More firms have locked horns over lucrative State tenders, with formally filed disputes topping Sh107.45 billion in the year to June 2025, signalling stiff competition and rising scrutiny over public procurement.

Disclosures by the Public Procurement Regulatory Authority (PPRA) show the Public Procurement Administrative Review Board--which is a quasi-judicial body that presides over public procurement disputes-- handled 161 cases during the review period.

During the year, 411 procuring entities reported 25,994 contract awards valued Sh217.45 billion. This means the value of disputed contracts was nearly half (49.4 percent).

State corporations had the most awarded tenders at Sh179.65 billion, followed by county governments (Sh22.02 billion), public universities (Sh3.84 billion), State departments (Sh2.11 billion), and county assemblies (Sh1.88 billion).

The number of disputes and the amount of money involved highlight how firms are aggressively contesting procurement outcomes in a bid to secure a share of public spending, which remains one of the largest sources of business for contractors across sectors including construction, health supplies and infrastructure.

“During the period, the review board handled a total dispute value of Sh107.45 billion, reflecting a high level of procurement contestation, meaning that numerous results of procurement proceedings are being challenged due to concerns about fairness, compliance, or transparency,” said PPRA.

The figure points to a procurement landscape where firms bidding for State contracts are willing to challenge outcomes they deem irregular in a challenging economic environment where businesses view government tenders as a stable revenue stream.

Data in the report shows dozens of cases were filed before the review board, with outcomes ranging from annulment of awards to orders for fresh evaluations, signalling frequent disagreements between procuring entities and bidders.

Nearly half of the procurement disputes were upheld, with 80 cases going in favour of the complainants, indicating that many of the complaints presented to the review board were deemed to be valid.

However, 66 cases were dismissed for lacking merit or sufficient evidence, while 15 were withdrawn after parties reached mutual agreements.

PPRA said the majority (108) of the public procurement disputes across various categories of procuring originated from State Corporations and Semi-Autonomous Government Agencies (SAGAs), indicating a significant concentration of procurement issues within this category.

“This distribution highlights a trend where a substantial majority of procurement disputes are concentrated in larger or more complex government institutions, particularly State Corporations and SAGAs, potentially due to the volume and value of procurement activities they undertake,” said PPRA.

The PPRA links the disputes to several factors, including non-compliance with procurement regulations, weak tender documentation and procedural lapses by procuring entities. In some cases, bidders challenged unclear specifications or evaluation criteria, while others cited lack of transparency in the award process.

“The volume of disputes and the value in the matters resolved by the board demonstrates its critical role as a key institution in safeguarding public resources and upholding public confidence in the public procurement system,” said PPRA.

The findings come amid concerns about transparency in public procurement, with the report also flagging inconsistencies in disclosure of contract awards and compliance with reporting requirements by procuring entities.

PPRA data showed that 57 percent, or 14,819 of 25,994 State contracts awarded in the year ending June 2025 lacked disclosure of beneficial ownership, raising concerns about hidden interests in the allocation of lucrative public contracts.

Read: Tycoons in half of tenders keep names, office secret

The findings point to persistent opacity among suppliers doing business with the State, undermining reforms introduced over the past five years to curb corruption, conflicts of interest and illicit financial flows in public procurement.

Firms are increasingly resorting to legal redress to protect commercial interests, even as regulators push for stricter adherence to procurement rules. Firms seeking appeal on the tender processes paid PPRA Sh10.65 million during the review period.

The PPRA report showed procuring entities flouted several rules, including failing to disclose beneficial owners, failure to publish complete contract information, delays in reporting and inaccurate data entries on the procurement portal.

PPRA said an analysis of data from the 2016/2017 to 2024/2025 financial years revealed an increase in the use of the Public Procurement Information Portal (PPIP) for tender postings and contract publications.

However, the watchdog said while the data reflects growing adoption of the PPIP, there is an inconsistency between tenders posted and contracts published, which is “an indication of gaps in compliance, particularly regarding post-award transparency.”

PPRA Director-General Patrick Wanjuki said the rollout of the electronic Government Procurement (e-GP) system, where beneficial ownership disclosure has been fully embedded across all procurement methods, will enhance transparency in tender processes going forward.

“The e-GP system is designed to enforce compliance by ensuring that procurement processes cannot be completed unless the required beneficial ownership information has been disclosed,” he said.

The system, which officially went live on July 1, 2026, is integrated with key government databases, including the Kenya Revenue Authority, Business Registration Services and financial institutions, enabling automated verification of supplier information and strengthening due diligence throughout the procurement process.

PPRA has been pushing for increased transparency in the public procurement processes.

The rules on beneficial ownership disclosure were entrenched in law through amendments to the Companies Act in 2019 and subsequent Companies (Beneficial Ownership Information) regulations issued in 2020 and 2022, which expanded the obligation to firms bidding for public tenders and public-private partnerships.

Under the rules, companies must submit details of their beneficial owners at the bidding stage, with successful contractors required to provide full disclosure before signing contracts.

The information is then expected to be published on the PPIP to enhance transparency.
However, the PPRA report shows that compliance remains patchy, with many firms either failing to submit the information or providing incomplete disclosures, effectively shielding the real beneficiaries of public contracts.

The push for full disclosures of the ultimate beneficiaries of State tenders has come amid increasing global scrutiny following concerns that opacity in company ownership fuels corruption, tax evasion, money laundering and even terrorism financing.

The Financial Action Task Force (FATF), the global watchdog on illicit financial flows, has long recommended that countries establish mechanisms to ensure that beneficial ownership information is available and accessible to competent authorities.

Kenya’s reforms on beneficial ownership were partly driven by the need to align with FATF standards as well as pressure from the International Monetary Fund to unmask and publish the owners of firms winning state contracts as part of the loan access terms.

→palushula@ke.nationmedia.com

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