Disposal is a critical element of the stores, equipment and other assets management of a Procuring Entity. When any equipment is obsolete, its keeping, through maintenance costs, storage, parking, insurance, etc., may well exceed the returns that can be derived from that piece of equipment and the investment of additional monies. When stores are perishable, keeping them run risks of misuse, using shelf space unduly and not signaling requirements for what may be life savings products. Disposal is thus one of the elements of managing procurement and supply and distribution. It focuses on safeguarding assets and on sending information for decision making.
Disposing is thus a function that is necessary to guarantee that public monies are not applied to useless or obsolete equipment and assets and that when stores are disposed of, they are sold at the best achievable value in the market.
Disposal may be considered as the third life of any items acquired by a Procuring Entity;
- First, it is procured and accepted (the procurement cycle);
- Second it is utilized by the Procuring Entity in the discharge of its duties (the usage life cycle, often referred to as life cycle);
- Third and finally, it has then to be disposed off (the disposal cycle).Because disposal involves residual values that may be received and can contribute to the cost of renewal, it involves deciding when to dispose of a certain item and may involve health and safety standards issues. It has to be regulated and managed as provided for by the Act and the Regulations.
ITEMS FOR DISPOSAL
Regulations define ―Asset‖ as movable and immovable property, tangible and intangible, including immovable property stores, equipment, shares, intellectual rights vested in the state or proprietary rights. It is here therefore clarified that disposal of assets which are not stores or equipment shall not be disposed of under this part although the disposal procedure or method provided in the part may be adopted. For greater clarity where fixed assets like buildings are condemned and are to be disposed of, they shall be disposed of under this part but the land on which they stand is not to be disposed off.
For further clarification, land, shares and rights are not to be disposed of under this part. Where a procuring entity has a problem in deciding whether any of its asset or property is disposable under this part, the PPOA shall be consulted. It also here clarified that items which are sold by a procuring entity in its normal business should not be treated as disposal e.g. sale of meat by the Kenya Meat Commission or furniture and farm produce by the Kenya Prisons Services.