All tenders less than one billion shillings will henceforth be exclusive to local companies, should parliament give nod to the proposed Public Procurement and Asset Disposal (Amendment)Bill.
According to the government, the move is aimed at increasing opportunities for local firms in the public procurement sector while tightening regulations to curb unfair competition, particularly involving foreign companies.
“Any procurement of less than one billion shillings shall be awarded to a local firm. (6B) A foreign firm shall be eligible for procurement of contracts of more than one billion shillings where the foreign firm has entered into joint venture procurement with a local firm for not less than thirty percent of the value of the procurement,” read the Bill in part.
The Bill seeks to only allow foreign firms to participate in procurements valued over one billion shillings, but only if they form a joint venture with a local firm.
The foreign firm must commit to a minimum of 30% of the procurement value being allocated to the local partner.
The amendments also seek to address the issue of unfair competition by introducing tough penalties for those who attempt to bypass the regulations.
Individuals who register companies on behalf of foreign entities to unfairly access local procurement opportunities will face a fine of up to five million shillings, or a prison sentence of up to three years, or both.
Likewise, the bill will require that any procurement exceeding one billion shillings must specify the roles that local firms will play in the joint venture partnership, ensuring that the benefits of such contracts are shared with the local economy.
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