Proposed law seeks to protect contractors from arbitrary termination of state contracts
Among the provisions of the Bill is a stricter notice period, giving contractors a chance to respond before their contracts can be terminated.
A new Bill introduced in Parliament seeks to make it more difficult for government agencies to terminate contracts with suppliers and contractors to protect them from arbitrary decisions and ensure fairness in procurement processes.
The Public Procurement and Asset Disposal (Amendments) Bill, 2025, sponsored by Rongo MP Paul Abuor, comes in the wake of President William Ruto's recent threat to terminate contracts awarded to some contractors.
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The proposed changes to the Public Procurement and Asset Disposal law aim to redefine the relationship between government agencies and contractors, addressing concerns over unfair contract terminations.
Among the provisions of the Bill is a stricter notice period, giving contractors a chance to respond before their contracts can be terminated.
The Bill also proposes stiffer penalties for wrongful contract terminations, ensuring contractors are given a fair hearing.
According to Abuor, the current system often places contractors at a disadvantage, giving government agencies the upper hand when ending contracts.
Accountability and fairness
"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 states.
The Bill seeks to amend Sections 62 and 135 of the Public Procurement and Asset Disposal Act and introduces a new Section 196A.
This new section outlines clear guidelines for contract termination, including the requirement that government agencies provide written notices to contractors and allow them time to defend themselves.
If the termination does not follow these procedures, the contract will be deemed void and unenforceable.
Abuor argues that wrongful contract terminations have in the past cost the government millions of shillings in court settlements.
Natural justice
"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," he said.
If the Bill is passed, it will require the Solicitor General to confirm that contractors were properly notified and allowed to respond before any contract termination is final.
Without this confirmation, any termination would be considered legally invalid.
This move comes shortly after President Ruto's public remarks during his visits to Kisii and Kakamega counties, where he warned contractors who were delaying the implementation of key government projects.
The President stated that he would not hesitate to terminate contracts where contractors were not meeting their obligations.
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