EXPLAINER: What you need to know about e-procurement

The government has insisted that it will go on with the World Bank-backed controversial electronic procurement despite opposition from Parliament and the Council of Governors.

The e-Government Procurement (e-GP) system was officially launched on April 7, 2025, and is set to become the sole platform for all public procurement processes across Ministries, Departments, and Government Agencies (MDAs) starting from the 2025/26 financial year.

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CURBING PROCUREMENT-RELATED FRAUD

According to the National Treasury, the system is expected to save the country up to Sh50 billion annually by curbing procurement-related fraud and inefficiencies.

Section 7(c) of the Public Procurement and Asset Disposal Act (PPADA), 2015 has mandated the National Treasury to design and prescribe an efficient procurement management system for the National and County Governments to ensure transparent procurement and asset disposal as contemplated by Article 227 of the Constitution.

The e-GP system digitises the entire procurement process—from planning and bidding to contract management and payment. Suppliers are required to register on the platform, submit bids online, and track the status of tenders and contracts.

To enhance transparency and reduce fraud, the system is integrated with key government databases, including the Kenya Revenue Authority’s iTax system, the Integrated Financial Management Information System (IFMIS), the Business Registration Service, and the Integrated Population Registration System.

The Treasury states that e-procurement is an initiative aimed at enhancing transparency and accountability, establishing an open marketplace for procurement needs, and supporting the introduction of procurement reforms to better manage and monitor public procurement activities.

“Beneficiaries include not only governments and suppliers but also the public at large in having access to transparent information on the public expenditure of taxpayers’ money,” Treasury states on its website.

The government insists that among the benefits of the system are enhanced transparency and accountability achieved from online publication of tender notices, contract award notices, online bid submission, and procurement audit trails.

STERN WARNING

On Sunday, President William Ruto issued a stern warning to government officials resisting the adoption of e-procurement system declaring that there is no turning back in the fight against corruption and wastage of public resources.

The President said some individuals within the government are adamant about clinging to outdated procurement methods that have long enabled corruption and inflated public spending.

“There are people who want to stick to the old ways where the government buys a product worth Sh2 at Sh10,” the President said in Siaya after attending a church service, adding that the system is designed to open up government spending to public scrutiny, ensuring that every coin of taxpayers’ money is accounted for.

“Any officials who are not ready to continue with e-procurement can leave as well. They will not stop us from fully adopting this system and ensuring our resources are used as expected.”

Treasury CS John Mbadi accuses heads of procurement of misadvising accounting officers (PSs and CEOs) to oppose the changes while telling off critics of the new system.

“I am not getting distracted in implementing the e-procurement. EGP is the way to cut down on wastages in government. My plea to accounting officers is, don’t listen to your procurement officers because they don’t want to let go of where they have been stealing public funds,” Mbadi spoke in the same event attended by the President.

The Treasury CS accuses critics of e-procurement of being ignorant, saying although the system, just like any other new system, will have challenges, it will eventually work.

He insists the system was procured in 2022 at US$2.9 million, or about Sh370 million, and not Sh5 billion as claimed in some sections of the media.

THREATS TO SUE

The Council of Governors (CoG) through Chairman Ahmed Abdulllahi, has warned the National Treasury that the council will be compelled to instate a court action should they not reconfigure the Integrated Financial Management System (IFMIS) to enable county governments to upload their procurement plans as per the previous regime.

Governors insist the transition has been hasty, incomplete and marred with inconsistencies, causing confusion and paralysis across procuring entities

"In this regard, the Council asks the National Treasury to lift any administrative blocks related to the implementation of e-GP, failure to which we shall be constrained to seek legal redress on the underlying issues as this borders on provision of services across all Counties," CoG boss said.

National Assembly has since voted to nullify a circular by Treasury while Senators led by Narok’s Ledama Ole Kina raised concerns over the national government’s directive requiring county governments to adopt an e-procurement system.

"With the utmost respect, Mr. President, county governments are constitutionally semi-autonomous. Article 219 clearly mandates that counties receive their equitable share of revenue without undue delay and without deduction," Ledama states.

On Tuesday, 19th August 2025, the National Assembly unanimously endorsed a report of the Delegated Legislation Committee that recommended the annulment of the circular 04/2025 issued by the Public Procurement Regulatory Authority (PPRA) on August 12 on grounds that there was no public participation.

“The circular seeks to amend the law without involving parliament and without public participation. The circular outlaws the manual submission of tender documents and purports to impose punishment. They should have initiated the amendment of the law to allow the electronic system,” committee chairman Samuel Chepkonga said.

PPRA Director General Patrick Wanjuki says that all government agencies were required to comply with e-procurement starting July 1 failure to which “any manual transaction shall be surcharged on the officer who authorized the transaction.”