www.kism.or.

ke | Issue 020 - July 2018

Quarterly Issue | 020 - July 2018

1. KISM NEWS
Inside this Issue;
1st Annual General Meeting of the Institute,
1. News
30th April 2018
2. KISM Programs
3. Professionals on the Move
4. Notice Board
5. KISM Interview
6. Feature
7. PPRAB Ruling- Case Study
(Transcend Media Group
Ltd Vs Independent Elec-
toral & Boundaries Com-
mission (I.E.B.C) (Procuring
Entity) and Scanad Kenya From Left, Mr. Dickson Mwenze (Council Member), Eng Chris Oanda (Chairman), Mrs Florence Oile (Council Mem-
Limited (Interested Party) ber), Mr Francis Murabula (Council Member) during KISM AGM on 30th April, 2018, at KICC

8. Global Perspective

Members follow proceedings during KISM AGM on 30th April, 2018 at KICC.

The first Annual General Meeting of the Institute, convened on 30th April, 2018 at KICC Amphi-
theatre. Transacted the following business; Chairman’s Report for the period ended 31st Dec
2017, Annual report and audited financial statements for the period ended 31st December
2016 and any other business. Proposals to strengthen the Supplies Practitioners Management
Regulations were received and the Institute is in the process of developing a memorandum
of proposed changes, and will be shared with members before the amendments are imple-
mented. All documents presented at the AGM have been posted on KISM website.

1 KISM e-Newsletter | July 2018

www.kism.or.ke | Issue 020 - July 2018

2018 IFPSM World Summit: Procurement in the 2020’s –Discover the

New Role of Procurement
The 2018 Summit will be held in Hel-
sinki, Finland on 26 – 29th Septem-
ber, 2018, courtesy of the Finnish
Association of Purchasing and Logis-
tics, themed: “Procurement in 2020’s:
Discover the New Role of Procurement”.
The summit will offer insights into the
megatrends, technology utilization,
sustainability and the human factors,
that will spur innovation and change
the traditional perspective on supply
chain management.

A section of Kenya delegation at the IFPSM World Summit 26 – 29th 2018 at Finlandia Hall, Findland

WORLD BANK TRAINING OF TRAINERS (TOT)

KISM delegates at the Workshop on World Bank’s New Procurement Framework in June 2018 at Radison Blu Hotel, Kigali Rwanda.

World Bank published its New Procurement Framework and con- ToT. 27 practitioners who regularly train for the Institute attended
ducted a Training of Trainers Workshop in Kigali, from 18th – 22 June, the ToT and are expected to support the Institute in future delivery
2018, at Radisson Blu Hotel. KISM is among the few institutions in of training, built around the Bank’s Procurement Framework.
Africa, that was invited to nominate trainers (members) to attend the

2 KISM e-Newsletter | July 2018

www.kism.or.ke | Issue 020 - July 2018

2. KISM PROGRAMS
Membership

Members at a Forum on 25th June, 2018 at Hilton Hotel, Nairobi.

KISM will deliver a second series of short member workshops in No-
vember, 2018, structured to address the following key issues;
1. Key concepts that drive procurement performance in organisa-
tions today.
2. Review and amendment of KISM Elections regulations.
3. KISM elections roadmap.
Members will be able to access membership renewal invoices di-
rectly in their mail inbox following automation of invoicing services.
Renewal fees for both membership and licence is to be paid before,
or in January, each year and members are encouraged to update
their status.

CPD Programs

Participants at the Workshop on Developing specification in June 2018 at Acacia Hotel, Kisumu.

