• The amendments to the Public Procurement and Asset Disposal Act seek to protect vulnerable contractors and suppliers.
• The Gatundu South MP proposes that other contractors and suppliers be paid in 90 days.
Image: FILE
Companies owned by the youth, women and persons living with disabilities and do business with the national and county governments will be paid within 30 days if new changes to Procurement Laws are passed in Parliament.
The amendments to the Public Procurement and Asset Disposal Act sponsored by Gatundu South MP Moses Kuria seek to protect vulnerable contractors and suppliers whose companies have become the subject of auction by lenders and commercial banks.
Kuria is expected to give notice of the proposed changes this week in the National Assembly.
For the other contractors and suppliers who do not fall under this bracket, Kuria proposes they be paid in 90 days after receiving invoices and certificates for procurement.
According to the budget implementation review report for the 2017-18 financial year, Controller of Budget Agnes Odhiambo noted that counties have accumulated Sh108.4 billion in pending bills.
The pending bills have caused untold suffering to contractors and suppliers, who are threatened by auctioneers as banks seize their assets to recover loans.
Two weeks ago, the World Bank Economic Update report urged the national and county governments to pay monies owed to the private sector to spur economic growth, noting that profitability among firms dealing with government is on the decline and as a result of a build-up in pending bills.
The 2018 enterprise survey for Kenya found that approximately 12 per cent of the 1,001 firms surveyed have had a contract with the government and was in arrears.
The affected firms, especially small businesses, end up in bankruptcy and ultimately lead to poor cash flow in the market, a delay in hiring and, in some instances, staff layoffs.
Kuria is seeking to move a number of amendments to the Miscellaneous Amendments Bill 2018 to make it mandatory for procuring entity to pay a successful tenderer within 90 days from the date of receipt of invoices and certificates for works, goods or services executed or delivered.
And where the procuring entity is unable to pay within the prescribed period, they will be required to issue a promissory note which shall be valid for a period not exceeding 48 months from the date of issue.
"The promissory note shall be eligible for use as a financial instrument by any licensed bank and will accrue interest payable by the procuring entity,” Kuria proposes.
If the proposed amendments are passed, accounting officers will face criminal proceedings in their personal capacity for professional negligence and misconduct in case they fail to pay within the stipulated