Public Procurement & Government Contracts 2021

Last Updated April 07, 2021

Uganda

Law and Practice

Author



Kyagaba & Otatiina Advocates (Dentons) is made up of a dynamic, passionate and committed team of six partners who have a combined experience of over 70 years in advising and representing some of the leading brands both in Uganda and across the globe. The team of professionals possess the talent, industry knowledge and legal expertise necessary to deliver solutions which are faster, better and more cost-effective in order to ensure client satisfaction at every level. The public procurement and government contracts practice group helps clients go through the complete tendering procedure, solve any risks that may occur, make use of legal remedies and perform the contract in accordance with any applicable rules. It also advises clients on public policy and regulation, infrastructure and PPPs.

Governing Law

The Public Procurement and Disposal of Public Assets Act, 2003 (as amended) (the “Act”) regulates procurement of government contracts in Uganda.

The Act, established to formulate policies and regulate practices in respect of public procurement and disposal activities, grants the line Minister authority to issue regulations, with approval from Public Procurement and Disposal of Public Assets Authority (the “Authority”) and Parliament for purposes of implementing the objectives of the Act.

Twelve regulations have so far been issued by the Minister, five of which directly regulate procurement of government contracts, namely:

  • the Public Procurement and Disposal of Public Assets (Contracts) Regulations, 2014;
  • the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2014;
  • the Public Procurement and Disposal of Public Assets (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, 2014;
  • the Public Procurement and Disposal of Public Assets (Procuring and Disposing Entities Regulations), 2014; and
  • the Public Procurement and Disposal of Public Assets (Procurement of Medicines and Medical Supplies) Regulations, 2014.

Entities subject to procurement regulation are Procurement and Disposing Entities (PDEs). They include:

  • a Ministry or department of government;
  • a district council or a municipal council;
  • a body corporate established under an Act of Parliament other than the Companies Act;
  • a company registered under the Companies Act in which government or a PDE:
    1. controls the composition of the board of directors of the company;
    2. is entitled to cast, or controls the casting of more than fifty percent of the maximum number of votes that may be cast at a general meeting of the company; or
    3. controls more than fifty percent of the issued share capital of the company, excluding any part of the issued share capital that does not carry a right to participate beyond a specified amount in the distribution of profits or capital;
  • a commission established under the Constitution or under an Act of Parliament;
  • a public university and a public tertiary institution established under the Universities and other Tertiary Institutions Act, 2001;
  • the Bank of Uganda except in exercise of the functions specified in Section 4 of the Bank of Uganda Act; and
  • any other procuring and disposing entity as may be prescribed by the Minister.

The types of contracts subject to procurement regulation include:

  • contracts for the procurement of consultancy services;
  • contracts for the procurement of medicines and medical supplies; and
  • contracts for the procurement of works, supplies and non-consultancy services.

PDEs may adopt different methods of procurement. These include:

  • open domestic bidding;
  • restricted domestic bidding;
  • open international bidding;
  • restricted international bidding;
  • micro procurement;
  • direct procurement; and
  • quotation method of procurement.

The above listed methods of procurement specify the parties from whom bids or expressions of interest are welcome.

The key obligations on which all public procurement is grounded include:

  • non-discrimination;
  • transparency, accountability and fairness;
  • maximisation of competition and ensuring value for money;
  • confidentiality;
  • economy and efficiency; and
  • promotion of ethics.

Advertisement is one of the modes of inviting bidders to participate in a procurement process. The form of the advertisement is categorised into two, dependent on the nature of contract and procurement requirement, that is:

  • works, supplies and non-consultancy services; and
  • consultancy services.

Advertisement for Works, Supplies and Non-consultancy Services

Advertisement for these contracts is through publishing bid notices. A bid notice must be displayed on the website of the Authority and the notice board of the PDE, not later than the date of publication of the bid notice and must be displayed until the deadline for submission of bids.

The bid notice must also be published in at least one newspaper of wide circulation.

