or asset disposal proceedings.
(2) The professional opinion under subsection (1) may provide guidance on the procurement proceeding in the event of dissenting opinions between tender evaluation and award recommendations.
(3) In making a decision to award a tender, the accounting officer shall take into account the views of the head of procurement in the signed professional opinion referred to in subsection (1)”’
45. Accordingly, it is submitted that, it is mandatory for the Accounting Officer of a procuring entity to consider the professional opinion of the head of procurement function, prior in exercising the decision to award a tender.
46. Reliance is placed in Kenya Ports Authority vs. Public Procurement Administrative Review Board; Mantrad Enterprises Limited (Interested Party) [2018] KEHC 406 KLR which held as follows in paragraph20 of its decision:
“Section 84 (1) imposes a mandatory obligation on the Head of Procurement to deliver a professional opinion on each and every procurement. That professional opinion must go together with the tender committee evaluation report. So once this mandatory professional opinion has been issued, what does the law require next? The answer is in Section 84 (3) of PPDA 2015. That section makes it mandatory for the Accounting Officer to consider the views in the signed professional opinion. We agree with the Review Board that the opinion is not binding on the Accounting Officer but he must consider that professional opinion. This position was restated in Republic vs. Public Procurement Administrative Review Board & 2 Others ex parte International Research and Development Actions Ltd (2017) eKLR, where the Court said:
It is therefore clear that the accounting officer is duty bound to consider the said opinion. He however is at liberty not to follow it after considering the same. He however cannot just disregard it on the ground that there were no dissenting opinions.” [Emphasis added]
47. The Applicant submits that accounting Officer must consider the professional opinion, prior to exercising her mandate to prepare and execute the award letters. These safeguards are placed in law, so that improper influence might not be exercised, and the constitutional attributes of a fair, equitable, transparent, competitive, and cost-effective procurement process are upheld.
48. They submit that the justification afforded on behalf of the 2nd and 3rdRespondents, which seeks to contradict the formal record of the Review Board, is not sufficient.
49. It further submits that where the Accounting Officer exercises her mandate, to prepare and execute the awards, it is not clear whether the professional opinion was prepared to align with the improper or premature action of the accounting officer, and in a scheme to regularize an unlawful and unprocedural procurement process.
50. It submits that it is apparent that the PPARB, the 1stRespondent herein, misdirected themselves in law in failing to address this apparent error in due process, and in which they had properly identified in the confidential documents.As such, in misdirecting themselves in law, the decision of the PPARB is tainted with illegality.
51. Further, as the actions of the accounting officer disregard an express provision of law, they urge the Court to find that the same is similarly tainted with illegality and the decision of the 1stRespondent herein should be set aside.
52. The second issue that the applicant submits on is whether the decision of the Public Procurement Administrative Review Board (PPARB), herein, failed to take into account relevant considerations in arriving at its decision.
53. The Applicant submits that it had advanced a guide on a professional/ technical subject. However, the 1st Respondent failed to consider the same and relied on layman definitions, which are inaccurate and contrary to the guide the professional/ technical subject.
54. The Request for Review Application before the PPARB revolved around the interpretation of financial statements, and whether the set of financial statements supplied by the Applicant satisfied mandatory requirement number 9 of the tender documents. In particular, the Applicant prepares Special Purpose Financial Accounts on account of the fact that it is a wholly owned subsidiary of the Parent Company.
55. The Applicant availed technical guidance in the form of an Auditing standard- ISA 800- Audits of Financial Statements prepared in accordance with Special Purpose Framework. This is a professional standard prepared by the International Auditing and Assurance Standards Board.
56. It submits that this Auditing standard affords the necessary definitions, interpretation, purpose, and use of financial statements prepared in accordance with a Special Purpose framework.
57. The Standard defines what as Special Purpose Financial Statement is at Para 6. These are financial statements prepared in accordance with a special purpose framework. Further, a special purpose framework is defined a financial reporting framework designed to meet the financial information needs of specific users. The financial reporting framework may be a fair representation framework or a compliance framework. As such special purpose framework has no implication that it is incomplete.
