Foreign firms will now be locked out of government tenders below Sh5 billion and will only be restricted to offering labour services.
This is among the new amendments that MPs want included in the Public Finance Management Act.
Should the MPs endorse the amendments, the limit for foreign firms bidding for taxpayer-backed contracts will be raised from the current Sh500 million to Sh5billion.
There has been complaints that foreign firms, especially Chinese companies have taken over tenders that would constitutionally be eligible for Kenyan companies with some building bridges for as low as Sh100 million.
“The principle act is amended by including that the exclusive preference threshold for citizen contractor which will be Sh5 billion for procurement in respect of works goods and services,” said Mbeere North Member of Parliament Geoffrey Ruku.
In the amendment, Ruku proposes that all construction material and other inputs that are readily available or readily sourced will be required to be restricted to Kenya with foreign contractors limited to labour only contracts.
The MPs argued that the move is aimed at protecting local contractors who have been edged out leaving them to scramble for the few available jobs in the ministries and counties.
“We have seen recently tenders of works as low as Sh500 million, Sh200 million and Sh100million going to foreign companies. So does it mean that Kenyans companies are not worthy to get jobs worth Sh100 million? This will give room to grow our local contractors,” Ruku told the Departmental Committee on Finance and National Planning.
He said the amendments will ensure the growth of local contractors, increase local circulation of money, save on foreign exchange and create employment.
Kenya National Highways Authority (KeNHA) has previously defended the dominance of foreign contractors in the country arguing that externally financed development projects come with conditions.
Chairperson of the committee and Molo MP Kuria Kimani, said some of the regulations in the Act will have to be left under Public Procurement Regulatory Authority to ensure quick implementation of the amendments.
“I think we may have to review the whole amendment Bill and pick out what is we really need to legislate and leave those others that don’t need to be implemented as a policy document within say the public procurement authority so that again we don’t have to have so many bottlenecks that will make operationalisation of new amendments difficult,” said Kimani.
In April, Embakasi Central MP Benjamin Gathiru sought to have section 157(8) of the Public Procurement and Asset Disposal Act, 2015 amended by deleting the word Sh500 million and substituting thereof with Sh20 billion.
Gathiru told parliament that a few Chinese companies amassed road and infrastructure contracts worth Sh1 trillion under the Jubilee administration, leaving Kenyan contractors to fight for small roads and sub-contracts.
Their speed, financing muscle and negotiation power have endeared them to almost all government departments, ministries and parastatals, which have seen them lock out local firms in lucrative tenders.
