Local companies are eyeing a bigger cut in government business following a promise by the newly-elected team to review the procurement law in its first 100 days in office.

In their first meeting with private sector executives, President-elect Uhuru Kenyatta and his deputy, William Ruto,

last week pledged to sweep aside bottlenecks in tendering for public projects, which have for long denied private entities a chance to transact with the government.

The two leaders, whose victory at the March 4 elections is being challenged in the Supreme Court, told members of the Kenya Private Sector Alliance (Kepsa) that a task force would be formed immediately they assume office with a view to overhauling the current complex public procurement system.

“We need a system that is transparent and allows us to transact and conduct business fast. It is also important to ensure that reforms in public procurement incorporate use of technology,” said Mr Kenyatta.

He noted that the country has lost billions of shillings in investment in the past owing to tedious rules and procedures which scare away entrepreneurs and lower the country’s competitiveness in the global arena.

The review is intended to make it easier for local private companies, big or small, to engage in business with the government, unlike in the past where tough qualification procedures have locked them out.

A report released by the Ministry of Information and Communication last month noted that complicated and prolonged procurement in government have denied local ICT companies opportunities that would otherwise spur their growth.

“Business engagement with the government is a major problem area owing to protracted procurement cycles. The prolonged procurement cycles and cyclic spending with government is somewhat frustrating and these need to be addressed in order to deliver value on both the demand and supply sides,” the report, prepared by the International Data Corporation (IDC), says.

Admitting that the current complex nature of government procurement rules have locked out local companies, especially when it comes to bidding for big public tenders, Information and Communication permanent secretary Bitange Ndemo said the process needs to be changed to encourage growth.

“One of the main improvement areas must revolve around the procurement process and creation of more local jobs in the sector. We should align the systems to ease procurement procedures, but this will depend on the goodwill of the concerned government organisations,” said Dr Ndemo.

A 2013 World Bank survey on the ease of doing business cited lengthy procedures for starting a business, weak enforcement of contracts, and slow registration of property as key obstacles to entrepreneurship in Kenya, especially in Nairobi.

Poorly enforced procurement rules

In the past few years, a number of prominent government officials have been thrown into the limelight over accusations of failing to enforce procurement rules in certain projects, the most recent row being the purchase of police communication equipment, which spilled over to the courts.

Officials from the Kenya National Bureau of Statistics, the National Oil Corporation of Kenya, the Ministry of Information and Communication, and the Independent Electoral and Boundaries Commission have had questions to answer, too.

While all have blamed bureaucracy for their woes, the Public Procurement Oversight Authority maintains that the complex nature is meant to curb corruption and inefficiency, noting that the flaws are largely a result of poor planning.

The laborious procurement laws were blamed for the non-use of over Sh101 billion allocated to various ministries in the 2010/11 financial year.

In an interview with Smart Company, Mr Kipkurui Lang’at, managing director of the State-owned milk processor, New KCC, said long procurement procedures puts many government organisations at a disadvantage in competition.

“It is hard when you are competing for the same market with the private sector but even simple decisions like changing the colour of your packaging material take months before they can be implemented,” he said.