58. It submits that Paragrapgh 7 determines what a complete set of special purpose financial statements entails. The requirements of the applicable financial reporting framework determine the presentation, structure, and content of the financial statements, and what constitutes a complete set of financial statements. In the present circumstances, applicable financial reporting framework- is Group Accounting policies.
59. Under paragraph 14 of the standard, the Auditor is required to include an emphasis of matter paragraph alerting users of the auditor's report that the financial statements are prepared in accordance with special purpose framework and that, as a result, the financial statements may not be suitable for another purpose. This is ordinarily a precautionary emphasis of matter.
60. It further submits that under Application and other Explanatory Material the Standard bears examples of what might constitute Special purpose financial statements. (A1, A2). This goes to show it is not predominantly a strange or outlandish request. It also does not mean that it is not a complete set. Locally, banks submit a special report to CBK. These are special purpose financial statements.
61. It further submits that Explanatory Note A4 of the Standard is key. It acknowledges that for some entities Special Purpose Financial Statements are the only statements prepared. In these circumstances, the financial statements can be used by users other than those for whom the financial reporting framework is designed. States: Financial Statements prepared in accordance with a Special Purpose Framework may be the only financial statements an entity prepares. In such circumstances, those financial statements may be used by users other than those for whom the financial reporting framework is designed. Despite the broad distribution of the financial statements in those circumstances, the financial statements are still considered to be special purpose financial statements for purposes of the ISAs. The requirements in paragraphs 13-14 are designed to avoid misunderstandings about the purpose for which the financial statements are prepared. The disclaimers are usually a precautionary mechanism, just to alert third- party users. But it does not mean that third- party users cannot receive (or use) the Special Purpose Financial Statements.
62. Explanatory Note A20 is key. The Special purpose financial statements may be used for purposes other than those were intended. For example, a regulator may require certain entities to place the special purpose financial statements on public record. To avoid misunderstandings, the auditor alerts users of the auditor's report by including an Emphasis of Matter paragraph explaining that the financial statements are prepared in accordance with a special purpose framework and, therefore, may not be suitable for another purpose. ISA 706 (Revised) requires this paragraph to be included within a separate section of the auditor's report with an appropriate heading that includes the term- Emphasis of Matter.
63. ISA 800, under Explanatory Note 21, the Restriction on Distribution or Use Notification is required. Stipulates: In addition to the alert required by paragraph 14, the auditor may consider it appropriate to indicate that the auditor's report is intended solely for the specific users. Depending on the law or regulation of the particular jurisdiction, this may be achieved by restricting the distribution or use of the auditor's report. In these circumstances, the paragraph referred to in paragraph 14 may be expanded to include these other matters, and the heading modified accordingly.
64. ISA 800 is the most authoritative standard in respect of special purpose framework audits, and interpretation of the same. However, despite having benefit of the guide on a technical subject, in arriving at its decision the Review Board omitted or disregarded relevant material placed before them, and importantly on a technical subject such as interpretation or perception of audited financial statements.
65. It submits that the Review Board erred on what comprises a full set of audited financial statements. Under the technical guidance, at paragraph 7, the standard defines a complete set of special purpose financial statements to entail the requirements as stipulated under the applicable financial reporting framework- which stipulates presentation, structure, and contents of the financial statements. In the present circumstances, as represented in the audited accounts, the applicable financial reporting framework for the Applicant is the Group Accounting Policies.
66. It submits that upon disregarding relevant material placed before the Review Board on a technical subject, under paragraphs 114 to 116 of its decision, the Review Board took the position that a full set of financial statements includes a balance sheet, income statement, statement of cash flows, statement of changes in equity, and Notes to the Account.
67. The Applicant asserts that this is not always the case, as directed in the technical guidance of ISA 800. Secondly, it submits that the Review Board entered a finding that the special purpose financial accounts, was solely meant to facilitate preparation of Group consolidated financial statements and therefore may not be suitable for any other purpose.
