Board annuls duty-free shops tender award to swiss firm

Tourists arrive at the Moi International Airport in Mombasa. The KAA tender team had in November 2013 recommended that the concession contract be awarded to Nuance Group. FILE 

In Summary

• The Public Procurement Oversight Authority (PPOA) said the Kenya Airports Authority (KAA) did not strictly comply with the evaluation rules in awarding the contract for running the shops to Nuance Group AG.
• The KAA tender team had in November 2013 recommended that the concession contract be awarded to Nuance Group after it beat nine other bidders to the job of putting up the shops within terminal four of Jomo Kenyatta International Airport.

The search for a new manager of duty-free shops at the Jomo Kenyatta International Airport is likely to take longer after the public tenders watchdog blocked the award of the contract to a swiss firm citing irregularities.

The Public Procurement Oversight Authority (PPOA) said the Kenya Airports Authority (KAA) did not strictly comply with the evaluation rules in awarding the contract for running the shops previously owned by controversial businessman Kamlesh Pattni to Nuance Group AG.

“The board notes that the criterion imposed by the procuring entity in the evaluation of the tender did not meet the threshold set by the Act (Public Procurement Act) and the Constitution,” the PPOA review board said in an assessment.

The KAA tender team had in November 2013 recommended that the concession contract be awarded to Nuance Group after it beat nine other bidders to the job of putting up the shops within terminal four of Jomo Kenyatta International Airport.

The firms had submitted bids following a tender call by the KAA last October but only Nuance Group made it past the evaluation stage leading to protests from its rivals.

“What this means is either the document was set in such a way that it was not clear to most of the bidders or extrinsic evaluation criteria not provided in the tender document was introduced at evaluation stage,” PPOA said.

An evaluation report seen by Business Daily showed that the nine firms were disqualified mainly due to errors and omissions in the documents submitted.

Nuance AG went for technical evaluation where it scored 91.75 per cent against a pass mark of 70 per cent.

The Swiss firm made a presentation to the KAA management on November 15, 2013 after which the evaluation committee recommended that the company be awarded the concession.

The firm offered a minimum annual guarantee (MAG) of $120,000 (Sh10.3 million) and 12.5 per cent of net sales.

Four of Nuance Group’s rivals — Dufry International, Unifree Duty Free and Suzan General Trading and Flemingo International — petitioned the PPOA for review.

The PPOA found that the KAA tender team failed to adhere to Article 227 of the Constitution which roots for fair competition, transparency and accountability in handling of public contracts.

The board also took issue with the fact that only one bidder made it past the evaluation stage, a situation that normally causes bids to be declared unresponsive.

The PPOA further faulted the KAA team for not using the standard tender document provided by the oversight body.

“This indeed was a missed opportunity by the people of Kenya when a public entity chose to accept a bid with a concession of 12.5 per cent when it was possible to get a higher concession of 33 per cent and above,” the board said.