The Public Procurement and Asset Disposal (Amendment) Bill, 2024
Status Timeline
Proposed
Done ยท 17 Sep 2026
Public Review
Done
Debate
Active now
Executive
Pending
Final
Pending
KSh 1 Billion Threshold Reserved for Kenyan Firms
The Bill introduces Section 53(6A), which mandates that any public procurement with a value of less than KSh 1 billion must be awarded exclusively to a local firm (defined as a company wholly owned by Kenyan citizens).
Mandatory 30% Joint Ventures for Foreign Bidders
For public contracts valued above KSh 1 billion, foreign firms are only eligible to bid if they enter into a joint venture with a local firm. The local firm must be allocated at least 30% of the total value of the procurement.
Severe Fines for Proxy Company Registrations
To prevent foreigners from bypassing local reservation rules, the Bill establishes new offenses under Section 53. Kenyan citizens registering front companies on behalf of foreigners face fines up to KSh 5 million, up to 3 years in prison, or both. Foreigners misrepresenting their ownership face fines up to KSh 5 million, up to 5 years in prison, or both.
Hefty Fines and 10-Year Prison Sentences for General Offenses
Under the newly substituted Section 177, individuals convicted of procurement offenses without specific penalties face a fine up to KSh 1 million, a prison term of not less than 10 years, or both. They also face a mandatory additional fine of twice the amount of any benefit received or loss suffered. Corporations face fines up to KSh 10 million plus the double-value penalty.
Bill No.
National Assembly Bills No. 48 of 2024
Gazette No.
Supplement No. 194
Sponsor
Kuria Kimani
Background
The Public Procurement and Asset Disposal (Amendment) Bill, 2024 seeks to amend the Public Procurement and Asset Disposal Act (Cap. 412C). The primary objective of these amendments is to prioritize and protect local industries and citizen contractors in Kenya's public procurement system, establish clear local participation thresholds, and significantly elevate penalties for procurement-related offenses and non-compliance.
Key Amendments
- Updated Definitions: Section 2 of Cap. 412C is amended to include "virtual assets" under assets. It also defines "local firm" as a company wholly owned by Kenyan citizens and "foreign firm" as any business with more than 30% foreign shareholding.
- Board Composition: Section 10 is updated to introduce three members nominated through a fair process by the Institute of Certified Public Accountants of Kenya (ICPAK), the Kenya Institute of Supplies Management (KISM), and the Law Society of Kenya (LSK).
- Debarment Rules: Limits debarments under Section 41 to a maximum period of ten years and establishes that any individual or firm debarred by a recognized international agency is automatically deemed debarred in Kenya.
- Subcontracting Limits: Successful citizen contractors are prohibited under Section 86 from subcontracting to foreign companies unless the technical expertise, skill, or service is completely unavailable within the country.
New Obligations
- Exclusive Local Procurement: Section 53(6A) mandates that all public procurements valued below KSh 1 billion must be awarded exclusively to local firms.
- Joint Venture Thresholds: Foreign firms bidding for public contracts exceeding KSh 1 billion must enter into joint venture procurements with local firms, allocating at least 30% of the contract value to the Kenyan partner.
- Local Sourcing and Content: Section 157(9) requires foreign bidders in international tenders to source at least 40% of their supplies from citizen contractors. Furthermore, all procuring entities must source at least 40% of their total goods and services from local manufacturers or service providers.
- Prompt Payment: Section 139A requires procuring entities to make prompt and timely payments to contractors who satisfactorily complete their contractual obligations.
Penalties
- Proxy Registration Offense: Anyone registering a company on behalf of a foreigner to bypass local preference rules faces a fine of up to KSh 5 million, imprisonment for up to 3 years, or both. Foreigners misrepresenting themselves to exploit local preferences face up to 5 years imprisonment and/or a KSh 5 million fine.
- Substandard Submissions: Delivering or certifying incomplete, non-existent, or substandard works or services constitutes an offense under Section 176.
- General Penalties: Under Section 177, any person convicted of an offense where no specific penalty is provided is liable to a fine of up to KSh 1 million, imprisonment of not less than 10 years, or both. Additionally, they face a mandatory fine equal to twice the benefit received or loss suffered. Corporations face a fine of up to KSh 10 million in addition to the double-value mandatory fine.
Gazettement
The Bill was published in the Kenya Gazette.
First Reading
The Bill was read a First Time in the National Assembly.
Second Reading
The Bill was debated and passed Second Reading.
Committee of the Whole House
The Bill was considered clause-by-clause in the Committee of the Whole House.
Third Reading
The Bill passed Third Reading in the National Assembly.
Bi-cameral Consideration
The Bill was forwarded to the Senate for consideration.
Bi-cameral Consideration
The Senate passed the Bill without amendments.