68. It is submitted that this position goes contrary to the technical guidance availed under ISA 800, which advances the following:
a) Under Paragraph 14 of the standard, the disclaimer or emphasis of matter is only advanced as a precautionary measure;
b) Under Explanatory Note A4, the technical guidance acknowledges that for some entities Special Purpose Financial Statements are the only statements prepared. In these circumstances, the financial statements can be used by users other than those for whom the financial reporting framework is designed. This describes the situation of the Applicant where the Special Purpose Financial Statements are the only financial statements prepared by the Applicant- as the Applicant is a wholly owned subsidiary of the Parent Company;
c) Under Explanatory Note A20, the technical guidance acknowledges that The Special purpose financial statements may be used for purposes other than those were intended. For example, a regulator may require certain entities to place the special purpose financial statements on public record. To avoid misunderstandings, the auditor alerts users of the auditor's report by including an Emphasis of Matter paragraph explaining that the financial statements are prepared in accordance with a special purpose framework and, therefore, may not be suitable for another purpose. ISA 706 (Revised) requires this paragraph to be included within a separate section of the auditor's report with an appropriate heading that includes the term- Emphasis of Matter. Once again, the Emphasis of matter (disclaimer) is placed as a pre-cautionary measure, which informs professionals suitably.
69. In omitting the technical guidance in ISA 800, the Review Board arrived at an erroneous finding which contradicts the authoritative position on the subject.
70. Accordingly, it submits that the appropriate lens in considering the subject, is only the lens which appreciates the technical matter, and not an interpretation of an unqualified person (a layman’s lens).
71. It submits that it is akin to a layman challenging the necessity of a pillar in architectural drawings, without seeking clarification from the professional who saw it fit to place the same.
72. The layman is not qualified to fully interpret the architectural drawings, and as such without appropriate consultations, should not be allowed to interpret and alter the drawings. Allowing him or her to do so would have a catastrophic out
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1) …
2) That pending the hearing and determination of the present Originating Motion, the Honourable Court be pleased to Order stay of proceedings in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), and particularly stay of finalization of the tender process, including entering into contracts with the bidders pre-qualified in the Notifications dated April 24, 2025;
3) That upon prosecution of the substantive Originating Motion, this Honourable Court be pleased to set aside the entire decision of the Public Procurement Administrative Review Board (PPARB), the 1st Respondent herein, delivered in PPARB Request for Review Application No. 54 of 2025: TUV AUSTRIA TURK vs, Accounting Officer, Kenya Bureau of Standards & 2 Others, on June 16, 2025, on the grounds of illegality and irrationality;
4) That this Honourable Court be pleased to SET ASIDE the entire decision of the Accounting Officer, Kenya Bureau of Standards (KEBS), the 2nd Respondent herein, in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), and delivered vide Notification of Award letters dated April 24, 2025;
5) That this Honourable Court be pleased to PROHIBIT the Accounting Officer, Kenya Bureau of Standards (KEBS), the 2nd Respondent herein, from progressing and finalizing the proceedings in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER);
6) That this Honourable Court be pleased to DIRECT the Accounting Officer, Kenya Bureau of Standards (KEBS), the 2nd Respondent herein, to terminate the tender process in relation to Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), and commence a fresh tender process;
7) That in the alternative to Order No. 4, 5, and 6 above, the Honourable Court be pleased to remit the matter back to the Public Procurement Administrative Review Board (PPARB), the 1st Respondent herein, with directions to the Board to hear and determine the implication of the finding on the record that the Notification of Award letters were executed by the Accounting Officer, Kenya Bureau of Standards, 1stRespondent herein, without the benefit of considering the Professional Opinion, in contravention of Section 84 of the Public Procurement and Asset Disposal Act, 2015;
8) That in addition to Order No. 3 above, this Honourable Court be pleased to declare that the finding of the Public Procurement Administrative Review Board (PPARB), 1stRespondent herein, in respect to the Exparte Applicant’s audited and approved accounts to be unreasonable and irrational for having failed to take into account relevant material and considerations placed before the Review Board in the Request for Review proceedings;
9) That in addition to Order No. 3 and 8 above, this Honourable Court be pleased to remit the matter back to the Accounting Officer, Kenya Bureau of Standards, the 2ndRespondent herein, with directions for the Accounting Officer to progress with evaluation of the Exparte Applicant’s bid submitted in respect of Tender No.: KEBS/PRE-Q/T006/2025/2028- PREQUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES THE YEAR 2025- 2028 (INTERNATIONAL TENDER), in a manner compliant with Section 79 and 80 of the Public Procurement and Asset Disposal Act, 2015.
