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A new breed of legal support

New series on Tanzania government contracting

2019-09-21 11:02:31

By Paul Kibuuka

A businessman who specializes in the supply of goods and services for public bodies in Tanzania once said to me, “Being an entrepreneur is hard. You need to know how to manage a business and win government contracts that are out for bid”. To this, I would add government procurement laws, regulations, procedures and practices.

Especially for the uninitiated, there is a lot to learn because government contracts for construction projects or provision of goods or services with detailed specifications can be intricate. 

I believe that a more knowledgeable party to a government contract is a more successful party. Therefore, in this new article series on government contracting, I will outline some of the topics and key issues to be covered and also highlight the need that the series will address. 

But first, in its National Budget for the current financial year 2019/20, the government of Tanzania planned to spend Sh33.1 trillion ($14.3 billion). Government contractors can definitely get a slice of the pie if they can supply goods and services to the government of Tanzania. The period of most service contracts with the government is for no less than a year and typically three years.

In all respects, the government is the country’s biggest spender. If a private business qualifies for government contracts it may quickly grow if, among others, it can keep its cool, is realistic about its capabilities, and does its homework well. 

Some government projects and contracts are awarded by public bodies in mainland Tanzania through national and international competitive tendering. Under the Public Procurement Act 2011, there is a regulatory body established to oversee all public procurement activities carried out by all public bodies in mainland Tanzania.

That body is called the Public Procurement Regulatory Authority (PPRA) which, according to the PPRA website, ensures the application of fair, competitive, transparent, and non-discriminatory and value for money procurement standards and practices; and sets standards for the public procurement systems in the country and monitors compliance of procuring entities.

Motivated by our past article series on arbitration (with Mr. Frederick Werema, a retired judge and former Attorney General of Tanzania), private equity, corporate insolvency, intellectual property and Tanzania market entry, this latest series on government contracting comes at a time when, in many ways, claims and disputes in government contracts are becoming common.

The article series is designed to ignite debate amongst government contractors, public executives, legal practitioners, and leaders in academia and business. The series will be approached from the standpoint of Tanzanian law.

However, as Tanzania is no island on its own in this globalized and interdependent world, the series will also consider the international best practices from other common law countries such as the United Kingdom and India. Readers are encouraged to follow the series in The Citizen every Saturday, starting on 7 September 2019 to 16 November 2019.

Some of the relevant topics and key issues that will be considered include recent historical perspectives regarding government contracting in Tanzania; Tanzanian law regarding state immunity and its ramifications; how contract law treats the government of Tanzania as a contracting party; the main considerations to be taken into account when negotiating contracts with public bodies and the alteration of such contracts.

Other topics are restrictions on the liability of the government and issues for the government in securing and enforcing damage claims for breach of contract.

Furthermore, the series will cover breach of settlement agreements and the impact of a finality clause on such agreements; as well as, the execution of international arbitration awards against the Tanzanian State; drafting of government contracts for enhanced performance; and the key lessons that can be drawn from case law for government contract management and administration.

Contract claims and disputes against the government are presently a topical issue as governments all over the world are facing an increasing number of arbitration claims by foreign investors.

With the above list of topics and issues, it is hoped that the article series will successfully bring reflections and insights into the government contracting landscape and current trends and legislation in Tanzania.

Paul Kibuuka is the managing partner of Isidora & Company Advocates. Email: paul.kibuuka@isidoralaw.co.tz This article was first published in The Citizen on Saturday, 31 August 2019.

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