3 KISM e-Newsletter | July 2018

www.kism.or.ke | Issue 020 - July 2018
CPD workshops were increased from 15 in 2017 to 24, in 2018. The
increase is necessitated by growing demand for capacity building
workshops. The expanded program includes low cost workshops,
introduced in response to request from members. KISM pro-
grammes help professionals deliver real strategic and sustainable
value to their organisations. The quality of programs leaders and
range of training are designed to suit professionals at all levels.
CPD workshops held in the period April - June 2018 include:
- Complex and specialized procurement, 1 day in April, Mom-
basa.
- Supply Chain Management for County chiefs and County
Heads of Supply Chain, 4 days in April, Mombasa.
- Procurement Performance Management and Performance
Contracting, 4 days in April, Arusha.
- Supplier Management and Supplier Audit 3 days in May, Na-
kuru.
- Preference and Reservation Schemes, 2 days in May, Nakuru.
- Chief Executive Officers / Accounting Officers role in public
procurement 2 days in June, Nakuru.
- Developing Purchase Specification and Evaluation Criteria, 4
days in June, Kisumu.
Examinations
KISM in collaboration with learning institutions held several men-
torship programmes in various universities and colleges to sensi-
tise students on global trends in procurement and supply chain
management. The procurement and supply chain students’ forums
have enabled the students to interact with senior practitioners and
academicians in the profession. The thematic areas included:
a) Professionalism in supply chain management (formal training,
CPSP-K certification, membership, licensure, and continuous pro-
fessional development)
Participants during Coast Procurement Students Regional Forum
4 KISM e-Newsletter | July 2018
b) Emerging technologies such as blockchain technology, Arti-
ficial Intelligence and use of drones in supply chain management
c) Global supply chain management, e-commerce and tariffs
d) The changing legal frameworks
e) Sustainability
The Coast Procurement Students Regional Forum, organised by
KISM in collaboration with the University of Nairobi, Mombasa
Campus, with participation of students from six universities and
colleges. Students were urged to enroll for Certified Procurement
and Supply Professional of Kenya (CPSP-K), to enable them have a
competitive edge in the industry. We hope to continue with this
programme in 2019 as more institutions have already sent invita-
tions.
Information on registration, examinations and application for ex-
emptions is available at KISM offices, KASNEB offices and on www.
kism.or.ke.
In-House Training & CIPS Program
Customised workshops are available to organizations that want to
train a large number of staff in a specific area of interest in pro-
curement and supply. The trainings are interactive and feature case
studies with practical examples, delivered by experienced and
skilled resource persons.
Customised trainings delivered between April and June 2018 are
as follows:
1. KASNEB - PPADA 2015, 3rd - 4th April, 2018
2. Kenya Pipeline Corporation Retirement Benefits Scheme, PPA-
DA 2015 – 7th -9th May, 2018
3. Energy Regulatory Commission – Streamlining
Procurement,17th 18th May, 2018
4. Tele Posta Pension Scheme (BOARD) – Streamlining
Procurement,19th-20th May, 2018
5. Stima Sacco - Developing Specifications & Evaluation Criteria,
4th-5th June, 2018
6. Stima Sacco - Tendering Process and Bid Evaluation - 6th-7th
June, 2018
7. University of Nairobi - PPAD Act 2015 – 21st June, 2018
8. Crown Paints – Managing inventory – 9th-10th July, 2018
CIPS
CIPS tuition program for levels 4 (day, evening and Saturday classes),
5 (evening & Saturday classes) and 6 (evening & Saturday classes),
is ongoing for July 2018 examinations at the KISM School located
on 2nd floor Cambrian Building along Moi Avenue Nairobi. KISM
tuition program continues to attract high enrolment due to its suit-
ability to the industry; we are now a preferred partner, with most
employers, in training their teams on procurement and supply
chain management. More details on requirements can be down-
loaded from our website www.kism.or.ke
www.kism.or.ke | Issue 020 - July 2018

3. PROFESSIONALS ON THE MOVE

This segment traces where senior supplies practitioners are, particularly
those that have changed jobs in the recent past. We shall be profiling
other practitioners in our subsequent issue and encourage those who
have taken up new positions to notify the secretariat through communi-
cation@kism.or.ke

Name: Wambui Mbugua, C.P.M., CPSM, FCIPS.

Current Employer: United Nations, World Food Program

Current Position: Regional Procurement Manager

Former employer: Lafarge Holcim (Bamburi Cement Limited)

Qualifications: Procurement & Supply Chain Fellow, FCIPS, Bachelor’s

Degree in Urban Studies and Planning w/minor in African Studies from
University of Pittsburgh, USA, Certified Purchasing Manager, CPM from
Institute for Supplies Management (ISM), USA.

4. NOTICE BOARD
THEME DATES TARGET GROUP

CPD PROGRAM

Procurement Docu- 24 - 25, January 2018 Supply Chain Management and Record Officers, Managers, Assistants,
mentation Manage- Nairobi and Specialists; User Departments, operational staff involved in devel-
ment oping and managing procurement records; professional consultants;
departmental heads and purchasing personnel.