10) That costs of the present Originating Motion is awarded to the Exparte Applicant.
The Applicants Case;
1. The Exparte Applicant seeks to challenge the decision of the Public Procurement Administrative Review Board (PPARB) delivered in Request for Review Application No. 54 of 2025: TUV Austria Turk vs. The Accounting Officer, Kenya Bureau of Standards.
2. It is its case that the essence of the present proceedings is the evaluation in respect of TENDER NO.: KEBS/PRE-Q/T006/2025/2028- PRE- QUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES, THE YEAR 2025- 2028 (the subject international tender/ pre- qualification).
3. The Exparte Applicant herein participated, as a bidder, in the procurement proceedings.
4. The Exparte Applicant herein received a notification of regret entitled ‘Notification of Intent to Prequalify under TENDER NO.: KEBS/PRE-Q/T006/2025/2028- PRE- QUALIFICATIONS FOR PROVISION OF PRE- EXPORT VERIFICATION OF CONFORMITY (PVOC) TO STANDARDS SERVICES, THE YEAR 2025- 2028.
5. The letter was dated April 24, 2025, and it conveyed the assessment by the Procuring Entity that the Applicant’s bid was not successful, the reasons relied upon by the Procuring Entity in disqualifying the Applicant, and similarly the successful bidders for the different zones under consideration.
6. The Applicant was disqualified on account of the following reasons:
a) (The Applicant) Did not provide a full set of audited accounts for the last five years (from 2019);
b) It was noted that the auditor’s opinion puts a caveat on the financial statements provided that it doesn’t reflect the fair view of the financial position of the bidder.
7. This precipitated the filling of the request for review application on May 7th, 2025, being Application No. 54 of 2025.
8. The Public Procurement Administrative Review Board (PPARB), the 1st Respondent herein, delivered its decision in the subject request for review application on June 16, 2025- 2100H.
9. It is its case that the decision of the Review Board reveals a flaw in the tender process, which the Review Board failed to either acknowledge or address, and which the Applicant holds the view goes to the heart of the procurement process.
10. According to it the error in the procurement process is reflected in the decision of the Review Board, under paragraphs 10 and 11.
11. The Accounting Officer of the Review Board, executed the Notification of Awards and Regret on April 24, 2025.
12. The Professional Opinion required under Section 84 of the PPAD Act was issued on April 25, 2025.
13. The Accounting Officer exercised her mandate on April 24, 2025, without the benefit of the Professional Opinion required under Section 84.
14. Furthermore, the Professional Opinion was issued after the fact, to regularize and comply with the provisions of the Law (on April 25, 2025).
15. According to the Applicant the manner of exercising her mandate under the PPAD Act, where the Accounting Officer progressed to make her decision without considering the professional opinion is a fatal misstep, as the same contravenes Article 227 of the Constitution of Kenya, 2010, and deprives the process of attributes of fairness, competitiveness, and transparency.
16. It is its case that despite reflecting this position in its decision, it is clear that the Review Board did not address its mind to the same, and simply disregarded or omitted the same entirely and in the result the decision of the Review Board was materially influenced by an error in Law.
17. It is argued that the improper exercise of mandate by the Accounting Officer vitiates the procurement process, more so where the mandate is exercised in a manner which omits, disregards, or avoids safeguards codified in law.
18. Furthermore, the regularization of statutory prescripts, post exercise of mandate, is similarly insufficient to resuscitate the procurement process, as it nonetheless defeats the purpose of the Law in requiring the consideration of the safeguards, pre/ prior to exercise of mandate.
19. The Board is similarly impugned for failure to consider relevant material placed before them to inform their decision on the issues for determination.
20. It is its case that the substance of the dispute before the Review Board was entirely on the presentation and interpretation of Special Purpose Financial Accounts, as well as the interpretation of accompanying auditors’ opinion to the special purpose financial accounts.
