Legislation prevents unjust termination of state contracts

 
If Parliament approves a proposed amendment, it could become harder to terminate contracts, as it aims to protect contractors and suppliers from the actions of overly aggressive government officials.
The bill that tries to redefine relationship between government and contractors, comes days after President William Ruto threatened to terminate tenders awarded to some contractors.
The changes proposed to the Public Procurement and Asset Disposal law makes it significantly difficult for government agencies to terminate tenders.
Among its provisions is stricter notice period, opportunity for suppliers to be heard as well as stiffer penalties for wrongful termination.
The amendments sponsored by Rongo MP Paul Abuor also seek to protect contractors and suppliers from incidences where procuring agencies arbitrarily terminate contracts.
The lawmaker said the current system gives upper hand to the procuring agencies when it comes to parting ways with the contractors and suppliers.
The Public Procurement and Asset Disposal (Amendments) Bill, 2025 seeks to change 62, 135 of the parent Act and inserting new Section 196A that gives guidelines on the termination process.
“The principal purpose of this Bill is to enhance the accountability and fairness in the termination of procurement contracts by requiring the Solicitor General to confirm that contractors or suppliers have been accorded due notice and fair processes prior to termination,” the Bill reads in part.
Abuor claims government incurs millions of shillings in settling court awards as a result of unprocedural termination of contracts.
“The proposed amendments seek to promote principles of natural justice, align with institutional requirements for fair administrative action and mitigate disputes arising from contract terminations.”
The proposal will now compel procuring entities to give a written notice to contractors and also allow them to respond to the notice before termination is recommended.
In the proposal, Solicitor General shall confirm in writing that the contractor was given a written notice and was given ample time to defend himself or herself.
“A termination of a procurement contract that does not comply with the requirements shall be deemed void and unenforceable,” the Bill states.