The information contained in the bid notice includes, but is not limited to:

  • the name, address and contact details of the PDE;
  • a summary of the scope of the assignment and a brief description of the required works, supplies and non-consultancy services;
  • a statement of any eligibility and qualification requirements;
  • the criteria to be used to evaluate the bids;
  • details of the information required in the bids including any information or documentation required to verify the eligibility or qualifications of a provider;
  • instructions on the location for submission of the bids and the deadline for submission; and
  • instructions on the sealing and labelling of the bids.

Advertisement for Consultancy Services

Advertisements for procurement for consultancy services is through publication of a notice inviting expressions of interest. The notice inviting expressions of interest is published in at least one newspaper of wide circulation in Uganda and where a PDE requires to obtain effective competition, the notice inviting expressions of interest shall also be published in the relevant trade or professional publication.

The information contained in a notice of expression of interest includes:

  • the name, address and contact details of the PDE;
  • a summary of the scope of the assignment and a brief description of the required consultancy services;
  • a statement of any eligibility and qualification requirements;
  • the criteria to be used to evaluate the expressions of interest;
  • details of the information required in the expression of interest, including any information or documentation required to verify the eligibility or qualifications of a consultant;
  • instructions on the location for submission of expressions of interest and the deadline for submission; and
  • instructions on the sealing and labelling of expressions of interest.

Other modes of advertisement of contract award procedures include direct invitation, undergoing a pre-qualification exercise and development of a shortlist of providers.

Every PDE has an accounting officer, whose overall responsibility is to execute the procurement and disposal process in a PDE. The accounting officer of a PDE has authority to conduct a market assessment of the price of a procurement item, which may include works, supplies and non-consultancy services and consultancy services.

When conducting the market assessment for works, supplies and non-consultancy services, an accounting officer may take into account the following:

  • prices obtained on previous similar bids or contracts, taking into account any difference in the quantities purchased;
  • prices published or advised by potential providers; and
  • a build-up of estimates of prices of components of the works, non-consultancy services or supplies.

When conducting a market assessment for consultancy services, an Accounting Officer may take into account the following:

  • prices obtained on previous similar services; and
  • prices advised by potential consultants.

PDEs are required to follow prescribed procedures/methods in a procurement and disposal process. The choice of procurement method is determined by the estimated value of the requirement, the circumstances relating to the requirement and the type of procurement, whether supplies, works, consultancy or non-consultancy services. The methods of procurement that may be used to award a contract include:

Open Domestic Bidding

Open domestic bidding is a procurement method, which is open to participation on equal terms by all providers, through advertisement of the procurement opportunity. Unless provided otherwise, PDEs are required to adopt this method of procurement and disposal. Open domestic bidding is used to obtain maximum possible competition and value for money, and is open to foreign or international bidders.

Restricted Domestic Bidding

This is where bids are obtained by direct invitation without open advertisement of the procurement opportunity. It is used to obtain competition and value for money to the extent possible, where the value or circumstances do not justify or permit the open bidding procedure.

Open International Bidding

This is a procurement method which is open to participation on equal terms by all providers, through advertisement of the procurement opportunity and which specifically seeks to attract foreign providers. This mode of procurement is used to obtain the maximum possible competition and value for money, where national providers may not necessarily make this achievable.

Restricted International Bidding

This is a procurement method, which involves bids being obtained by direct invitation without open advertisement, and the invited bidders include foreign providers. It is used to obtain competition and value for money to the extent possible where the value or circumstances do not justify or permit an open bidding method and the short listed bidders include foreign providers.

Micro Procurement

This procurement method is used for very low value procurement requirements. It is used to achieve efficient and timely procurement where the value does not justify a competitive procedure. The current threshold for micro procurement is the UGX5 million equivalent to USD1,365.

Direct Procurement

Direct procurement is a sole source procurement method for procurement requirements where exceptional circumstances prevent the use of competition. It is used to achieve efficient and timely procurement, where the circumstances do not permit a competitive method.

Quotation Method of Procurement.

The quotation method is a simplified procurement method which compares price quotations obtained from a number of providers. The quotation method is used to obtain competition and value for money to the extent possible, where the value or circumstances do not justify or permit open or restricted bidding procedures.

Negotiations during the Procurement and Disposal process

Negotiations are not permitted between PDEs and a contractor, in respect of a proposal of the contractor, except where:

  • the competitive procurement method was used and only one bid was received in response to the call for bids;
  • the direct procurement method was used; or
  • the procurement is for consultancy services.

