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Fresh judicial review after tender evaluation criteria changed during due diligence

The Court of Appeal in Kenya has ordered a fresh review of a disputed Kenya Electricity Generating Company (KenGen) tender for carbon credits, after finding procurement principles were not properly followed. The decision drew public, regulatory and media attention because it questions whether evaluation criteria can be altered during post-submission stages. The main parties are KenGen as the procuring entity, the bidders who contested the process, and the Court of Appeal that issued the ruling. Carbon-credit contracts carry financial and reputational stakes for public utilities, which added to the scrutiny.

What is established

  • The Court of Appeal directed a fresh review of the KenGen tender for carbon credits, citing defects in the procurement process.
  • KenGen was the contracting authority managing the tender for carbon-credit services or instruments connected to its operations.
  • The decision rests on the legal principle that procurement entities should not introduce new evaluation criteria during due diligence after bids are submitted.
  • The judicial order does not award the contract to any bidder; it requires the procuring entity to re-run parts of the evaluation process consistent with procurement rules.

What remains contested

  • The precise impact of the Court of Appeal order on existing commercial negotiations and any interim arrangements depends on how KenGen implements the ruling and whether further legal steps follow.
  • The extent to which the procedural errors changed the competitive ranking of bidders will be determined by the fresh review and remains unresolved.
  • Whether the court’s interpretation of procurement law will prompt wider changes in how state-owned utilities carry out due diligence is an open policy question.
  • Stakeholders disagree on remedies: some want a strict re-evaluation, others prefer limited corrections to protect project timelines. Those differences are procedural rather than factual right now.

Background and timeline

KenGen issued a public tender seeking providers or structured arrangements for carbon credits linked to its generation assets. Bidders responded under the published evaluation framework. During post-submission due diligence, the procuring team applied additional assessment factors that were not set out in the tender documents. An aggrieved bidder challenged the shift and the matter reached the Court of Appeal. The court held that adding or changing evaluation criteria during due diligence conflicts with procurement law and ordered a fresh review of the tender evaluation. The remedy required revisiting the evaluation within the legal framework, without resolving commercial merits or awarding the contract.

Stakeholder positions

  • KenGen (procuring entity): Accountable for running the tender and now required to carry out the court-ordered review in line with procurement rules.
  • Bidders and market participants: Those who challenged the process say post-submission changes undermined fairness; other bidders are watching to see how the re-evaluation affects competitive positions.
  • Judiciary: The Court of Appeal framed the ruling around procurement integrity and the need for predictable, pre-published evaluation criteria.
  • Regulators and civil society: Oversight bodies and watchdogs have an interest in precedents that limit procedural discretion during tender evaluations.

Institutional and governance dynamics

The case highlights tensions between operational discretion in public procurement and the legal need for transparent, pre-defined evaluation frameworks. State-owned utilities like KenGen must balance speed and commercial negotiation flexibility with strict compliance. When tenders involve novel instruments, such as carbon credits that mix environmental, regulatory and commercial factors, evaluators may feel pressure to adapt during due diligence to capture complex risks. Legal rules aim to prevent after-the-fact changes that can disadvantage bidders and erode confidence. The ruling highlights the challenge of designing procurement processes that handle technical uncertainty while protecting fairness and predictability.

Regional context

Across Africa, procurement reforms and judicial oversight are shaping how governments and state-owned enterprises handle complex commercial transactions, including climate-related instruments like carbon credits. Courts stepping in reflects growing demand for transparent tendering and clearer rules for new markets. The balance between compliance, commercial agility and project delivery is especially relevant for energy utilities, which must meet operational timelines while engaging with evolving carbon markets, donor-funded programmes and regulatory reporting requirements.

Forward-looking analysis: implications and practical steps

In the short term, KenGen must carry out the court-directed review in a way that strictly follows the published tender criteria or legally allowed clarifications. That will likely delay contract awards and downstream implementation, affecting planned carbon accounting and potential revenue flows. Over the longer term, procurement teams running carbon-related tenders should specify technical, legal and verification parameters more clearly before bidding starts, disclose due-diligence protocols up front, and set governance checks to limit post-submission discretion. Regulators may issue guidance clarifying the permissible scope of due diligence. For bidders, the ruling reinforces the need to document compliance with original tender criteria and to seek timely remedies if processes shift.

Short procedural narrative

  1. KenGen published a tender for carbon-credit services tied to its power assets.
  2. Bidders submitted proposals under the tender's stated evaluation framework.
  3. During due diligence, the procuring team applied additional evaluation considerations not explicitly listed in the original criteria.
  4. An aggrieved bidder challenged that shift in the courts, arguing it undermined the procurement process.
  5. The Court of Appeal ruled that introducing new evaluation criteria during due diligence was inconsistent with procurement law and ordered a fresh review of the tender evaluations.

Practical recommendations for institutional actors

  • Procuring entities should publish comprehensive technical and evaluative criteria up front for complex tenders, including carbon-related procurements.
  • Draft tender documents to anticipate technical complexity by specifying allowable due-diligence activities and limits on evaluator discretion.
  • Procurement oversight agencies should consider issuing clarifying guidance or training for state-owned enterprises on handling novel markets and due-diligence limits.
  • Bidders should keep contemporaneous records of submissions and any post-submission requests, and use pre-defined administrative remedies if processes shift.

Why this matters: public procurement determines how public assets, liabilities and environmental opportunities are transacted. Court-ordered reviews like this one sharpen legal and administrative expectations for transparency and predictability, especially where emerging asset classes such as carbon credits intersect with public utility operations.

Note: This article draws on the appellate decision and reporting of the KenGen tender dispute to analyse institutional implications. It focuses on procurement processes and system dynamics rather than assigning individual fault.

Procurement disputes in Africa increasingly intersect with complex commercial and environmental markets, prompting courts and regulators to clarify how public institutions should manage technical uncertainty without undermining fairness. This ruling fits within a broader push for stronger procurement governance across the continent: from energy utilities to public agencies, institutions must balance commercial agility with transparent, rules-based processes to retain investor and citizen confidence.

procurement · tender · review · governance · public sector