Kebs locks out Swiss firm from lucrative tender over graft case

A fine imposed on Swiss firm Sicpa by its home country in April last year could have set it up for rough times when seeking businesses in other markets including Kenya. 

The firm has suffered a major blow after the ="https://www.standardmedia.co.ke/business/business/article/2001493607/kebs-now-shifts-focus-to-msmes-to-reverse-state-victim-fear-tag">Kenya Bureau of Standards (Kebs)< blocked it from participating in a tender for printing standardisation mark stickers.

Kebs cited the Sh11.7 billion fine by the Swiss government after it was convicted of failing to put in place adequate measures to prevent bribes to public officials in countries where it operates.

This has come back to haunt the firm, with Kebs using these grounds to disqualify the firm from participating in one of its lucrative tenders. 

The exchange between Kebs and Sicpa took place at the Public Procurement Administrative Review Board (ARB), where Sicpa protested clauses in a tender document by Kebs that may have ="https://www.standardmedia.co.ke/national/article/2001466305/kra-swiss-firm-on-the-spot-over-multi-billion-excise-deal">locked it out of a job to print special stickers< for the standards agency. 

The firm, which provides special inks used in printing documents such as currencies and passports around the world, has taken issue with a clause in a tender document by Kebs that would bar firms that may have been accused of or charged with irregularities including bribery.

Paid fines

In the tender documents in which Kebs is seeking to recruit a company to print standardisation mark stickers, Kebs requires the tenders not to have been “convicted or paid fines anywhere in the world, directly and indirectly for any irregularities regarding government contracts such as bribery or organisational deficiency”.

Sicpa lodged a request for review at the procurement review on April 9 this year, in which it wanted ARB to compel Kebs to expunge the clause or nullify the tender and have Kebs start it afresh. It however suffered a blow after ARB dismissed the request and ="https://www.standardmedia.co.ke/business/business/article/2001476130/taxpayers-to-lose-sh25b-as-kra-terminates-swiss-firm-contract">directed Kebs to go on with the tender<.

Sicpa had protested that some of the requirements were unconstitutional and also contravened procurement law, which requires Kebs to use standard procurement and asset disposal documents, which “do not mention ‘organisational deficiency’”.

The clause, Sicpa noted, was not defined by Kebs and also does not have a legal basis and that the tender document was unfair, discriminatory and uncompetitive.  It added that it had previously participated in Kebs tenders that did not have such a requirement. In its submissions to the board, Sicpa argued that the “use of ‘organisational deficiency’ was targeted at the applicant (Sicpa) when the same did not constitute an offence related to procurement in Kenya or any other jurisdiction”. 

“It is the applicant’s contention that the tender document offended Article 27 of the Constitution of Kenya, 2010 by depriving the application of the protection and benefit of the law by locking it out of the procurement process to the advantage of other tenderers,” Sicpa had said through its lawyers.

It added that Kebs was “purporting to debar the applicant from participating in the subject tender without following the channel provided for under the (Public Procurement and Disposal Act)”.

Kebs however said it had followed all requirements of the constitution and the procurement laws.  In its submissions to ARB, Kebs said that “the tender document was not prepared with a view of disqualifying the applicant (Sicpa) or any other tender but consistent with requirements of the Act and the Regulations 2020… the requirements were simply speaking to the suitability of tenderers offered contracts by public entities”. 

“The requirement demands that the tenderer must not have been convicted or paid fines for any irregularity on government contracts was in tandem with section of the Act which requires that any tenderer that has committed an offence under the Act of committed an offence relating to procurement in any other jurisdiction is in fact supposed to be debarred from the public procurement in Kenya,” Kebs told ARB in its submissions.

The standards agency further noted that organisational deficiencies are provided for in the Public Procurement and Disposal Act, which provides that “a company can be debarred for procurement offences committed anywhere in the world. Further, that organisation deficiency may include bribery, provision of misleading information, misreporting or any form of corruption which are all fraudulent practices under the Act and the Regulations 2020.”

ARB threw out the request for review by Sicpa in a decision on April 30. “The request for review dated April 9, 2024, be and is hereby dismissed,” said ARB. Sicpa has been supplying excise stamps to the Kenya Revenue Authority since 2013.