Negotiations under the above are only carried out where the best evaluated bid or proposal exceeds the budget of the PDE.

Whereas there exists more than one tender procedure, the choice of procedure is not at the sole discretion of the PDE, but is dependent on the circumstances surrounding the procurement and the value of the procurement.

There are thresholds that determine the method of procurement to be used by a PDE. The applicable thresholds are highlighted below.

Supplies and Non-Consultancy Services

  • Open bidding (domestic and international) is used for procurements whose value is higher than UGX200 million, equivalent to USD54,600;
  • restricted bidding (domestic and international) is used for procurements whose value is equal to or higher that the UGX100 million, equivalent to of USD27,300, but does not exceed UGX200 million, equivalent to USD54,600;
  • request for Quotations is used for procurements whose value is equal to or more than the UGX5 million, equivalent to USD1,365 but does not exceed UGX100 million equivalent to of USD27,300; and
  • micro procurement is used for procurements whose value is less than UGX5 million, equivalent to USD1,365.

Works

  • Open bidding (domestic and international) is used for procurement whose value is higher than UGX500 million, equivalent to USD136,600;
  • restricted bidding (domestic and international) is used for procurement whose value is equal to or higher than UGX200 million equivalent to USD54,600 but does not exceed UGX500 million, equivalent to USD136,600;
  • request for quotations is used for procurement whose value is equal to or more than UGX10 million (USD2,730) but does not exceed UGX200 million (USD54,600); and
  • micro procurement is used for procurement whose value is less than UGX10 million (equivalent to USD2,730).

Consultancy Services

  • Request for proposals with expression of interest: procurements the value of which is equal to or higher than UGX200 million, equivalent to USD54,600; and
  • request for proposals without expression of interest: procurements the value of which is equal to UGX50 million, equivalent to USD13,660, but which does not exceed UGX200 million), equivalent to USD54,600.

Medicine and Medical Supplies

Special thresholds apply for medicine and medical supplies.

  • Open bidding is the default method for procurements of medicines and medical supplies. It may be used irrespective of the value of the procurement; on condition that National Drug Authority (NDA) registers the providers except in cases where NDA has not registered any provider for a specific requirement;
  • restricted bidding is used for procurements whose value is not more than UGX2 billion, equivalent to USD546,450, if the entity procuring is national medical stores and for procurements whose value is not more UGX500 million (USD136,600) for any other PDE. It is a requirement that at least five bidders must be invited;
  • the request for quotations method is use for procurements whose value is not more than UGX1 billion (USD273,225) if the entity procuring is national medical stores and for procurement, whose value is not more than UGX100 million (USD136,600) for any other PDE. It is a requirement that at least three quotations must be considered;
  • micro procurement is used for procurement whose value is not more than UGX100 million (USD136,600), if the entity procuring is National Medical Stores and for procurement, whose value is not more UGX5 million, (USD1,365) for any other PDE. It is a requirement that at least three quotations must be considered;
  • direct procurement is used where the supplies are available from a single provider.

The Act does not impose timing for publication of documents except for those in 2.6 Time Limits for Receipt of Expressions of Interest or Submission of Tenders and 3.4 Requirement for a "Standstill Period".

The Act provides for minimum periods for submission of expressions of interest for consultancy services or submission of bids for works, supplies and non-consultancy services.

Minimum Periods for Submission of Expressions of Interest

The minimum periods of submission of expressions of interest are ten working days where the notice is only published in Uganda, and15 working days where the notice is published internationally.

The period for expressions of interest starts on the date the notice is first published and ends on the deadline for submission of expressions of interest.

The period for submission of expressions of interest is determined by taking the following factors into consideration:

  • the level of detail required in the expression of interest;
  • whether the consultants are required to submit authenticated legal documents or similar documents as part of the proposals and the time required to obtain the documents; and
  • the location of the consultants and the time required to deliver the expression of interest to the procuring and disposing entity.