Finance for Procure- 11- 13, February 2018 Finance and Supply Chain Management/Procurement Officers, Man-
ment Kisumu agers, Assistants and Specialists; User Departments, operational staff
involved in developing and implementing procurement and supply
chain budgets, policies and strategies; professional consultants;
departmental heads and purchasing personnel, and all other staff
involved in Procurement

Preparing Procurement
Budgets & Workplans
14 - 15, February 2018 Finance and Supply Chain Management Officers, Managers, Assistants
Kisumu and Specialists; User Departments, operational staff involved in de-
veloping and implementing procurement and supply chain budgets,
policies and strategies; professional consultants; departmental heads
and purchasing personnel, and all other staff involved in Procurement

5 KISM e-Newsletter | July 2018

www.kism.or.ke | Issue 020 - July 2018
5. KISM INTERVIEW
Mr Patrick Meyo at a Past interview with KTN on Audits on Heads of Procurement
Mr. Patrick Meyo holds a MBA from University of Birmingham- (UK),
B.Com- Finance (Hons) – UoN, a Professional Diploma in Purchas-
ing and Supply from the Chartered Institute of Purchasing and
Supply (CIPS) – ( UK), and Certified Public Secretary.
He is currently a Co-opted member to KISM council and Procure-
ment and Supply Chain consultant. He previously served as the
Director, Supply Chain Management (SCM) in various government
ministries, Chair to the technical committee that prepared the Pro-
curement Regulations for COMESA, member of the Taskforce that
prepared the Public Procurement and Assets Disposals Regulations
2018, member of the Committee that prepared the Public Procure-
ment and Assets Disposal Act 2015, the Public Procurement and
Disposal Act 2005 and the attendant Regulations, 2006. He has also
facilitated various workshops/seminars in Supply Chain Manage-
ment.
1. You were recently appointed as co-opted Council Member
to KISM council. What key issues do you feel should be ad-
dressed?
KISM as a professional body has taken steps to improve profession-
alism of Supply Chain Management in Kenya. More efforts should
however be put in this area. Such efforts may include:
6 KISM e-Newsletter | July 2018
Enforcing the various aspects of the Supplies’ Practitioners Act cur-
rently not observed like annual licensing of practitioners. Secondly,
whereas it remains the principal legal mandate of the PPRA to de-
velop ethical code of conduct, and it has been so far for several
years now, I am not foreseeing the fruits of that in the near future.
There is nothing stopping KISM as a professional body from taking
a central role in developing such codes, even if not taking the lead-
ing one. However, the cooperation of the National Treasury will be
necessary, and lastly The percentage expenditure on SCM activi-
ties of any organisation varies from 30% to 80% depending on the
nature or type of organisation, then research is crucial. In addition,
and with time, even the training curriculum of those aspiring to be
SCM professionals will require a major review in order to have the
same benchmarked with the world’s trends.
2. The emergence of artificial intelligence forces Procure-
ment chiefs to grapple with a fundamental problem:
What skills do they and their teams need to be success-
ful
As with all disruptive or transformative technology, AI has procure-
ment professionals on their toes, leaving them to wonder about
the fate of their jobs. We haven’t yet experienced the full potential
of AI, but as it comes to fruition, it will need the support of humans,
and it will compel procurement professionals to build their exper-
www.kism.or.ke | Issue 020 - July 2018
tise. While AI may replace a few routine procurement functions, it
will create new roles and transform the role of the modern pro-
curement expert.
The future of procurement with AI will require practitioner skills to
evolve alongside it, taking into consideration the following; em-
brace AI with open arms, become fluent in analytics and data, don’t
put a price on emotional intelligence
3. European nations have embraced Supplier Relationship
Management (SRM) as a strategy in procurement and sourc-
ing. Do you think we need to introduce this in Kenya’s public
procurement?
Having excellent relations with suppliers adds value to sourcing
benefits. Various regions of the world including the European
Countries have adopted this. They did so upon realisation that their
initial adversarial approach was much less favourable. The world
owes a debt of gratitude to the Japanese culture that came with
this approach of cultivating good working relationships between
the buying organisations or companies and their suppliers.
Through this relationships, the suppliers can more easily forecast
the demand of their products/ services. In turn through that fore-
cast, they will make available, the supplies without delay and of
acceptable quality. The European countries copied this from the
Japanese and the sooner we follow their path the better for us.
4. Procurement acts in a reactive way and is often not in-
volved until the specifications have been defined. How can
this be changed?
