Presented at the Eland Hotel, Arusha on

Friday, 16th 2010 for a course on the Public

Procurement Act, 2004: Compliance and
Practice

By KISILWA, Zaharani.

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Tendering is an aspect of contracts law and
the law relating to procurement.
 Legal aspects of tenders thus, are embedded
in the principles of contract law, as discussed
in the first presentation, as well as in the laws
that relate to procurement.
 It is worth at this point to identify laws that
apply to procurement specifically.

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 1. The Public Procurement Act, 2004 (herein
after referred to as the Act or the PPA, 2004).
2.The Procurement and Supplies Professionals
and Technicians Board Act, 2007(Hereinafter,
PSPTB Act, 2007) - (Act No. 23/07)

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The PPA was enacted for three objectives
i. To repeal the Public Procurement
Act, 2001

ii. to make better provisions for the

regulation of Public Procurement in the
Government of the United Republic and

iii. to provide for other related

matters

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The PSPTB was enacted with the view to;

i. putting in place better provisions to

regulate practice and conducts of
procurement and supplies professionals and
ii. providing for matters related to
procurement

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2. Subsidiary legislation on procurement includes

i. The Public Procurement (Goods, works, Non-

consultant services and Disposal of public Assets by tender)
Regulations, 2005. This regulation came into force by way of
Government Notice no. 97 published on 15/4/2005. These
regulations were made under s. 88 of the PPA.

ii. The Public Procurement (Selection and

Employment of Consultants) Regulations, 2005 made by way
of the Government Notice no. 98 published on 15/4/2005.
These were also made under s. 88 of the PPA, 2004.

iii. Ethical Code of Conduct for Procurement and

Supplies Professionals published in the Government Notice
no. 365 of 2007.

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 Section 3. of the PPA, 2004 defines a tender
as
i. an offer,
ii. proposal or
iii. quotation
made by a supplier, contractor or consultant
in response to a request by a procuring
entity;

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The following are observable from the definition,
that;
i. Since a tender is an offer, tendering is a
stage towards forming contracts in the
procurement proceedings.
ii. A tender is made by non other than
suppliers, contractors or consultants (one party).
iii. A tender should always be in response
to a request from a Procuring Entity (Another
Party).
iv. Principles that relate to offers in
contract law apply equally to tenders.

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 As an offer a tender is supposed to match
the following features;
i. Clarity and certainty in its
terms/quotations
ii. Must be made and communicated by
one party to another.
iii. The parties must be competent to
contract.
iv. A tender can be accepted only by the
one to whom it is made.

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 Who are the parties in the tendering process?
i. The parties are The Procuring Entity
(P.E) which invites for tenders on the one side
and
ii. The consultants, contractors or
suppliers who respond to invitation for tender
from procuring entity, on the other.

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 Meaning
Under s. 3 of the PPA the P.E is defined as
i. A public body and any other body, or

ii. unit
established and mandated by government to
carry out public functions.

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 Meaning;
Under s. 3 of the PPA, a public body or public
authority is defined as
(i) any ministry, department or agency of
government;
(ii) any body corporate or statutory body or
authority established for the purposes of the
Government;
(iii) any company registered under the
Companies Ordinance being a company in which
the Government or an agency of Government, is in
the position to influence the policy of the company;
(iv) any local government authority;
(v) any Parastatal organization.

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 The P.E then, is;
i. A ministry, department or agency of
the government
ii. Corporate bodies established by
the government
iii. Private companies capable of being
influenced by government in their policies
iv. Local governments and
v. Parastatals

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 The position of P.E within the statutory institutional
procurement machinery is provided by the PPA, 2004 as
follows.

1. PPRA- established by s. 5, headed by CEO, presidential

appointee under s. 20. The authority is an overseer of all
procurement activities in the country.

2. The Procuring Entity (P.E) - S.3

- Tender Board (T.B)-S. 28 of the Act.
- Procurement Management Unit (P.M.U)-Division
of PE that executes procurement functions. s. 34
- Evaluation Committee (E.C)-s. 33
- User Department (U.D)-s. 36

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 Being an entity, a P.E is a legal person
having a distinct and independent existence
of its own. According to Salomon v Salomon
& Co Ltd [1897] AC 22, Entities have the
following characteristics;
i. Perpetual succession
ii. Capability of owning its own
property
iii. Capability to incur liabilities
iv. Capability to sue and be sued in
its own name.
v. Capability to enter into contracts.

