NETTING MORE

Bill seeks 100% local content in tenders to foreign firms

Preference to be given to registered Kenyan brokerage companies

In Summary

• The law provides that locals get 50 per cent of jobs in tenders awarded to foreign firms.

• Provision for contractors to mandatorily source 40 per cent of their supplies locally to be upscaled.

Ongoing construction of Nairobi Expressway near JKIA, Mombasa Road on June 3, 2020
Ongoing construction of Nairobi Expressway near JKIA, Mombasa Road on June 3, 2020
Image: ANDREW KASUKU

Foreign contractors will be required to source supplies from citizen contractors if a bill sponsored by Nyaribari Chache MP Richard Tongi is passed.

The Bill seeks to upscale the current provision for such contractors to mandatorily source 40 per cent of their supplies locally.

Tongi said the amendment to the Public Procurement and Asset Disposal Act will promote the growth of local industries and contractors who have suffered low business flows due to preference of foreign firms.

 

The provision for 100 per cent local content will be part of the preliminary evaluation for companies seeking tenders with the government.

Further, the lawmaker wants ministries, state departments and agencies to require contractors to give preference to registered Kenyan brokerage firms where brokerage services are required.

Local brokerage firms would thus be given preference as has been the case with firms which work with materials produced in Kenya and those with Kenyan  shareholding of above 51 per cent.

Tongi, who is the vice-chairperson of the Defence and Foreign Relations Committee, has also offered options in instances where specialised services are not wholly available in Kenya.

In this case, accounting officers of MDAs will be required to ensure that specialised skills are procured only for a defined period.

“The accounting officer shall require successful bidders to cause transfer of the specialised skills to the relevant persons,” the Bill reads.

The proposed legislation comes hot on the heels of President Uhuru Kenyatta's tightening of procurement laws to secure jobs for Kenyans.

 

The Public Procurement and Asset Disposal Regulations, 2020 – now in force, provide that foreign contractors executing mega projects set aside 50 per cent of jobs for locals.

Bidders in restricted tenders are currently required to reserve at least 75 per cent of employment opportunities in consultancy and non-consultancy services to locals.

The regulations enforced on July further provide that a contractor must prove at preliminary evaluation that not less than 20 per cent of management jobs will be reserved for Kenyan professionals.

The law says ministries, state departments and agencies must give exclusive preference to citizen contractors offering goods, services and works produced locally.

Procurement regulations define citizen contractors as firms wholly owned by Kenyans whereas local contractors are those with 51 per cent of Kenyan shareholding.

Citizen contractors can now bid for tenders of up to Sh1 billion for works, construction materials and other materials and Sh500 million in respect of goods and services.

The government has also barred state agencies from awarding tenders for hospitality, air travel and security services to foreign companies.