PROCUREMENT LAW NOTES STUDY GUIDE
Public Procurement: Definition and Examples
Public procurement is the process by which government departments, local authorities, or
state-owned enterprises purchase goods, services, or works from the private sector. Because
this involves using taxpayer money, the process is usually strictly regulated to ensure
transparency, fairness, and value for money.
Private procurement is the process where a privately owned business or individual purchases
goods, services, or works to support their own operations.
Key Characteristics
• Flexibility: Private companies are not usually bound by the same strict laws as
government bodies. They can choose a supplier based on a long-term friendship, a
specific brand preference, or a quick negotiation.
• Speed: Because there are fewer "red tape" requirements (like public advertising for 30
days), a private firm can sign a contract in a matter of hours if needed.
• Confidentiality: Private procurement deals are often kept secret to maintain a
competitive advantage.
• Negotiation Power: Businesses often use "direct negotiation" rather than a formal
bidding process to get the lowest possible price or the best shipping terms.
Feature Private Procurement
Public Procurement
Goal To make more profit.
To provide services (like roads or health).
Who they answer
The owners or shareholders.
The general public (citizens).
to
The "Boss" (Law)
Guided by Company
Guided
Law. by the PPDA 2015 (in Kenya).
,Value for Money
Getting the lowest Improving
cost. service levels for people.
Feature Private Procurement
Public Procurement
RelationshipsFocuses on long-term
Focuses on short-term fair competition.
partners.
StakeholdersA small, defined group.
A wide range of people (the whole
nation).
2. The Four "Pillars" of a Good Public System
To make sure government buying is "sound" (healthy and honest), it must follow these four
principles:
I. The Principle of Competition-The government shouldn’t focus on one
sector but several private bidders I order to select the best based on
quality and prices
II. The Principle of Publicity-The government should do tendering publicly
to enhance awareness to potential suppliers /private sectors
III. Use of Commercial Criteria-The government makes decision based on
facts of prices and quality of good ,services or works.
IV. The Principle of Transparency
• The rules must be clear, written down, and followed exactly so that anyone can check if the
process was fair.
, 3. History of Procurement in Kenya (The Simple Version)
Kenya’s system has moved from being "small and messy" to "organized and legal."
• Colonial Era: The British handled everything. Purchases from overseas were done by
"Crown Agents."
• 1978–2001 (The "World Bank" Wake-up Call): The system was weak. There were no
clear laws, which led to corruption and poor services. A famous book called the "Blue
Book" was used to guide things.
• 2005–2010 (The Reform Era): This is when the first major law (PPDA 2005) was
created to bring order.
• 2015–Present (The Modern Era): The PPDA 2015 was born. It makes sure that every
"State Organ" (like the Central Bank or County Governments) follows the same fair
rules.
Public Procurement and Asset Disposal Act (PPADA) 2015-it indicates on how
the Kenyan government wil spend the public money to buy goods and services and works
.This ensures transparency and fairness.
1. History and Start Date(How)
The current laws started on January 1, 2007, originally as the 2005 Act. It was later updated to
the version we use today: the PPADA 2015.
2.When does it start? A procurement process officially begins the moment the government
puts out an advertisement (like a "Tender Notice" in the newspaper) or gives out bid
documents to interested people.
3.Why Does This Act Exist? (Purpose & Objectives)
The main goal is to make sure public entities don't waste money and ensure fairness and
transparency.
4.. Where Does the Act Apply?
If you are a public organization, you must follow this Act for:
• Buying goods and services.
Public Procurement: Definition and Examples
Public procurement is the process by which government departments, local authorities, or
state-owned enterprises purchase goods, services, or works from the private sector. Because
this involves using taxpayer money, the process is usually strictly regulated to ensure
transparency, fairness, and value for money.
Private procurement is the process where a privately owned business or individual purchases
goods, services, or works to support their own operations.
Key Characteristics
• Flexibility: Private companies are not usually bound by the same strict laws as
government bodies. They can choose a supplier based on a long-term friendship, a
specific brand preference, or a quick negotiation.
• Speed: Because there are fewer "red tape" requirements (like public advertising for 30
days), a private firm can sign a contract in a matter of hours if needed.
• Confidentiality: Private procurement deals are often kept secret to maintain a
competitive advantage.
• Negotiation Power: Businesses often use "direct negotiation" rather than a formal
bidding process to get the lowest possible price or the best shipping terms.
Feature Private Procurement
Public Procurement
Goal To make more profit.
To provide services (like roads or health).
Who they answer
The owners or shareholders.
The general public (citizens).
to
The "Boss" (Law)
Guided by Company
Guided
Law. by the PPDA 2015 (in Kenya).
,Value for Money
Getting the lowest Improving
cost. service levels for people.
Feature Private Procurement
Public Procurement
RelationshipsFocuses on long-term
Focuses on short-term fair competition.
partners.
StakeholdersA small, defined group.
A wide range of people (the whole
nation).
2. The Four "Pillars" of a Good Public System
To make sure government buying is "sound" (healthy and honest), it must follow these four
principles:
I. The Principle of Competition-The government shouldn’t focus on one
sector but several private bidders I order to select the best based on
quality and prices
II. The Principle of Publicity-The government should do tendering publicly
to enhance awareness to potential suppliers /private sectors
III. Use of Commercial Criteria-The government makes decision based on
facts of prices and quality of good ,services or works.
IV. The Principle of Transparency
• The rules must be clear, written down, and followed exactly so that anyone can check if the
process was fair.
, 3. History of Procurement in Kenya (The Simple Version)
Kenya’s system has moved from being "small and messy" to "organized and legal."
• Colonial Era: The British handled everything. Purchases from overseas were done by
"Crown Agents."
• 1978–2001 (The "World Bank" Wake-up Call): The system was weak. There were no
clear laws, which led to corruption and poor services. A famous book called the "Blue
Book" was used to guide things.
• 2005–2010 (The Reform Era): This is when the first major law (PPDA 2005) was
created to bring order.
• 2015–Present (The Modern Era): The PPDA 2015 was born. It makes sure that every
"State Organ" (like the Central Bank or County Governments) follows the same fair
rules.
Public Procurement and Asset Disposal Act (PPADA) 2015-it indicates on how
the Kenyan government wil spend the public money to buy goods and services and works
.This ensures transparency and fairness.
1. History and Start Date(How)
The current laws started on January 1, 2007, originally as the 2005 Act. It was later updated to
the version we use today: the PPADA 2015.
2.When does it start? A procurement process officially begins the moment the government
puts out an advertisement (like a "Tender Notice" in the newspaper) or gives out bid
documents to interested people.
3.Why Does This Act Exist? (Purpose & Objectives)
The main goal is to make sure public entities don't waste money and ensure fairness and
transparency.
4.. Where Does the Act Apply?
If you are a public organization, you must follow this Act for:
• Buying goods and services.