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 Except for the PPRA, all other organs i.e. the Tender
board, the PMU, the User Department and the
Evaluation Committee are legally not entities thus
are not privileged to do that which a Procuring
Entity can do.

NOTE:

Thus, Procuring entities are the only persons who

can be parties to which tenders must be directed
and accepted.

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 The processes involved are.
i. Pre qualification
ii. Invitation to tenders
iii. Tender documents, tendering and
tender security s. 53
v. Receipt, opening, evaluation and
approval of tenders
v. Acceptance of tender
vi. Awarding a contract.

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 Meaning s.3
Is a procedure intended to establish resources, capabilities and financial standing
of suppliers, contractors and consultants prior to inviting them to tender.
i. allowed by s. 47 of PPA
ii. P.E must float an invitation to pre-qualify to respective tenderers (its
contents are in Reg. 15 (5))
iii. A procuring entity shall provide a set of pre-qualification documents to
each supplier, contractor, service provider or buyer in accordance with the
invitation to pre-qualify upon paying the price, if any, charged for those
documents. (Reg. 15 (4))
iv. The language must be
- English, generally, s.52 PPA.
- Swahili, at option of P.E, where tenderers are Tanzanians, Reg. 24
Public Procurement (Goods Works and Disposal of Public Assets by Tender)
Regulations, 2005
v. Approval by the T.B of the pre-qualification documents is mandatory. No
approval no validity. Reg. 15 (8) and (9)
vi. Clarification must be given of pre-qualification documents by P.E upon
request to respective tenderers, until within 2 weeks before deadline. Reg. 15(13)
vii. Any response must be communicated anonymously to all respective
tenderers (Reg.15 (14))

Note: Invitation to pre-qualification is an implied promise that responses will be

considered, failure of which may attract legal consequences.

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 viii. Details of the procedure of pre-
qualification must be communicated to Tender
Board by the P.M.U who shall accept modifications
suggested by T.B. Regulation 40 (7)

ix. The following must be sent to T.B by

P.M.U for comments and modifications Reg. 40 (8)
- list of pre-qualified tenderers and
- statement of their qualifications
and
- accompanying reasons
Read also sub regulations 16-25 of the
same regulations.

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 Invitation to tender may be done in two
situations;
i. where there was pre-qualification
proceedings
ii. Where there was no such proceedings

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 Reg. 15 (17) of the Public Procurement (Goods, Works, Non-
consultant Services and Disposal of Assets by Tender)
Regulations require All suppliers, contractors, service
providers or buyers who pre-qualify to take part in a tender
shall be invited except in the following situations (Reg. 10);
i. where the party is bankrupt
ii. Payments to them are suspended by court.
iii. Legal proceedings are instituted against them on an
order to suspend payments to them unless disqualified
subsequently further to Regulation 10.
iv. Convicted of an offense in their professional
conduct
v. they breached a contract (s) with other procuring
entity.
vi. If they are blacklisted under s. 57 of the PPA.

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 The invitation to tender in this situation must
be floated to the world at large without
discriminating one from another.

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i. P.E prepares a Tender Notice inviting prospective tenderers
and submits the same within reasonable time to secretary
of the Tender Board for approval
ii. Publication of the Tender Notice after approval by TB. (s.
31 (1))
-Sufficient time must be allowed to give room for
collection, preparation and submission of tender
documents by interested parties
-Advertisement must specify the deadline
-Advertisement must specify the place where tenders
must be submitted

Note: the dead line time and the place are also the time and
places for opening tenders.

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 Tender documents must be issued immediately after
publication of Tender Notice to all who responded to it s. 62,
PPA.
 Format of tender documents
- standard model tender documents to be used, s. 63
(1)
- clearly worded to encourage competition
- must have all the necessary information to enable
prospective tenderers to prepare and submit their tenders. S.
63 (2)
 PE may require tenderers to submit alongside tenders, a
tender security to guarantee satisfactory performance of
contracts

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 Receipts
- tenders must be received by the tender Board
that approved the issue of tender documents s. 66
(1). Why not to PE, the legal person?

