IEBC accused of backing South Korean firm in election tech bid

The Independent Electoral and Boundaries Commission (IEBC) yesterday clashed with a Kenyan firm over the procurement of technology to be used in the 2027 general election.

 On one hand, Galadirel Investment Limited accused IEBC of tailor-making the specifications of the Integrated Elections Management System (IEMS) and the Kenya Integrated Elections Management Systems (KIEMS) kits to fit a South Korean firm, Miru Systems Co. Ltd, bidding documents.

Its lawyer Julius Miiri argued that although the tender had been floated, it had been allegedly deliberately warped to lock out all other competitors.

“The law allows any bidder to approach this tribunal before the tendering process closes,” claimed Miiri, adding that his client believed that the tender was skewed to favour

“At page 78 on the specifications provided, and it is the applicant's case that the specifications mirror the achievements Miru system claims to have achieved,” he added.

The Ethekon Edung-led commission had also floated the tender for supply of ballot papers among others. However, Miiri questioned why the commission had not supplied information on the value of the tender. He said that bidders were required to provide Sh 30 million as tender security.

He further said that the tendering process was similar to groping in the dark as there was no communication about the evaluation.

“The tender documents contain vague, incomplete or undefined technical standards and specifications, including provisions which remain in the nature of instructions to the procuring entity to insert or specify the applicable standards, benchmarks and requirements, thereby exposing tenderers to uncertainty and subjective evaluation,” claimed Miiri.

 He argued that it was unclear the currency to be used in the tender, as well as the standard through which each bid will be

“The tender document does not disclose what the tenderers are bidding for. We agree that IEBC and the PE have the authority to require experience from whoever will supply these. If you go to the website of Miru, what IEBC requires corresponds with Miru’s profile. This has been formulated around Miru’s profile,” he said.

He pointed out that, for example, IEBC requires the tenderers to have at least conducted 11 prior elections. The lawyer claimed this is a replica of Miru’s election.

In reference to local bidders, he said, the money will circulate locally. Miiri asserted that the aim of having local hands is to enable those in the industry to grow.

“ If the materials were being sourced locally, it is much cheaper,” argued Miiri.

In response, IEBC lawyers Edwin Mukele and Moses Kipkogei argued that the case was speculative. Mukele argued that Galadirel should have first sought clarifications or information where it felt the requirements were unclear.

He insisted that the Public Procurement Administrative Review Board (PPARB) has no powers to entertain the case.

Mukele further argued that the request for the review is premature. “ This is premature. For instance, the document claims that the tender document fails to provide particulars. The allegation is that the applicant has come across information... Do you want to revert to the procuring entity to verify that allegation? We are dealing with apprehension,” replied Mukele.

On the other hand, Kipkogei said that no company in Kenya or Africa was qualified or had the expertise the commission requires. He was of the view that IEBC had, however, provided a window for partnerships with local companies, where they can borrow, or there will be a transfer of technology.

“There is no bidder who can achieve those standards; I am highly doubtful you will find such a bidder in Africa. That standard has to be the highest, and it is not available locally. We do not manufacture these laptops and tablets, so, logically, we exclude and allow these bidders to deal with the challenge by use of technology transfer to local contractors,” he replied.

Kipkogei insited that everything was clear.

“Respondents deny the allegation that the tender document is vague, incomplete and contains undefined technical specifications and assert that contrary to this allegation, the tender document has elaborately set out the technical specifications of the equipment sought to be procured. For instance, the tender document from pages 149-182 sets out the specifics of the equipment under the broader headings "Technical specifications for the supply, delivery, installation, testing, commissioning, and support of the Kenya Integrated Elections Management System,”he added.

Separately, IEBC is embroiled in a separate case with the current contractor, Smartmatic International Holdings BV, over Sh 570 million alleged unpaid debt.

In its case filed before the Commercial High Court, In the case, Smartmatic claimed that the commission decided to pay for the contract in Kenyan shillings, instead of the agreed United States of America dollars.

The court heard that a dispute arose, which ended up before an arbitrator who subsequently found that the Erastus Ethekon-led commission had breached its end of the bargain.

However, the firm said that IEBC did not appeal or challenge the amount awarded during the arbitration.

“The claimant asserts that there were delays in payment contrary to the express terms of the contract. More importantly, the claimant argues that the respondent purported to apply an exchange rate meant for the purpose of assessment of the responsiveness of the tender, to payment of the invoices that had been raised and which were payable in USD.

During the arbitration, Smartmatic argued that it suffered foreign exchange loss as the IEBC used a negotiated exchange rate with its commercial banks for the dollar, which at the time of the dispute was at Sh 124.45 for a US Dollar.

It claimed the result was a loss of its margins due to the commission’s decision to pay in Kenya Shillings instead of US Dollars.

 Smartmatic said that there were attempts to amicably solve the dispute, but they proved futile.

“ The respondent herein has failed to file any application seeking to set aside the award within the timelines stipulated by the Arbitration Act, and as such, there exists no reason whatsoever to delay the recognition and enforcement of the award,” said Smartmatic’s Managing Director, Rans Gunnink.

Smartmatic was demanding at least USD 5.03 million, arguing that the commission had unsettled invoices. “ There were delays in payment contrary to the express terms of the contract,” the company argued, adding that it had done its end of the bargain by ensuring that Kenya had held its 2022 election.

It demanded that the IEBC be compelled to pay 13 per cent per annum interest, from April 1, 2024, to the date of the judgment.

On the other hand, the commission denied that there were unsettled invoices.

It argued that the exchange rate applied in the invoices was agreed upon on May 4, 2022, in the contract between them.

IEBC, however, admitted that there was an existing contract. The commission stated that the agreement was that Smartmatic would be paid within 30 days of invoicing, following delivery and acceptance of services.

It asserted that only three invoices were pending payment, and was in the process of being settled after release of funds from the exchequer.

The commission also urged the arbitrator to ignore the interest claim, arguing that the contract did not expressly provide for interest on delayed payment.

On the foreign exchange loss issue, the commission stated that the contract was fixed at Sh 107.90 for a dollar. It asserted that there were no losses as Smartmatic was allegedly aware during the signing of the contract that the commission had settled for the exchange rate.

The commission also said that the contract was in Kenyan shillings, but the dollar invoicing was only adopted as the company had no local banking partner.

“ Any shortfalls arising from exchange rate differences are attributable solely to the claimant’s business decisions and do not give rise to liability on the respondent’s part. As a prudent commercial actor, it ought to have mitigated foreseeable risks, including those related to currency inflation within the three-year contractual period,” replied IEBC.