Companies that have been blacklisted by international organisations such as the World Bank will also be locked out of lucrative government tenders if proposed amendments to the law are approved.
The Public Procurement and Asset Disposal (Amendment) Bill 2024 seeks to prevent firms that have been debarred by global institutions recognised by Kenya from participating in State tenders.
“A person of a firm debarred by an international agency recognised by Kenya shall be deemed to have been debarred in Kenya as if the debarment procedures and proceedings were conducted in Kenya,” says the Bill presented to the National Assembly last week.
Government tenders are a big business in Kenya, with the World Bank estimates for 2020 indicating that the value of public procurement hit Sh3.146 trillion in that year.
These tenders are hotly pursued by local and international firms, with the contests among the bidders and procuring entities regularly spilling to the floor of courts or tribunals.
Tenders from international organisations such as the World Bank, the European Investment Bank, and the African Development Bank (AfDB) are also big business and are just as hotly contested.
These organisations fund multi-billion-shilling projects in Kenya annually. These projects are implemented in numerous sectors, including energy, agriculture, infrastructure, water and irrigation, education, and health.
The firms that are contracted to undertake such projects are forced to adhere to strict rules and are usually slapped with sanctions if found to have participated in malpractices and crimes such as coercion, collusion, corruption, fraud and obstructive practices.
The proposal comes just months after a report published by the AfDB showed that Kenya had the second-highest number of projects sanctioned by the lender for several breaches.
The pan-African bank showed that it had sanctioned 14 companies and four individuals involved in nine projects. Nigeria leads the list with 12 cases.
Some of the most recently debarred firms in Kenya by AfDB include Aerospace Aviation, Africa Development Professional Group, Beta Trading Company, Burhani Engineers Ltd and CP Power East Africa Limited.
AfDB said the offences in Kenya include the submission of falsified financial statements, the submission of forged performance bonds and advanced payment guarantees, forged contract award and project completion certificates and false contract references.
Should the Bill be passed, firms that have been found to have been involved in breaches face a debarment period of up to 10 years.
The Bill also proposes to lock out foreign firms from all government tenders with a value of less than Sh1 billion.
Further, foreign firms shall only be eligible to bid for contracts of more than Sh1 billion where they have entered into a joint venture procurement with a local firm for not less than 30 percent of the value of the deal.
“A foreigner who registers a company by misrepresenting himself or herself as being Kenyan exhibiting unfair competition and seeks to benefit from procurement under this section commits an offence and shall be liable, upon conviction, to a fine not exceeding five million shillings, or to a term of imprisonment not exceeding five years, or to both,” says the Bill.