21. The Applicant availed technical guidance in the form of ISA 800- Audits of Financial Statements prepared in accordance with Special Purpose Framework.
22. This is a professional standard prepared by the International Auditing and Assurance Standards Board.
23. According to the applicant this is an authoritative guide on a technical subject, being the audit and outcome of audits of special purpose frameworks, the Applicant reasonably expected that the Review Board would consider the same in its decision in the matter.
24. This is more so the case as the Applicant had taken the effort to avail the professional standard (ISA 800), in its entirety, in its Further Written Submissions.
25. In arriving at its decision, the Review Board omitted or disregarded relevant material placed before them, and importantly on a technical subject such as interpretation or perception of audited financial statements.
26. It argues that by failing to consider relevant material placed before them on a technical subject, the Review Board arrived at an erroneous or conflicting finding on the issues for determination.
27. It is its case that the Review Board erred on what comprises a full set of audited financial statements.
28. Under the technical guidance, at paragraph 7, the standard defines a complete set of special purpose financial statements to entail the requirements as stipulated under the Review Board, financial reporting framework- which stipulates presentation, structure, and contents of the financial statements.
29. It argues that upon disregarding relevant material placed before the Review Board on a technical subject, under paragraphs 114 to 116 of its decision, the Review Board took the position that a full set of financial statements includes a balance sheet, income statement, statement of cash flows, statement of changes in equity, and Notes to the Account.
30. The Applicant asserts that this is not always the case, as directed in the technical guidance of ISA 800.
31. It also argues that in requiring presentation of the financial statements strictly in the manner of the five (5) components, the Review Board imposes upon the Applicant an additional requirement of presenting financial statements in accordance with the International Financial Reporting Standards (IFRS), which is a requirement not expressly stated in the tender documents.
32. In any event the mandatory requirement number 9 did not stipulate a specific financial framework that bidders must comply with. As such, being an international tender and tenderers bound by different financial frameworks globally, it is unlawful and unreasonable to imply a specific financial framework, more so at the point of evaluation of tenderer’s bids.
33. This is particularly pronounced where in past tenders, the procuring entity readily accepted financial statements prepared in a different financial framework to IFRS.
34. Secondly, the Review Board entered a finding that the special purpose financial accounts, was solely meant to facilitate preparation of Group consolidated financial statements and therefore may not be suitable for any other purpose. This is contrary to the technical guidance availed under ISA 800, which advances the following:
a) Under Paragraph 14 of the standard, the disclaimer or emphasis of matter is only advanced as a precautionary measure;
b) Under Explanatory Note A4, the technical guidance acknowledges that for some entities Special Purpose Financial Statements are the only statements prepared. In these circumstances, the financial statements can be used by users other than those for whom the financial reporting framework is designed. This describes the situation of the Applicant where the Special Purpose Financial Statements are the only financial statements prepared by the Applicant- as the Applicant is a wholly owned subsidiary of the Parent Company;
c) Under Explanatory Note A20, the technical guidance acknowledges that The Special purpose financial statements may be used for purposes other than those were intended. For example, a regulator may require certain entities to place the special purpose financial statements on public record. To avoid misunderstandings, the auditor alerts users of the auditor's report by including an Emphasis of Matter paragraph explaining that the financial statements are prepared in accordance with a special purpose framework and, therefore, may not be suitable for another purpose. ISA 706 (Revised) requires this paragraph to be included within a separate section of the auditor's report with an appropriate heading that includes the term- Emphasis of Matter. Once again, the Emphasis of matter (disclaimer) is placed as a pre-cautionary measure, which informs professionals suitably.
35. In omitting the technical guidance in ISA 800, the Review Board arrived at an erroneous finding which contradicts the authoritative position on the subject.
36. The Exparte Applicant maintains that the erroneous exercise of the Board’s mandate is significantly prejudicial as it sanitizes a procurement process that is fatally defective, and furthermore, unfairly and unlawfully locks the Applicant out the subject tender process.
The Applicant’s Submissions:
37. It identifies the issues for determination starting with the issue whether the decision of the Public Procurement Administrative Review Board (PPARB), the 1stRespondent herein, was materially influenced by an error in law, where the Board failed to acknowledge that an error flouting Section 84 of the Public Procurement and Asset Disposal Act?
