Okoiti v Portside Freight Terminals Limited & 12 others

The Supreme Court held that Article 227(1) of the Constitution is the overarching provision governing all public procurement, regardless of the method adopted. The Court of Appeal had misinterpreted Article 227(2) as creating exceptions that allow the SPPP to bypass competitive principles. The Supreme Court clarified that 'preference' under Article 227(2) refers to affirmative action mechanisms for specific groups (women, youth, persons with disabilities), not to single-sourcing or non-competitive methods. The SPPP, like all alternative methods, must still satisfy the constitutional coordinates of fairness, equity, transparency, competitiveness and cost-effectiveness. The court emphasized that the use of any procurement method, including direct procurement, does not exclude these principles.

The court interpreted section 93(1) of the PPAD Act, which states that an accounting officer 'may conduct a pre-qualification procedure as a basic procedure prior to adopting an alternative procurement method other than open tender.' Despite the use of the word 'may', the court held that in the context of Article 227's requirement for a transparent and competitive system, and reading sections 93 to 95 holistically, the word 'may' is not permissive but mandatory. The section imposes a duty on the accounting officer to conduct pre-qualification to identify the best few qualified firms. The court noted that the requirement to 'publish an invitation notice to candidates to submit applications to be pre-qualified' further supports this mandatory interpretation. KPA's failure to conduct pre-qualification was a significant omission that infringed Articles 10, 201 and 227 of the Constitution.

The court distinguished between public interest litigation and representative actions. Under Articles 22(2)(c) and 258(2)(c), any person can institute proceedings in the public interest without needing to show personal injury. However, under Article 22(2)(a), a person acting on behalf of another can only do so if that person 'cannot act in their own name.' The 6th to 11th respondents were named parties who elected not to participate, and there was no evidence they could not act in their own names. The court found that the appellant's petition was properly brought in the public interest, as he pleaded violations of Articles 10, 47, 201 and 227 of the Constitution, and the Court of Appeal erred in holding that the petition was not public interest litigation.

The court held that a master plan or strategic plan is an aspirational document that sets goals and frameworks, but flexibility and adaptability are crucial for long-term planning. While the master plan was developed with public participation, subsequent reviews of aspects that do not substantially change the original objective may be undertaken without fresh public participation. The court emphasized that an institution cannot be subjected to an enforcement action for failing to follow its own self-formulated guidelines. Deviations from the master plan cannot constitute constitutional or legal violations unless they infringe upon statutory obligations or contractual commitments. Article 10(2)(a) of the Constitution was not breached by the variation.

The Supreme Court conducted a detailed examination of the entire procurement process, including the reports of three KPA committees (Technical Committee, EXCOM, and Strategy and Operations Committee). The committees had raised fundamental concerns: the proposal was unclear whether it was a PPP or SPPP; the technical committee recommended a detailed feasibility study; the Strategy and Operations Committee noted that KPA had failed to evaluate all applications and rank them, and recommended competitive bidding under the PPP Act. The Cabinet Secretary's approval was conditional on review of the tender document, but KPA proceeded without demonstrating compliance. KPA failed to conduct a pre-qualification procedure as required by section 93 of the PPAD Act. The court found that the entire procedure, from conception to approval, violated the constitutional principles of fairness, equity, transparency, competitiveness and cost-effectiveness.