High Court Blocks Attempt to Cancel Mudavadi’s KSh50 Million Office Renovation Tender

A government ministry’s last-minute decision to cancel a nearly completed KSh50 million renovation tender has collided with a firm judicial warning: public agencies cannot escape procurement scrutiny merely by invoking budget shortages.

The High Court’s judgement, which is likely to have significant implications for Kenya’s procurement landscape, dismissed an effort by the State Department for National Government Coordination to overturn a ruling made by the Public Procurement Administrative Review Board (PPARB).

The court affirmed that the Board had the right to investigate whether the ministry truly lacked funds before deciding to cancel the tender.

Justice Nabil M. Orina’s ruling settles more than a dispute over office renovations.

It sharpens the legal boundaries governing cancellation of public tenders, reinforcing that accounting officers cannot simply cite “inadequate budgetary provision” without convincing evidence.

Instead, they must expect their decisions to withstand independent scrutiny.

The dispute centred on a tender for renovation works at the Office of the Prime Cabinet Secretary Musalia Mudavadi housed at Kenya Railways Headquarters.

By the time the procurement was halted, the process had travelled almost the entire legal distance.

Twelve firms had submitted bids. Evaluations had been completed.

Fossil Agencies Limited had emerged as the lowest evaluated responsive bidder with a quotation of about KSh46.55 million.

Then everything abruptly changed.

Budget Battle

On April 24, 2026, the Principal Secretary terminated the procurement proceedings under Section 63(1)(b) of the Public Procurement and Asset Disposal Act, arguing that unforeseen operational demands had swallowed the project’s budget.

The ministry explained that deployment of 51 newly recruited officers created urgent spending priorities.

Office accommodation, furniture, ICT equipment, and related infrastructure suddenly demanded immediate financing, forcing officials to redirect nearly KSh50 million originally allocated to the renovation project.

Fossil Agencies was unconvinced.

The company challenged the cancellation before the Procurement Review Board, arguing that the ministry had failed to demonstrate any genuine financial crisis.

The Board agreed, setting aside the termination and directing the State Department to resume the procurement process.

Prime Cabinet Secretary Musalia Mudavadi. Photo/courtesy

That decision prompted the ministry to move to the High Court, insisting that the Board had exceeded its powers.

Its main point was based on Section 167(4)(b) of the procurement law, which prevents the Board from looking at procurement cases that have been legally ended under Section 63.

According to the ministry, once it cited inadequate budgetary provision, the Board should have immediately declined jurisdiction without questioning the underlying reasons.

Jurisdiction Tested

Justice Orina disagreed.

In carefully reasoned language, the judge held that the Review Board possesses authority to determine whether it actually has jurisdiction.

That necessarily includes examining whether a procuring entity has genuinely satisfied the statutory conditions allowing termination.

“The invocation of the ouster clause… does not imply that the Board must down its tools immediately,” the judge observed, explaining that the Board retains power to determine whether its jurisdiction has truly been excluded by law.

That finding carries significance well beyond this single dispute.

Had the court accepted the government’s argument, procuring entities could potentially shield controversial procurement decisions from scrutiny simply by citing one of the statutory grounds for cancellation.

Instead, the judgement makes clear that merely invoking Section 63 is insufficient.

Compliance must be demonstrated through credible evidence before the Review Board loses jurisdiction.

The reasoning echoes years of judicial caution surrounding Kenya’s procurement system, an area historically vulnerable to manipulation and abuse.

The court noted that procurement reforms have consistently sought greater transparency and accountability, making independent oversight essential whenever public contracts are abruptly abandoned.

 Evidence Scrutinised

The ministry argued that it had produced sufficient documentation.

Officials pointed to correspondence requesting Treasury approval to reallocate approximately KSh50 million, Treasury budget implementation guidelines, and records showing deployment of the additional officers.

The court, however, found critical gaps.

Although a request seeking reallocation existed, there was no evidence Treasury had actually approved it.

More importantly, the chronology undermined the ministry’s explanation.

The newly recruited officers had already reported to duty in January 2026.

Yet the renovation tender was advertised only in March, long after those staffing changes had occurred.

Meanwhile, procurement had progressed normally.

The project appeared in the annual procurement plan. Treasury had authorised IFMIS access. Evaluation proceeded without objection.

A professional opinion recommending award had been prepared. Only after those steps did the accounting officer reject the recommendation and terminate the procurement.

That sequence proved decisive.

Justice Orina accepted that government agencies may legitimately terminate procurement where funding genuinely disappears after a tender begins.

Parliament intentionally created that safeguard under Section 63(1)(b).

However, he stressed that such cancellations require “cogent evidence” showing funds actually became unavailable through approved reprioritisation.

The ministry, he concluded, had fallen short.

“The purported termination seems to have been an afterthought inspired by other factors beyond what is contemplated in the law,” the judge remarked in one of the judgement’s strongest observations.

Wider Implications

The decision reinforces an increasingly consistent judicial approach to procurement oversight.

Rather than allowing accounting officers to exercise unchecked discretion, the High Court affirmed that specialised institutions like the Procurement Review Board play a critical constitutional role in policing transparency before billions of shillings in public contracts change hands.

The ruling also preserves the Board’s ability to investigate whether procurement cancellations are genuine or merely convenient.

For contractors, the judgement provides reassurance that months of participation in competitive tenders cannot lawfully be erased through unsupported claims of budgetary shortages.

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For government agencies, it sends an equally unmistakable message.

Budgetary constraints remain a lawful basis for terminating procurement proceedings.

But those constraints must be real, documented, and capable of independent verification.

Without that proof, courts appear increasingly unwilling to allow public entities to use financial explanations as an impenetrable shield against procurement accountability.

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