A digital procurement system rolled out by Treasury in July continues to attract criticism, as crucial county and national government services remain blocked, now for the third month.
Treasury implemented the electronic government procurement (e-GP) system to cut procurement costs by curbing over-pricing of supplies, address pending bills by ending misallocations, and revealing processes leading to award of public contracts to watchdogs.
Treasury also hopes that it will eliminate funding to ghost projects, through a requirement that works have geographic location information for traceability.
The e-GP is intended to digitise all public procurement processes from the point an entity advertises a tender until a contractor/supplier is paid.
Under the e-GP, public entities cannot procure anything until their budgets are uploaded by Treasury on the digital platform and after which all processes take place on the system.
A delay by Treasury to implement the system has, however, left entities and businesses stuck as they cannot conduct procurement transactions, which has disrupted services across counties and national government entities. Now counties want the system recalled for improvement before deployment.
“We therefore call on the National Treasury to immediately withdraw the circular directing the counties to implement the e-GP until proper consultations, legal alignment, and capacity-building are undertaken,” Council of Governors (CoG) Chairman Ahmed Abdullahi said on Monday.
The system replaced a previous procurement model that enabled public entities to tender for services and award contracts without any central visibility, and was expected to kick-off on July 1, 2025.
While Treasury rolled out the system on July 1, there have been delays to upload budget documents of national and county governments on the e-GP, which prevented entities from undertaking procurements needed for operations.
By the end of last week, Treasury had not uploaded counties budget documents on the system, meaning no devolved unit had undertaken any purchase since the financial year started two months ago.
A similar situation was experienced in the national government where many agencies were unable to procure, the situation leaving businesses that supply different products to government almost at a standstill.
In Kiambu, for instance, 123 health centres are reported to be on the brink of running out of medicine as they are unable to procure required drugs.
Another state agency is reported to have grounded its vehicles on Monday after their insurance expired and it could not procure a new one. Counties supplying seeds to farmers have warned that delays by the system could now trigger a food crisis.
“In Kiambu, we've had in this meeting now, that 123 health facilities are averaging less than 20 percent in pharmaceutical supplies, and they can't order. In some counties that support farmers with seeds before the rainy season, governors have warned that if seeds are not bought in the next two weeks, we'll have lost our crop for that season,” Governor Abdullahi said.
As counties and national government agencies struggle to deliver procurement-based services, businesses have been experiencing the hit, with suppliers and consultants being required to only offer their services on the e-GP.
Treasury last week said that 1,285 entities and 7,637 suppliers had been registered on the e-GP, with trainings conducted on more than 11,000 public officers and suppliers.
The ministry said it was uploading budget documents for different entities from the Integrated Financial Information Management System (Ifmis) to the e-GP, before entities can start procurement.
“So tendering process begins after the procurement plans are prepared in the e-GP. There's no way you can start tendering without the procurement plan in the e-GP,” Treasury CS John Mbadi said.
The CS promised to upload budget documents of 31 counties on the system by Monday, September 1 but counties have rejected the system in its current format saying it is not working. On Monday, the State Department for Public Investments and Asset Management said it had uploaded all budgets for state departments and independent offices on the e-GP, paving the way for procurement to start.
“The National Treasury hereby confirms that all ministries, state departments and independent commissions & offices have been registered in the e-GP system in readiness for end-to-end electronic processing of procurement of goods, works and services,” said PS Cyrell Odede.
“Additionally, and as a prerequisite to procurement planning, all state departments independent commissions & offices budgets have been uploaded in the eGP system.”
The state department said procurement is expected to start after the agencies validate uploaded budgets, which means that even in the national government it will take some more time before procurement starts.
Even as the new system stalls operations, President William Ruto and the Treasury have been adamant that public institutions must adopt it as they fault the previous procurement model as vulnerable to corruption.
President Ruto on Sunday accused unnamed rogue public officials of sabotaging rollout of the e-GP in order to continue exploiting previous procurement methods that enabled over-pricing.
He said the e-GP would expose entities that procure above market prices and who benefit from dirty deals, while daring officials still resisting the new system to quit the government.
“We are going to implement e-procurement, there is no going back. Any official who is not ready to work with us in e-procurement, they can as well leave government and do something else,” he said.
Governors on their side say they are not opposed to the e-GP, but Treasury must deliver a working system rather than force entities to use a platform that is not working.
They argue that Treasury has failed to address challenges highlighted during piloting of the system in three counties and is instead forcing them to implement it. The devolved units also say their staff need to be trained properly on how to use the e-GP before it is rolled out.
“If it's not working, it's not working. And no one can shove it down our throats. You must address the issues we are raising,” the CoG chairman said.
Abdullahi added that the national government should consult counties to “prove to us that this thing works and it's for the betterment of the country. That's a conversation we're willing to have. Not the threats, not the intimidation. Not raising voices with us.”
MPs have also opposed rollout of the e-GP faulting the executive of implementing decisions requiring their approval through Treasury circulars, but have gone quiet in recent days.
Treasury estimates that the current financial year has Sh1 trillion worth of procurement budget, all which must be undertaken on the e-GP. This averages Sh250 billion for the first quarter, which ends on September 30, underlining the impact delays caused by the system have had in public entities and business operations.
Public procurement forms a huge chunk of expenditure in government, with PPRA records showing that tenders published on the Public Procurement Information Portal (PPIP) stood at 54,354 in 2023/24, mainly for purchase of goods (52 percent), works (28 percent) and non-consultancy services (18 percent).
Contracts valued at Sh262.76 billion were published on the PPIP in the same year, though many public entities did not comply with a requirement to do so.
This is despite the majority of the counties and national government agencies having refused to obey a requirement to upload tenders and contracts on the platform.
Under the e-GP, entities will not be required to upload the public procurement documents on PPIP, since the PPRA has visibility of the new procurement system.
Implementation of the system follows a 2017 review of the previous procure-to-pay module that was being used in government, which recommended that the state implements a standalone e-GP.
The previous module was faulted for weak compliance with public procurement procedures, poor contract management, delays in payment for delivered contracts and weak data and information management.
CS Mbadi last week said the government could save up to Sh150 billion in procurement budgets for the current financial year by just adopting the e-GP. This is through sealing loopholes previously exploited to procure goods and services at high prices and other malpractices.