Minimum Periods for Submission of Bids

The minimum bidding periods in respect of each procurement method are:

  • for the open domestic bidding method, 20 working days;
  • for the open international bidding method, 30 working days;
  • for the restricted domestic bidding method, 12 working days;
  • for the restricted international bidding method, 20 working days; and
  • for the quotations method, five working days.

Direct Procurement

This method of procurement does not have a minimum bidding period. The period of bidding is determined by taking the following factors into consideration:

  • the time required for the potential bidders to obtain the bidding documents from the PDE;
  • the time required for the preparation of bids, taking into account the level of detail required and the complexity of the bidding;
  • the need for bidders to submit authenticated legal documents or similar documents as part of the bids and the time required to obtain the documents;
  • the location of shortlisted or potential bidders and the time required for obtaining bidding documents and for the delivery and submission of bids to the procuring and disposing entity;
  • the anticipated duration of the procurement process; and
  • the minimum bidding period.

PDEs require all bidders participating in public procurement or disposal to meet the qualification criteria set out in the bidding documents, which in all cases shall include the following basic qualifications:

  • that the bidder has the legal capacity to enter into the contract;
  • that the bidder is not:
    1. insolvent;
    2. in receivership;
    3. bankrupt; or
    4. being wound up;
  • that the bidder’s business activities have not been suspended;
  • that the bidder is not the subject of legal proceedings for any of the circumstances mentioned in bullet point two, above; and
  • that the bidder has fulfilled his or her obligations to pay taxes and social security contributions.

Pre-qualification for Non-Consultancy Services

The Act permits pre-qualification under open domestic and open international bidding to obtain a shortlist of bidders in the procurement of works, supplies and non-consultancy services.

Pre-qualification is used in circumstances where:

  • the non-consultancy services or supplies are highly complex, specialised or require detailed design or methodology;
  • the costs of preparing a detailed bid would discourage competition;
  • the evaluation is particularly detailed and the evaluation of a large number of bids would require excessive time and resources from a procuring and disposing entity; or
  • the bidding is for a group of similar contracts, for the purposes of facilitating the preparation of a shortlist.

The criteria for evaluation for pre-qualification includes:

  • experience in executing similar contracts;
  • performance on similar contracts;
  • capabilities with respect to equipment and manufacturing facilities;
  • the qualifications and experience of the personnel of the bidder;
  • financial capability of the bidder to perform the proposed contract;
  • facilities or representation at or near the location for performance of the contract;
  • the available capacity to undertake the assignment; and
  • any other relevant criteria.

Note: the Act does not provide for a minimum number of bidders that may be pre-qualified.

Pre-qualification for Consultancy Services

A PDE may elect to shortlist consultants under the following circumstances:

  • the consultancy service can only be provided by a limited number of consultants, in this case not more than six consultants;
  • the value of the procurement is lower than the value prescribed for publication of notice inviting expression of interest; or
  • there is an emergency situation.

The evaluation criteria PDEs must take into account in preparing a shortlist of consultants includes the following:

  • the consultant has the legal capacity to enter into a contract with the procuring and disposing entity;
  • the consultant is not insolvent, in receivership, bankrupt or being wound up;
  • the business activities of the consultant are not suspended;
  • the consultant is not the subject of legal proceedings for any of the circumstances mentioned in the second bullet point;
  • the consultant fulfilled the obligations to pay taxes and social security contributions in Uganda;
  • the consultant does not have a conflict of interest in relation to the subject of the procurement;
  • the consultant is not suspended by the Authority; and
  • the consultant is:
    1. not a member of the Contracts Committee or of the evaluation committee;
    2. not an employee of the procuring and disposal entity or a member of the Board of Survey;
    3. not a person appointed to politically or administratively control the procuring and disposing entity, including a Minister, the accounting officer or a member of the governing body of the procuring and disposing entity; and
    4. not a company, where a persons specified herein have a controlling interest.

Where the consultant is a firm, company, corporation, organisation or partnership, the consultant is required to submit the following documents, with the application to be pre-qualified:

  • a copy of the trading licence of the consultant or its equivalent;
  • a copy of the certificate of registration of the consultant or its equivalent;
  • a signed statement indicating that the consultant does not have a conflict of interest in the subject of the procurement; and
  • any other relevant documents or statements as may be stated in the pre-qualification documents.