Specifications are important components in the procurement pro-
cess, they are the major determinants in ensuring we get goods or
services or works of the intended quality. Procurements are of di-
verse nature, covering various disciplines, professions and industry.
It is therefore not practical for any one profession to be adequately
trained to develop competence that would prepare specifications
in all the areas.
For that reason, the law provides that the responsibility of prepar-
ing specifications remains the duty of user units. Where user units
lack the requisite technical capacity, then a relevant technical unit
or organisation, internally or externally procured can be used. It is
not realistic to expect the procurement professionals to prepare
specifications.
5. How can Public procurement shift from the discrete func-
tion of the past, the doers (buyers) to enablers (value adders),
so that they are deemed more useful to the organization and
stay embedded in strategic business units?
By being efficient. When buyers start and complete the procure-
ment process, they are effective and provide some positive con-
tribution, but not necessarily value addition. When procurement
7 KISM e-Newsletter | July 2018
processes are completed at the lowest possible prices without
regard to the required timelines and compliance with specifica-
tions, there is no value addition. Hence, to obtain value addition
the procurement process must be complete within the required
time, without compromise to the specifications and at the most
competitive prices.
6. We all talk about disruptive technology but who’s actual-
ly using it and does procurement have the right skill sets to
manage?
Within the East African region, the Republic of Rwanda is leading
by far. Enabled by digital capabilities, the procurement function
has fundamentally transformed the supply chain performance.
With the constant advances in technologies, organisations must
be ready for disruptions in virtually every aspect of procurement.
At ground level, its impact can be measured in terms of strategic
sourcing, transactions, and supplier relationship management.
The technologies that fuel the disruptions in digital procurement
help to boost operational efficiency as well as cost-effectiveness
by automating repetitive tasks, facilitate accurate business insights
through AI-powered platforms, and enable data-backed decisions
that deliver more to the bottom line.
At the moment, the digital benchmark that has been widely ac-
cepted in eProcurement covers the following sub-categories:
Spend analytics, E-Sourcing, Electronic catalogues, Contract man-
agement, and Supplier information management. These applica-
tions have laid the foundation for a wide range of new technolo-
gies to reach the maturity levels in line with the advancement of
artificial intelligence.
7. How can we balance risk versus speed and agility with tech-
nology as an enabler?
Digital business or technology disruptions in business challenge
the basic principles of risk management. Organisational agility is
the ability to change an organisation’s position relative to the mar-
ket, competition, suppliers and customers. It is achieved through
the integration of: Balance of competing objectives, including cost,
quality and speed, Coordination of various stakeholders, Speed of
decision-making and action, Reflexes or flexible reactions to inter-
nal and external stimuli, Strength in the form of world-class pro-
cesses that allow for actionable decisions, and endurance to stick
with decisions and initiatives and see them to conclusion.
Change is constant and accelerating. Ironically, some of the very
same disruptive forces driving change today can facilitate the pro-
cess by which an organisation becomes more agile.
This disruption however needs to be tempered with a calculated
approach at ensuring organisations do not end up exposing them-
selves to unnecessary risk. This can be achieved through: Develop-
ing a compelling vision for risk management based on establishing
www.kism.or.ke | Issue 020 - July 2018
resilience in your digital business, adapting the strategic objectives
of your risk program to encompass the new realities of digital busi-
ness, Developing and embracing principles of resilience in the
business, developing and evolving an adaptive, context-aware risk
program. And implementing and managing a formal, process-
based risk management program to support the SCM processes
using the digital platform.
8. Automation is a big part of the new supply chain process.
Could you give an overview of how it will make the supply
chain more sustainable?
To succeed in enforcing and maintaining consistent processes in
the supply chain, there are no more powerful allies than automat-
ed processes. Automated processes allow organisations to align
repeatable business processes with achievable business goals by
executing tasks with exacting precision and speed every time.
Organisations worldwide have found that automated processes
from the manufacturing floor to the back office provide greater
reliability and standardisation to align results with expectations.
Core business activities can be streamlined to function according
