The new law will factor in local companies to compete with big companies in bidding for tenders. This law will help Small and Medium Enterprises(SMEs) to expand their businesses as the lwa requires that all foreign companies which secure government tenders to source not less 40% of their supplies from local contractors.
Traditionally, multinational companies were required to sorce atleast 30% of their supplies from local markets. This move will enable the government for instance to reduce the cost of construction projects from companies charging the gorvement high prices, which are above the market cap.
According to the new law, successful government tenders price shall lay with a range of 15% of the Engineers Estimate where applicable. For purposes of protecting the new law, the national and the county government are entitled with the responsibility to offer payment guarantees upon awarding tenders to multinational and local markets.
This also means that the goverment will award split tenders to different binders, thus allowing more companies to benefit.