State tenders to be awarded to different firms in proposed law

Government entities that split a tender into two or more contracts will have to award it to different companies. This is aimed at spreading risk and allowing more bidders to benefit according to a proposed legal.

The changes to the Public Procurement and Asset Disposal (Amendment) Bill, 2020 also propose restricting of the contract price within a 15 per cent range of “engineers estimate” to avoid firms quoting low prices only to do shoddy work.

“…in order to provide that in cases where a procuring entity is allowed to split a contract, each part of the split contract should be awarded to a different company,” says the changes to the Bill sponsored by Thika Town MP Patrick Wainaina.

“This is to spread the risk among many companies and also to allow as many companies as possible to benefit from the tender.” According to the Bill, some firms just bid to win tenders and later vary the contract price upwards, thus the need to limit the price within 15 per cent of the “engineers estimate.”

“This is to avoid a company quoting an unrealistically low price to get the tender and thereafter undertaking a below the par job or having to vary the contract price upwards. It would also avoid a company quoting a high price for a contract whose cost is low.”

The Bill seeks to remedy the imbalance existing between local and foreign contractors in accessing State contracts, with the former being disadvantaged.

It also requires the State and counties to settle payments to successful bidders through bank guarantees to avoid late payments for contractors.

The Bill tabled on July 17 seeks to raise ‘exclusive preference’ in tenders for locals from Sh500 million to Sh1 billion. International tenders must also source 60 per cent of their supplies locally.