to consistent business rules and compliance initiatives easily with
automated processes. Instead of simply watching for inconsisten-
cies, inefficiencies, or not-so-green practices, companies that use
automation for the supply chain address the root causes of unsus-
tainable steps.
As organisations focus on sustainable growth, issues of consistency
and quality emerge in every process. Nowhere is this more appar-
ent than in the supply chain. Inconsistent processes produce ineffi-
ciencies that are bad for business and the environment. Inaccurate
information and lack of visibility make demand forecasting more
challenging while also hiding expensive, wasteful steps. By auto-
mating processes as much as possible in the supply chain, com-
panies can make the most of all resources and information while
providing high levels of customer service in a greener and more
sustainable cycle
8 KISM e-Newsletter | July 2018
9. How might the landscape for procurement and supply
change over the coming years and what are the implications
for procurement?
The changing landscape for procurement and supply chain over
the coming years with various implications is huge. The conflict be-
tween increasing globalisation on one hand and serving national
interest on the other through procurement may take interesting
turns. Secondly, as principles of purchasing are applied, the en-
forcement is through the legal instruments of the law, regulations
and rules, having started from the policy. Procurement is increas-
ingly becoming more legal than purchasing.
SCM is increasingly widening its scope. Mastering all aspects of it
may be a challenge, just as it is in other professions like account-
ancy, law, medicine, engineering and computing among others,
and one most important area of specialisation will without doubt
be contract management.
10. What Does the Future Hold for the Supply Chain Work
Force?
The future cannot do without SCM activities. Those activities, even
if substantially automated will require competent human resourc-
es to drive them. Opportunities are bound to increase. It should
however be noted that such opportunities are not for everybody
holding certificates, but will be for those who can deliver. It will
be imperative for professionals to pursue good quality courses and
work hard to achieve results.
11.You are a long serving professional in the supply chain
management field, having practiced the same for over 30
years. What advice can you give to young procurement pro-
fessionals?
My advice for young procurement professionals is not to aspire to
belong to the “club” but work hard to be a real professional, work
within the professional ethical boundaries, share ideas and what
is learnt from elsewhere, attend trainings, aim to excel at work to
earn respect.
www.kism.or.ke | Issue 020 - July 2018
6. FEATURE
Training Key to Professionalism in Procurement
In its Vision 2030 blueprint, the government envisages the creation
of a globally competitive and prosperous nation where citizens en-
joy a high quality of life.
The Vision, that aims to transform Kenya into a newly-industrialised,
middle-income country in a little over a decade, is anchored on
three key pillars: Economic, Social and Political governance. Train-
ing and capacity building fall under the social pillar: Investing in the
people of Kenya.
To meet the Vision’s objectives and produce the quality of service
required to fulfil the aspirations spelt out in President Uhuru Keny-
atta’s Big Four agenda, skilled and competent professionals in Sup-
ply Chain Management will be required. Kenya has a shortage of
skills and expertise in Supply Chain Management required to sup-
port a growing economy.
The need to obtain professional qualifications in Supply Chain Man-
agement is, therefore, critical for both practitioners and employers.
One of the functions of Kenya Institute of Supplies Management
(KISM) is to raise standards of professional competence among its
members. In its endeavour to achieve the strategic objectives and
functions stated above, the Institute has developed a curriculum,
and in partnership with KASNEB (Kenya Accountants and Secretar-
ies National Examinations Board) administers examinations in the
field of Supply Chain Management as provided for in the Supplies
Practitioners Management (SPM) Act 2007 and the SPM (Examina-
tion) Regulations 2013.
The Certified Procurement and Supply Professional of Kenya (CP-
SP-K) and Associate in Procurement and Supply of Kenya (APS-K)
certifications are designed to impart capabilities, including com-
mercial skills, analytical abilities, problem-solving skills, technical
knowledge of supply chain operations, good understanding of IT
applications, communication skills and motivational skills.
These skills are essential to procurement and supply chain practi-
tioners.
Not surprisingly, universities have seen the need and now offer
degrees in this area. For instance, the Jomo Kenyatta University of
Agriculture and Technology offers a Supplies Management doctor-
ate in this area of study. But even this will need to be supplemented
— The writer is the chairman of the Kenya Institute of Supplies Management