38. It challenges the decision of the 1st Respondent herein, for identifying an irregularity within the procurement process, but failing to acknowledge the materiality of the irregularity in its decision.
39. It submits that upon scrutinizing the confidential documents supplied by the 2nd and 3rd Respondents, the Board notes as follows at paragraphs 10 and 11 of its decision:
“10.In a Professional Opinion dated 25th April 2025 (hereinafter referred to as ‘the Professional Opinion’), the Head of Procurement of the Procuring Entity, Ms. Jane Ndinya, reviewed the procurement process, including the evaluation of tenders, and concurred with the Evaluation Committee’s recommendation to pre-qualify the ten tenderers, subject to the conduct of due diligence. The Professional Opinion was subsequently approved.
11.The tenderers were notified of the outcome of the evaluation for the subject tender through letters dated 24th April 2025.”
40. The record of the Review Board establishes three facts:
a) First, the Accounting Officer of the Procuring Entity, the 2nd Respondent herein, exercised her mandate by preparing and executing the notification of awards (under Section 87 of the Public Procurement and Asset Disposal Act) on April 24, 2025;
b) Secondly, the Professional Opinion by the Head of Procurement Function was issued (or dated) on April 25, 2025. The Professional Opinion was issued after the Accounting Officer had exercised her authority by proceeding to prepare and execute the notification of award;
c) Thirdly, the approval of the professional opinion was done after the fact, either or on after April 25, 2025. The approval of professional opinion was effected to regularize the position, after the Accounting officer had already exercised her mandate. However, it is apparently clear that at the point of exercising her mandate the Accounting Officer did not have the benefit of the professional opinion.
41. It submits that The Procuring Entity attempts to vary the facts as depicted by the Review Board. The Procuring Entity belatedly, wishes to assert that in fact the professional opinion is dated April 24, 2025, and is just approved and executed on April 25, 2025.
42. It submits that this is a contradiction to the position as established by the Review Board after scrutinizing the confidential documents.
43. The Review Board is express, the professional opinion is dated April 25, 2025. Further, the professional opinion was subsequently approved, to mean either on or after April 25, 2025.
44. Section 84 of the Public Procurement and Asset Disposal Act, 2015 provides as follows:
“(1) The head of procurement function of a procuring entity shall, alongside the report to the evaluation committee as secretariat comments, review the tender evaluation report and provide a signed professional opinion to the accounting officer on the procurement or asset disposal proceedings.
(2) The professional opinion under subsection (1) may provide guidance on the procurement proceeding in the event of dissenting opinions between tender evaluation and award recommendations.
(3) In making a decision to award a tender, the accounting officer shall take into account the views of the head of procurement in the signed professional opinion referred to in subsection (1)”’
45. Accordingly, it is submitted that, it is mandatory for the Accounting Officer of a procuring entity to consider the professional opinion of the head of procurement function, prior in exercising the decision to award a tender.
46. Reliance is placed in Kenya Ports Authority vs. Public Procurement Administrative Review Board; Mantrad Enterprises Limited (Interested Party) [2018] KEHC 406 KLR which held as follows in paragraph20 of its decision:
“Section 84 (1) imposes a mandatory obligation on the Head of Procurement to deliver a professional opinion on each and every procurement. That professional opinion must go together with the tender committee evaluation report. So once this mandatory professional opinion has been issued, what does the law require next? The answer is in Section 84 (3) of PPDA 2015. That section makes it mandatory for the Accounting Officer to consider the views in the signed professional opinion. We agree with the Review Board that the opinion is not binding on the Accounting Officer but he must consider that professional opinion. This position was restated in Republic vs. Public Procurement Administrative Review Board & 2 Others ex parte International Research and Development Actions Ltd (2017) eKLR, where the Court said:
It is therefore clear that the accounting officer is duty bound to consider the said opinion. He however is at liberty not to follow it after considering the same. He however cannot just disregard it on the ground that there were no dissenting opinions.” [Emphasis added]
47. The Applicant submits that accounting Officer must consider the professional opinion, prior to exercising her mandate to prepare and execute the award letters. These safeguards are placed in law, so that improper influence might not be exercised, and the constitutional attributes of a fair, equitable, transparent, competitive, and cost-effective procurement process are upheld.
