The Treasury has started a push to amend the Procurement Act in a bid to tighten the law amid growing cases of graft and conflict of interest that have clouded tendering in the public sector.
Treasury Cabinet Secretary John Mbadi invited public views on preferred changes to the Public Procurement and Asset Disposal Act, 2015— the law that guides how government entities procure goods and services and sell assets.
The move to effect changes comes at a time when the government is battling to contain the increasing number of cases of conflict of interest pitting State officials who secure tenders across the two levels of government.
The country is also faced with increased levels of non-compliance by government entities over the requirement to make public the winners of all public tenders and specifics of the contracts awarded.
“The Public Procurement and Asset Disposal Act 2015 came into effect in January 2016 and is now ripe for review to be in line with emerging issues, international best practices and address gaps and lessons learnt so far,” Mr Mbadi wrote in a notice.
He added that the looming changes are geared towards enhancing fairness, competitiveness, eradicating avenues of corruption, conflict of interest, and abuse of office in the public sector.
Kenyans had up to mid this month to weigh in with the changes that they would like to be included in the Act.
Amendments to the Public Procurement and Asset Disposal Act of 2015 could lead to enhancements of the sanctions for breach of the procurement laws or the introduction of new clauses to address emerging issues.
Kenya is currently faced with a growing number of public entities that continue to flout procurement laws and fail to disclose details of firms and individuals awarded lucrative tenders.
For example, latest disclosures show that 399,595 or 50.28 percent of the private firms on the Business Registration Service database were yet to comply with the requirement to submit a copy of their beneficial ownership register as of October 24.
The registry had 794,741 entities registered as private limited companies while the number of limited liability partnerships stood at 3,988.
Companies that fail to file beneficial ownership information for a period of five years risk being declared as not carrying on business and would be subsequently struck off from the register. The requirement for filing beneficial ownership information seeks to cover the risks of the entities being misused to facilitate criminal activity such as corruption, money laundering, financing of terrorism, and the proliferation of tax evasion.
Procuring entities including ministries and State departments are obligated to upload awarded contracts containing beneficial ownership information to the Public Procurement Information Portal.
Failure to comply with the requirement to disclose an entity’s beneficial ownership before the five-year ‘hard deadline’ attracts a penalty of Sh500,000 after the November 30, 2024 deadline while a further offence each day the failure continues attracts a fine up to Sh50,000.
Entities must also disclose changes to beneficial ownership information to the registrar within 14 days or face an administrative fine of Sh2,000.