9 KISM e-Newsletter | July 2018
with professional certification. This is especially because the law re-
quires that practitioners get additional professional certification.
In order to limit duplication, KISM gives course exemptions to those
with business college degrees if areas studied are also offered in the
Institute’s internationally-recognised curriculum. However, each
application for exemption will be assessed on its own merit by KISM
which will then determine if the exemption is warranted.
About 2,000 of KISM’s 4,500 members are now registered for exami-
nation and certification. This is an impressive enrolment given that
the curriculum was launched just three years ago. The first lot of
candidates will graduate with professional diploma this year. Those
who have not registered and do not have other professional certifi-
cations are also being encouraged to register.
KISM and KASNEB do not just administer these exams in Kenya.
Candidates in Rwanda and the Democratic Republic of Congo have
also registered to take the Certified Procurement and Supply Pro-
fessional of Kenya (CPSP-K) and the Associate in Procurement and
Supply of Kenya (APS-K) exams in their own countries.
As these examinations get more recognition, it is anticipated that
preference for external certifications, such as the UK’s Chartered
Institute of Procurement and Supply (CIPS) certification will wane.
KISM would want more practitioners to sign up as members as this
will give it more control over its members and ensure they comply
with the Institute’s objectives and, if need be, subject them to dis-
ciplinary mechanism.
Often problems arise when organisations hire procurement officers
who are not members of KISM— it becomes difficult to enforce the
code of conduct.
It is important that practitioners register now because in future,
supply chain professionals will only be allowed to practice if they
have professional certification, even if they work in the private sec-
tor.
This is out of the quest by Supply Chain Management practitioners
to provide quality services to Kenyans.
www.kism.or.ke | Issue 020 - July 2018
7. PUBLIC PROCUREMENT ADMINISTRATIVE
REVIEW BOARD RULING
Transcend Media Group Ltd Vs Independent Electoral & Boundaries Commission
(I.E.B.C) (Procuring Entity) and Scanad Kenya Limited (Interested Party)
We appreciate rulings delivered by the Public Procurement Admin-
istrative Review board, arising from request for reviews submitted
by suppliers for tenders in question. This segment summarizes
grounds for application for review by suppliers, the reply by Procur-
ing Entities and the ruling thereof. Review against the decision of
the Transcend Media Group Ltd Vs Independent Electoral & Boundaries
Commission (I.E.B.C) (Procuring Entity) and Scanad Kenya Limited
(Interested Party) in the matter of Tender No. IEBC/45/2016-2017 for
provision of strategic communication and integrated media cam-
paign consultancy services.
Emerging issues from this case study are: Budget disclosure at ne-
gotiation stage and application of margins of preference in Evaluation
of tenders.
THE REQUEST FOR REVIEW
The Applicant filed the Request for Review on 13th July, 2017 chal-
lenging the Procuring Entity’s decision to award the tender for pro-
vision of strategic communication and integrated media campaign
consultancy services under Tender No. IEBC/45/2016-2017 to the
interested party herein M/s Scanad Kenya Limited. The Applicant
sought for the following orders from the Board based on the above
five grounds: -
1. The Board be pleased to annul the decision of the Procuring En-
tity awarding the tender to Scanad Kenya Limited.
2. The decision declaring the Applicant’s tender as unsuccessful
as communicated vide the Procuring Entity’s letter dated 29th
June, 2017 be set aside and/or annulled.
3. The tendering process be annulled and the Board be pleased to
order that the procurement process starts afresh.
4. The Board be at liberty to make any other order as may be ap-
plicable so that the interests of justice are met.
5. The costs of this Review be awarded to the Applicant.
6. The Board be pleased to direct the Procuring Entity to evalu-
ate the Tender afresh by considering or taking into account the
preferential pricing provided for in the Public Procurement and
Asset Disposal Act (2015).
The Applicant’s submissions
It was the Applicant’s case in support of the first ground of review
that on or about 17th April, 2017, the Procuring Entity advertised
the subject tender and that upon carrying out the preliminary and
technical evaluation of the tenders submitted to it by both the Ap-
plicant and the interested party, the Applicant attained a technical
score of 82% and were invited for financial opening on 5th May,
2017. Upon opening the financial proposals, the Procuring Entity
invited both of them for competitive negotiations in order to obtain
the best price.
The Applicant further submitted that the Procuring Entity’s failure to
10 KISM e-Newsletter | July 2018
disclose its budget was contrary to the Provisions of Section 132(2)
of the Act and also brought about the possibility of the budget be-