48. They submit that the justification afforded on behalf of the 2nd and 3rdRespondents, which seeks to contradict the formal record of the Review Board, is not sufficient.
49. It further submits that where the Accounting Officer exercises her mandate, to prepare and execute the awards, it is not clear whether the professional opinion was prepared to align with the improper or premature action of the accounting officer, and in a scheme to regularize an unlawful and unprocedural procurement process.
50. It submits that it is apparent that the PPARB, the 1stRespondent herein, misdirected themselves in law in failing to address this apparent error in due process, and in which they had properly identified in the confidential documents.As such, in misdirecting themselves in law, the decision of the PPARB is tainted with illegality.
51. Further, as the actions of the accounting officer disregard an express provision of law, they urge the Court to find that the same is similarly tainted with illegality and the decision of the 1stRespondent herein should be set aside.
52. The second issue that the applicant submits on is whether the decision of the Public Procurement Administrative Review Board (PPARB), herein, failed to take into account relevant considerations in arriving at its decision.
53. The Applicant submits that it had advanced a guide on a professional/ technical subject. However, the 1st Respondent failed to consider the same and relied on layman definitions, which are inaccurate and contrary to the guide the professional/ technical subject.
54. The Request for Review Application before the PPARB revolved around the interpretation of financial statements, and whether the set of financial statements supplied by the Applicant satisfied mandatory requirement number 9 of the tender documents. In particular, the Applicant prepares Special Purpose Financial Accounts on account of the fact that it is a wholly owned subsidiary of the Parent Company.
55. The Applicant availed technical guidance in the form of an Auditing standard- ISA 800- Audits of Financial Statements prepared in accordance with Special Purpose Framework. This is a professional standard prepared by the International Auditing and Assurance Standards Board.
56. It submits that this Auditing standard affords the necessary definitions, interpretation, purpose, and use of financial statements prepared in accordance with a Special Purpose framework.
57. The Standard defines what as Special Purpose Financial Statement is at Para 6. These are financial statements prepared in accordance with a special purpose framework. Further, a special purpose framework is defined a financial reporting framework designed to meet the financial information needs of specific users. The financial reporting framework may be a fair representation framework or a compliance framework. As such special purpose framework has no implication that it is incomplete.
58. It submits that Paragrapgh 7 determines what a complete set of special purpose financial statements entails. The requirements of the applicable financial reporting framework determine the presentation, structure, and content of the financial statements, and what constitutes a complete set of financial statements. In the present circumstances, applicable financial reporting framework- is Group Accounting policies.
59. Under paragraph 14 of the standard, the Auditor is required to include an emphasis of matter paragraph alerting users of the auditor's report that the financial statements are prepared in accordance with special purpose framework and that, as a result, the financial statements may not be suitable for another purpose. This is ordinarily a precautionary emphasis of matter.
60. It further submits that under Application and other Explanatory Material the Standard bears examples of what might constitute Special purpose financial statements. (A1, A2). This goes to show it is not predominantly a strange or outlandish request. It also does not mean that it is not a complete set. Locally, banks submit a special report to CBK. These are special purpose financial statements.
61. It further submits that Explanatory Note A4 of the Standard is key. It acknowledges that for some entities Special Purpose Financial Statements are the only statements prepared. In these circumstances, the financial statements can be used by users other than those for whom the financial reporting framework is designed. States: Financial Statements prepared in accordance with a Special Purpose Framework may be the only financial statements an entity prepares. In such circumstances, those financial statements may be used by users other than those for whom the financial reporting framework is designed. Despite the broad distribution of the financial statements in those circumstances, the financial statements are still considered to be special purpose financial statements for purposes of the ISAs. The requirements in paragraphs 13-14 are designed to avoid misunderstandings about the purpose for which the financial statements are prepared. The disclaimers are usually a precautionary mechanism, just to alert third- party users. But it does not mean that third- party users cannot receive (or use) the Special Purpose Financial Statements.
