Lip service: State locks youth, special groups out of tender billions

DETAILS have emerged of how the state failed to meet its legal obligation to allocate 30 per cent of procurement budget to businesses owned by the youth, women, and persons with disabilities.

The findings have been laid bare in a report by the procurement regulator PPRA, exposing the stark disconnect between policy and practice of tender reservation for the special interest groups.

The Performance of the Special Groups report for the second half of the 2024-2025 financial year has been submitted to Parliament by the Public Procurement Regulatory Authority.

It paints a picture of systemic underperformance, with billions of shillings meant to uplift marginalised groups remaining unspent.

Out of a colossal Sh554.3 billion planned for procurement by 196 reporting entities in the review period, only Sh72.7 billion – translating to 13.1 per cent- was reserved for the special groups.

The number is less than half the legal requirement of 30 per cent, the situation turning out as particularly dire within the national government.

While county governments came closer to the mark with an average reservation of 29.6 per cent, national government entities reserved a paltry 9.7 per cent of their budgets.

State corporations, which control the largest share of procurement spending, were the worst performers, reserving only 8.8 per cent.

Perhaps also alarming is the low rate of actual spending, or absorption, of these already insufficient reserve funds.

Procuring entities managed to award only Sh8.5 billion in contracts to these groups, representing a meagre 11.6 per cent absorption rate of the reserved budget.

This means over 88 per cent of the funds specifically set aside for youth, women, and PWDs never reached them.

"While the reservation policy is being factored into procurement planning... the actual implementation remains far below expectation," the PPRA report states, in what points to a critical failure in execution.

A breakdown of the awarded contracts reveals that women-owned enterprises received the largest share, securing 2,240 contracts worth Sh3.9 billion.

Youth followed with 1,422 contracts valued at Sh3.4 billion, even as persons with disabilities were left furthest behind, awarded a mere 500 contracts worth Sh1.2 billion.

This represents just 12 per cent of the total contracts by number and 13.6 per cent by value, indicating that PWD-owned businesses are consistently sidelined in government procurement.

The report singles out specific entities for gross non-compliance with the constitutionally set threshold.

Key ministries and state departments reserved an average of just 22.1 per cent.

The Department of Public Health and Professional Standards only reserved six per cent, with its performance and delivery management reserving only 11 per cent.

Constitutional commissions and independent offices were not far behind at 12.9 per cent, the most notable example being at the Teachers Service Commission.

TSC had a reserved budget of Sh208 million but awarded only Sh2.2 million in contracts, translating to an absorption rate of 1.1 per cent.

The National Police Service Commission also shut its doors, handing the special groups only 7.6 per cent of the procurement budget in the period under review.

For state corporations, Kenya Power, which reserved Sh9.63 billion, spent a minuscule 0.1 per cent, awarding just Sh13 million.

Central Bank of Kenya reserved 5.7 per cent, while the Judiciary absorbed only 0.6 per cent of its Sh1.79 billion reserved fund.

The Communications Authority, Energy Regulatory Authority, KBC and Biovax didn’t fare any better, handing between 0.3 per cent and 9 per cent.

Ketraco only reserved 4.9 per cent, Kenya Forest Service (12.1 per cent), Kenya Law Reform Commission (7.6 per cent), Moi Teaching and Referral Hospital (8.8 per cent), NSSF (4.9 per cent), NTSA (8.8 per cent), and 8.2 per cent at the taxman, KRA.

Kenya Railways reserved only 1.7 per cent of its massive procurement budget for youth, women, and persons with disabilities, drastically below the legal 30 per cent.

Public universities also fell short of the set threshold, having reserved only 27.5 per cent, even as the likes of Naivasha TVC handed the special groups over 50 per cent of tenders.

The half-year report continues a disappointing trend from the first half of the financial year.

Annually, the government reserved Sh115.6 billion for these groups but only managed to spend Sh18.5 billion—a dismal 16 per cent annual absorption rate.

This translates to as high as Sh97.1 billion that was promised but never delivered to the businesses that need it most.

PPRA decried the non-compliance “despite circulars and directives emphasising the uptake of the 30 per cent procurement spends reserved for the target groups."

The PPRA has recommended in-depth studies to understand the root causes of the low absorption.

The agency has cited both supply-side challenges - capacity of the enterprises, and demand-side barriers, that is, the practices of procuring entities.

It has also called for the development of a robust monitoring framework and "clear accountability frameworks for non-compliance."

The 30 per cent tender reservation for youth, women, and persons with disabilities is not provided by a single constitutional article but is a policy built upon several constitutional principles.

The programme giving effect to this policy is known as the Access to Government Procurement Opportunities (Agpo).

Section 53(6) of the Public Procurement and Asset Disposal Act of 2015 sets the requirement for the reserved tenders.

For an enterprise to qualify for these reserved tenders, it must be a registered legal entity.

Critically, at least 70 per cent of its membership must be from the target group (youth, women, or PWDs), and its leadership must be 100 per cent composed of the target group.

INSTANT ANALYSIS

As the report is considered by Parliament, the special groups it aims to protect are left waiting. There is clear evidence that the legal framework for inclusion exists. But without political will, stringent enforcement, and consequences for non-performing accounting officers, the promise of 30 per cent will remain an empty slogan. As such, the government's commitment to women, youth and special groups will be nothing more than lip service.