ing leaked out to the interested party therefore giving it an upper
hand in the negotiations.
Secondly, under the provisions of clause 2.8.4 of the tender doc-
ument as read together with the provisions of Article 227 of the
Constitution and Sections 3, 86(2), 155 and 157(8) of the Act and
Regulation 50(1) (f ) of the Regulations, the Procuring Entity was un-
der an obligation to apply a 20% margin of preference in favour of
the Applicant since the Applicant was a fully Kenyan owned com-
pany while the interested party was a substantially Foreign owned
company.
Finally, the Procuring Entity breached the provisions of the Act
while undertaking negotiations. That the negotiation process was
undertaken by people who were not members of the Procuring En-
tity’s tender evaluation committee, appointed by the Accounting
Officer to evaluate the tender in question.
The Procuring Entity’s submissions
The Procuring Entity did not breach the Provisions of Article 227
of the Constitution or the provisions of Sections 3, 86(2), 155 and
157(8) of the Public Procurement and Asset Disposal Act and stated
that the Procuring Entity took into account all the provisions of the
law while evaluating the tenders submitted to it by the applicant
and the interested party. He stated that the provisions of Section
132(2)(a) of the Act were irrelevant to the evaluation of the said ten-
ders and that if there was any breach of the said Provision of the
Act by the Procuring Entity, then the alleged breach ought to have
been raised in Review Application No. 50 of 2017 and not in the
present Request for Review.
Finally, on the third ground of review, the procuring entity submit-
ted that the Applicant had not produced any evidence to show
that the members of the committee which carried out negotiations
between the Procuring Entity and he Applicant and the interested
party were not members of the Procuring Entity’s tender evaluation
committee. He therefore stated that this ground of Review was
merely based on speculation and urged the Board to dismiss it as
lacking basis.
THE BOARD’S DECISION
On whether the procuring Entity breached the provisions of Section
132(2)(a) of the Public Procurement and Asset Disposal Act 2015 by
failing to disclose its budget for this procurement to the Applicant
at the negotiation stage. The report shows that both parties held
discussions during the said negotiations which commenced by the
Procuring Entity disclosing the basis for inviting the Applicant for
the negotiations. The explanation of this basis is contained at page
www.kism.or.ke | Issue 020 - July 2018
2 of 4 of the negotiation report where the Procuring Entity’s nego-
tiation committee is recorded to have disclosed the following fact
to the Applicant.
i. It was established that the available budget for consultancy services
for provision of strategic communication and integrated Media cam-
paign was estimated at Kshs. 350,000,000.
In view of the above findings, the Board holds that this ground of
the Applicant’s Request for Review lacks merit and is disallowed.
Secondly, on whether the Procuring Entity breached the provisions
of Sections 3, 86(2), 155 and 157(8) of the Public Procurement and
Asset Disposal Act (2015) and Regulation 50(1)(f ) of the Regulations
by failing to apply a 20% margin of preference in favour of the Ap-
plicant. The Board therefore finds the Applicant and the interested
party companies are wholly owned and controlled by persons who
are Citizens of the Republic of Kenya. None of the two companies
was therefore entitled to be given preferential treatment over the
other and the Procuring Entity was well within it’s right to declare
the interested party’s bid as the successful bid. Applicant’s Request
for Review therefore fails and is disallowed.
Lastly, whether the Procuring Entity breached the provisions of the
Act by allowing persons who were not members of the Procur-
11 KISM e-Newsletter | July 2018
ing Entity’s tender evaluation committee to carry out negotiations
with the Applicant and the interested party. The Board therefore
finds that the above ground of review was not proved and the
same is disallowed.
FINAL ORDERS
Pursuant to all the above findings and in the exercise of the pow-
ers conferred upon it by the Provisions of Section 173 of the Public
Procurement and Asset Disposal Act, the Board makes the follow-
ing orders on this Request for Review.
a) The Applicant’s Request for Review dated 13th July, 2017
challenging the award of tender no. IEBC/45/2016-2017 for
the Provision of Strategic Communication and Integrated
Media Consultancy Services to the interested party herein
be and is hereby dismissed.
b) In view of the urgency involved in this matter, the Procuring
Entity is directed to immediately conclude the Procurement
Process herein by entering into a contract with the inter-
ested party for the purposes of ensuring that the services
sought to be procured through this procurement process
are made available to the public before the date set for the
next general election.
c) The Board orders that each party shall bear its own costs of
this Request for Review.
www.kism.or.ke | Issue 020 - July 2018