62. Explanatory Note A20 is key. The Special purpose financial statements may be used for purposes other than those were intended. For example, a regulator may require certain entities to place the special purpose financial statements on public record. To avoid misunderstandings, the auditor alerts users of the auditor's report by including an Emphasis of Matter paragraph explaining that the financial statements are prepared in accordance with a special purpose framework and, therefore, may not be suitable for another purpose. ISA 706 (Revised) requires this paragraph to be included within a separate section of the auditor's report with an appropriate heading that includes the term- Emphasis of Matter.
63. ISA 800, under Explanatory Note 21, the Restriction on Distribution or Use Notification is required. Stipulates: In addition to the alert required by paragraph 14, the auditor may consider it appropriate to indicate that the auditor's report is intended solely for the specific users. Depending on the law or regulation of the particular jurisdiction, this may be achieved by restricting the distribution or use of the auditor's report. In these circumstances, the paragraph referred to in paragraph 14 may be expanded to include these other matters, and the heading modified accordingly.
64. ISA 800 is the most authoritative standard in respect of special purpose framework audits, and interpretation of the same. However, despite having benefit of the guide on a technical subject, in arriving at its decision the Review Board omitted or disregarded relevant material placed before them, and importantly on a technical subject such as interpretation or perception of audited financial statements.
65. It submits that the Review Board erred on what comprises a full set of audited financial statements. Under the technical guidance, at paragraph 7, the standard defines a complete set of special purpose financial statements to entail the requirements as stipulated under the applicable financial reporting framework- which stipulates presentation, structure, and contents of the financial statements. In the present circumstances, as represented in the audited accounts, the applicable financial reporting framework for the Applicant is the Group Accounting Policies.
66. It submits that upon disregarding relevant material placed before the Review Board on a technical subject, under paragraphs 114 to 116 of its decision, the Review Board took the position that a full set of financial statements includes a balance sheet, income statement, statement of cash flows, statement of changes in equity, and Notes to the Account.
67. The Applicant asserts that this is not always the case, as directed in the technical guidance of ISA 800. Secondly, it submits that the Review Board entered a finding that the special purpose financial accounts, was solely meant to facilitate preparation of Group consolidated financial statements and therefore may not be suitable for any other purpose.
68. It is submitted that this position goes contrary to the technical guidance availed under ISA 800, which advances the following:
a) Under Paragraph 14 of the standard, the disclaimer or emphasis of matter is only advanced as a precautionary measure;
b) Under Explanatory Note A4, the technical guidance acknowledges that for some entities Special Purpose Financial Statements are the only statements prepared. In these circumstances, the financial statements can be used by users other than those for whom the financial reporting framework is designed. This describes the situation of the Applicant where the Special Purpose Financial Statements are the only financial statements prepared by the Applicant- as the Applicant is a wholly owned subsidiary of the Parent Company;
c) Under Explanatory Note A20, the technical guidance acknowledges that The Special purpose financial statements may be used for purposes other than those were intended. For example, a regulator may require certain entities to place the special purpose financial statements on public record. To avoid misunderstandings, the auditor alerts users of the auditor's report by including an Emphasis of Matter paragraph explaining that the financial statements are prepared in accordance with a special purpose framework and, therefore, may not be suitable for another purpose. ISA 706 (Revised) requires this paragraph to be included within a separate section of the auditor's report with an appropriate heading that includes the term- Emphasis of Matter. Once again, the Emphasis of matter (disclaimer) is placed as a pre-cautionary measure, which informs professionals suitably.
69. In omitting the technical guidance in ISA 800, the Review Board arrived at an erroneous finding which contradicts the authoritative position on the subject.
70. Accordingly, it submits that the appropriate lens in considering the subject, is only the lens which appreciates the technical matter, and not an interpretation of an unqualified person (a layman’s lens).
71. It submits that it is akin to a layman challenging the necessity of a pillar in architectural drawings, without seeking clarification from the professional who saw it fit to place the same.
72. The layman is not qualified to fully interpret the architectural drawings, and as such without appropriate consultations, should not be allowed to interpret and alter the drawings. Allowing him or her to do so would have a catastrophic out
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