- Secretary to issue receipt that indicates dates on

which tender was received

- tenders must be received before dead line.

- a tender received after dead line must be

returned to tenderer unopened. S. 66 (2)

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 Opening of tenders s. 66, PPA.
- only those received before deadline must be opened
- tenders are opened in public in presence of
(a) tenderers or
(b) their representatives or
(c) any interested party with legitimate interest in
tender proceedings (e.g. students in field placements)
-Tenders must be opened at or immediately after
deadline.
- names of those present must be recorded by secretary
to tender board.
- names addresses and quotations of tenders must be
read aloud by chairman of meeting and recorded by secretary
to T.B or delegate.

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 Evaluation-means determining costs of
each un-rejected tender to the PE.
- done by the evaluation committee of
the P.E
- evaluation must reflect terms and
conditions in the tender documents
- at the end a detailed report is
prepared of evaluation by the PE specifying
why a contract is to be awarded to a
particular tenderer.

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Approval of evaluation recommendations is
done by the TB s. 68, PPA.
The TB may do one of the following;
- i. approve and authorise PE to accept
and award contract as per recommendations
-ii. Disapprove and direct PE to re-
evaluate or to prepare for re-tendering

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 acceptance means an unconditional assent to the
terms of the proposal.
 a tender is a proposal that is directed to the PE.
 Thus a tender has to be accepted by the P.E
according to principles of contract.

Confusion in the law

s. 55 says acceptance is by TB, and PE only notifies
the successful tenderer. See also s. 31 (5)

s. 68 says TB authorises PE to accept tenders after

approving their evaluation.

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 According to contract law principles, once a proposal is
accepted, the offer is turned into a promise and the offeror
becomes the “promisor”, the offeree becomes the “promisee”
s. 2 (1)(b) of the LCA.

 Tender as an offer becomes a promise to which the P.E and

the tenderer are bound subject to its terms i.e. some
contracts are executory in which case they have to be
performed in future.

 If there was free consent the contract is thus arrived at with

obligations to parties to perform what they have promised
one another.

 Note: a contract is awarded only by approval of the TB

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 Undue influence-S. 87, PPA, liability for interfering with or for exerting undue influence on
any officer or employee of the PE or TB in the performance of his functions or in the exercise
of his power under this Act; can be fined 500,000/= or 3 years imprisonment.

 Frauds and corruption-S. 72, PPA, liability on PEs, TBs and prospective tenderers on Frauds
and corruption in procurement proceedings and award of contract. Can be fined 500,000/=
or 3 years imprisonment. See also S. 87 of the Act. See also s. 17 (1) and (2) of the Prevention
and Combating of Corruption Act, 2007.

Consequences for tenderers.

- tenderer may be denied award of contract
- tenderer may be declared ineligible for a period of ten years to be awarded a public
financed contract.
Consequences for persons in PEs and TBs.
- criminal proceeding shall be instituted against him pursuant to the following laws;
- Penal Code, cap 16
- the Prevention and combating of Corruption Act, 2007
- or any other written Law
e.g. The Fair Competition Act, 2003 which prohibits collusive tendering under s. 9 (1)
(c)
 Liability for collusive tendering involves
-generally, prevention of a party from making a tender s. 9 (2)(c) Fair Competition Act,
2003

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 Liability for breach of promise to open and consider a submitted
tender. See
Blackpool and Flyde Aero Club vs. Blackpool Council (1990) 3
All E.R 25 (C.A)
Where a tender could not be posted for congestion in the mail
box, it was held there was a breach of implied promise to open
and consider a tender
 Liability on Improper inducement s. 87 of PPA
 Tempering with submitted tenders (Reg. 107)
- Not to open,
-Burn, destroy, tear or
-Erase any tender.
 Not to attend meetings of PE or TB and discuss tenders if one has
pecuniary interest in it. (Reg. 102)

***********************Adios************************

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