8. GLOBAL PERSPECTIVE
How Blockchain Will Transform the Supply Chain and Logistics Industry
By Bernard Marr
Managing today’s supply chains—all the links to creating and dis-
tributing goods—is extraordinarily complex. Depending on the
product, the supply chain can span over hundreds of stages, mul-
tiple geographical (international) locations, a multitude of invoices
and payments, have several individuals and entities involved, and
extend over months of time. Due to the complexity and lack of
transparency of our current supply chains, there is interest in how
blockchains might transform the supply chain and logistics indus-
try.

Let’s look at what is broken, how the unique attributes of block-

chain could help and look at a few examples of blockchain already
impacting supply chains.
How is the supply chain broken?
Our current supply chain is broken in several ways. Over a hundred
years ago, supply chains were relatively simple because commerce
was local, but they have grown incredibly complex. Throughout
the history of supply chains there have been innovations such as
the shift to haul freight via trucks rather than rail or the emergence
of personal computers in the 1980s that led to dramatic shifts in
supply chain management. Since manufacturing has been glo-
balized, and a large portion of it is done in China, our supply chains
are heavy with their own complexity.
It’s incredibly difficult for customers or buyers to truly know the
value of products because there is a significant lack of transpar-
ency in our current system. In a similar way, it’s extremely difficult
to investigate supply chains when there is suspicion of illegal or
unethical practices. They can also be highly inefficient as vendors
and suppliers try to connect the dots on who needs what, when
and how.
What is blockchain and how could it help supply chains?
While the most prominent use of blockchain is in the cryptocur-
rency, Bitcoin, the reality is that blockchain—essentially a distrib-
uted, digital ledger—has many applications and can be used for
any exchange, agreements/contracts, tracking and, of course, pay-
ment. Since every transaction is recorded on a block and across
multiple copies of the ledger that are distributed over many nodes
(computers), it is highly transparent. It’s also highly secure since
every block links to the one before it and after it. There is not one
central authority over the blockchain, and it’s extremely efficient
and scalable. Ultimately, blockchain can increase the efficiency and
transparency of supply chains and positively impact everything
from warehousing to delivery to payment. Chain of command is
essential for many things, and blockchain has the chain of com-
mand built in.
MORE FROM FORBES
The very things that are necessary for reliability and integrity in a
supply chain are provided by blockchain. Blockchain provides con-
sensus—there is no dispute in the chain regarding transactions be-
cause all entities on the chain have the same version of the ledger.
Everyone on the blockchain can see the chain of ownership for
an asset on the blockchain. Records on the blockchain cannot be
erased which is important for a transparent supply chain.
Examples of blockchain being used in supply chains today
Since blockchains allow for transfer of funds anywhere in the world
without the use of a traditional bank, it’s very convenient for a sup-
ply chain that is globalized. That’s exactly how Australian vehicle
manufacturer Tomcar pays its suppliers—through Bitcoin.
In the food industry, it’s imperative to have solid records to trace
each product to its source. So, Walmart uses blockchain to keep
track of its pork it sources from China and the blockchain records
where each piece of meat came from, processed, stored and its
sell-by-date. Unilever, Nestle, Tyson and Dole also use blockchain
for similar purposes.
BHP Billiton, the world’s largest mining firm, announced it will use
blockchain to better track and record data throughout the mining
process with its vendors. Not only will it increase efficiency inter-
nally, but it allows the company to have more effective communi-
cation with its partners.
The transparency of blockchain is also crucial to allow consumers
to know they are supporting companies who they share the same
values of environmental stewardship and sustainable manufactur-
ing. This is what the project Provenance hopes to provide with its
blockchain record of transparency.
Diamond-giant De Beers uses blockchain technology to track
stones from the point they are minded right up to the point when
they are sold to consumers. This ensures the company avoids ‘con-
flict’ or ‘blood diamonds’ and assures the consumers that they are
buying the genuine article.
There are several supply chain start-ups such as Cloud Logistics
who saw an opportunity to provide blockchain-enabled supply
chain solutions to improve efficiencies and reduce costs for the
massive supply chain industry. More will most certainly join them
as they realize the potential and demand for blockchain-enabled
solutions to transform the supply chain and logistics industry.

Courtesy of Forbes Magazine

12 KISM e-Newsletter | July 2018

www.kism.or.ke | Issue 020 - July 2018

For feedback or comment our address is:

Kenya Institute of Supplies Management
Nation Centre, 12th Floor Tower B, Kimathi Street
P.O Box 30400 – 00100 Nairobi
Tel: +254-20-2635807 / 0721-244828 / 0733-333226
Email: admin@kism.or.ke and communication@kism.or.ke

13 KISM e-Newsletter | July 2018