What happened

A Kenyan watchdog has publicly faulted the Central Bank of Kenya (CBK) for inserting a secret requirement into a tender valued at Sh1 billion. The criticism was lodged in a recent report that highlighted the lack of openness surrounding the clause, which was not disclosed to prospective bidders during the procurement process. The watchdog’s findings suggest that the undisclosed condition could have tilted the competition in favour of a preferred supplier, undermining the principles of fair competition enshrined in public procurement law. While the report does not name the specific contractor, it stresses that the secret requirement contravenes the Public Procurement and Asset Disposal Act, which mandates full disclosure of all tender criteria.

Context and background

The Central Bank of Kenya, as the nation’s monetary authority, regularly undertakes large‑scale procurements ranging from IT infrastructure to security services. In this instance, the Sh1 billion tender was announced earlier this year, inviting bids from qualified firms across the country. The procurement process is normally overseen by the Public Procurement Oversight Authority (PPOA) and subject to scrutiny by the Ethics and Anti‑Corruption Commission (EACC). However, the watchdog’s report indicates that a clause—described only as “secret”—was embedded in the tender documents after the initial invitation to bid, and was not communicated to all participants.

The watchdog, identified in the Business Daily article as an independent oversight body, has a mandate to ensure that public entities adhere to transparency, value for money and non‑discrimination principles. Its intervention follows a series of high‑profile procurement controversies in Kenya, including the recent Sh2.5 billion procurement for a national e‑government platform that was halted over alleged irregularities. Those episodes have heightened public sensitivity to any hint of opaque practices, especially when large sums of public money are at stake.

Historically, the CBK has been praised for its robust risk‑management frameworks, but critics argue that the bank’s procurement unit has sometimes operated with limited external oversight. The secret requirement in the Sh1 billion tender appears to be an outlier rather than a systemic practice, yet it has reignited calls for stricter monitoring of all central bank contracts. The watchdog’s findings are expected to be forwarded to the PPOA for possible corrective action, and may trigger a review of the tender’s award decision.

Compared with what is normal

Kenyan public procurement norms require that all evaluation criteria be clearly disclosed in the tender notice and accompanying documents. Typical tenders of similar size—ranging from Sh500 million to Sh2 billion—include detailed specifications, scoring matrices, and mandatory compliance checklists that are accessible to any interested party. The inclusion of a secret clause deviates from this standard practice in several ways:

• Transparency: Standard tenders publish all requirements up front; secret clauses are virtually unheard of in compliant procurements.
• Bidder participation: Normally, any qualified SME can submit a bid if they meet the publicly stated criteria. A hidden requirement narrows the pool to those already privy to the information.
• Legal compliance: The Public Procurement and Asset Disposal Act explicitly forbids undisclosed conditions that could affect the award outcome.

In contrast, the CBK’s Sh1 billion tender introduced a condition that was not part of the original public documentation, breaching the usual expectation of full disclosure. Most Kenyan tenders of this magnitude are advertised on the Integrated Public Procurement Information System (IPPIS) and undergo a two‑stage evaluation that is open to audit. The secret requirement therefore stands out as an anomaly that could set a worrying precedent if left unchecked.

Why it matters

For Kenyan SMEs and larger firms alike, the integrity of public procurement processes directly influences their ability to win contracts and grow. When a secret clause is inserted, it erodes confidence that the playing field is level, potentially discouraging qualified businesses from participating in future bids. This can lead to reduced competition, higher costs for the state, and a perception that public funds are being allocated through favouritism rather than merit.

The immediate financial impact of the Sh1 billion tender is significant. If the secret requirement favoured a particular supplier, other bidders may have incurred costs preparing proposals that were ultimately non‑compliant, wasting resources that could have been allocated elsewhere. Moreover, the lack of transparency can attract legal challenges, delaying project implementation and inflating administrative expenses. For the broader economy, such practices undermine the credibility of Kenya’s procurement ecosystem, which is essential for attracting foreign investment and ensuring that public projects deliver value for taxpayers.

Beyond the monetary aspect, the episode highlights a governance issue. The CBK, as a key institution, is expected to model best practices in procurement. Any deviation invites scrutiny not only from watchdogs but also from parliamentarians, civil society groups and the media. Restoring trust will require clear corrective measures, including a review of the tender, possible re‑tendering, and stronger oversight mechanisms to prevent recurrence.

Practical steps

• Monitor official tender portals such as IPPIS and the CBK’s procurement website for updates on the Sh1 billion tender and any announced revisions.
• If you have already submitted a bid, review the tender documents for any clauses that were not disclosed initially and seek clarification in writing from the CBK’s procurement unit.
• Consider engaging a procurement lawyer or consultant to assess whether the secret requirement breaches the Public Procurement and Asset Disposal Act and to explore the possibility of filing a formal objection.
• Stay informed about the watchdog’s findings by following reputable Kenyan business news outlets like Business Daily, which will report on any subsequent investigations or corrective actions.
• For SMEs, diversify your bidding strategy by targeting multiple tenders and maintaining a robust compliance checklist to quickly identify any irregularities in future procurement notices.

Our Financial Management & Analysis service can help businesses assess the financial implications of procurement irregularities, design robust compliance frameworks, and navigate any legal challenges that arise from contested tenders.

Need help with compliance? Email info@beavorenventures.co.ke or call +254 716 296 857.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.