Tender season! It comes around every year and every time it does, our local newspapers and websites are awash with tender invitations placed by various government ministries or agencies across the country for the supply of goods and services or for the conduct of building and civil works. Numerous Kenyan businesses, from various industries, scan the dailies and reload website pages almost religiously with a view to tracking such advertisements. The businesses identify the invitations to tender falling within their field of expertise and submit their bids. Putting those bids together is often time consuming and cost intensive especially for large construction projects where the business entity is required to offer tender security, guarantees, informed technical proposals and detailed financial proposals.
The excitement is almost palpable when the relevant government ministry or agency evaluates the submitted bids and awards the tender to the successful business entity. The letter of award is quickly accepted by the successful tenderer, and the parties then prepare and sign the necessary contract documents spelling out, among other terms, the obligations of the parties. Some of these obligations are usually standard. One of these would be that the successful tenderer is expected to supply the goods and services or conduct the building and civil works in a satisfactory manner. On the other hand, the government ministry or agency commits to settle payments in a timely fashion.
For the successful business entity, the tender might often be its guaranteed source of income, its super profit machine or its business deal of the decade in light of the perceived financial stability of government ministries or agencies.
That is, until the government ministry or agency in question defaults in making scheduled payments despite the satisfactory performance of the business entity’s obligations, the ministry’s or agency’s officials remain non-responsive to the business entity’s constant emails, letters and telephone calls. It then becomes necessary to evaluate the available options for recovery or recourse.
What are the legal remedies available to the business entity for breach of contract by a government ministry or agency? What is the manner in which these remedies would be enforced? Continue reading “Breach of Contract by the Government: Available Measures in Law for Businesses”