Evaluation Criteria during the Procurement and Disposal Process

The choice of an evaluation methodology is determined by the type, value and complexity of the procurement or disposal.

All evaluations are conducted by an evaluation committee who report to the Procurement and Disposal Unit (PDU).  A PDE is mandated to establish a PDU whose function among others is to manage all procurement or disposal activities of the PDE except adjudication and the award of contracts.

The evaluation of bids by interested parties is conducted during meetings of the evaluation committee.

Evaluation of Bids for Procurement of Works, Supplies and Non-consultancy Services

Bids for the procurement of works, supplies and non-consultancy services are evaluated using the technical compliance method.

The evaluation criteria assesses the following:

  • the compliance of the bid with the statement of requirements;
  • the ability of the bidder to perform the proposed contract; and
  • the ability of the bid to meet the objectives of the procurement.

The PDE is required to state the evaluation criteria used which must not be amended during the procurement process.

Evaluation of Proposals for Consultancy Services

Proposals for consultancy services are considered using the following methods:

  • the quality and cost based selection method;
  • the quality based selection method;
  • the fixed budget selection method;
  • the least cost selection method; or
  • consultants qualifications selection method.

The quality and cost based selection method is used for highly specialised assignments, where it is difficult to develop precise terms of reference or the required input and for which a procuring and disposing entity expects consultants to demonstrate innovation in the proposal; assignments that have a high downstream impact and in which, the objective is to have the best consultants; and (assignments that can be carried out in several different ways, where a proposal is therefore not comparable and where the value of the consultancy services depends on the quality of the proposals submitted.

The fixed budget selection method is used where an assignment is simple, can be precisely defined, and where the budget is fixed.

The least cost based selection method is used where the required consultancy service is of a standard or routine nature and where well established practices and standards exist.

The consultant qualifications selection method shall be used for consultancy services of a value as may be prescribed by the Authority.

A PDE is required to disclose the evaluation criteria in the notice of expression of interest.

PDEs are required to disclose the evaluation and qualification criteria. This disclosure is contained in the solicitation/bidding documents issued by the PDE. The bidding documents are issued to interested parties upon the publication of a bid notice in the course of a procurement process.

There is no obligation to notify parties who have not been selected of the reasons for their non-selection in the procurement process.

A PDE is required to notify bidders of a contract award decision. This must be done within five working days of the decision to award to the contract.

Notification of the award decision by the PDE is done by:

  • delivering a copy of the notice of best evaluated bidder to all bidders who participated in the bidding process;
  • displaying a notice of best evaluated bidder on the notice board of the PDE; and
  • sending a copy of the notice of best evaluated bidder to the Authority for publication on its website.

During a procurement and disposal process, a PDE is required to not take any action for a period of ten days from the date of the display of the notice of the best-evaluated bidder.

However, this standstill period does not apply to micro and direct procurement and all procurement in emergencies, irrespective of the procurement method used.

Review of Decisions Made by a PDE after a Procurement and Disposal Process

A bidder may seek administrative review of any omission or breach by a PDE or any regulations or guidelines made under the Act or of the provisions of the bidding documents including best practices.

A PDE is required to provide a bidder seeking administrative review with:

  • a summary of the evaluation process;
  • a comparison of the tenders, proposals or quotations, including the    evaluation criteria used; and
  • reasons for rejecting the concerned bids.

The following bodies are responsible for the review of decisions of awarding authorities:

Review by the Accounting Officer

A bidder aggrieved by the decision of a PDE may make a complaint to the Accounting Officer of the PDE. The complaint must be made in writing, within ten working days from the date the bidder first becomes aware or ought to have become aware of the circumstances giving rise to the complaint. The Accounting Officer is required to make a decision in writing, within 15 working days, indicating the corrective measures to be taken, if any, and giving reasons for his or her decisions and submit a copy of the decision to the Public Procurement and Disposal of Public Assets Authority (the “Authority”).

If the Accounting Officer does not make a decision within the prescribed 15 working days, or the bidder is not satisfied with the decision of the Accounting Officer, the bidder may make a complaint to the Authority within ten working days from the date of communication of the decision by the Accounting Officer. 

Review by the Authority

Upon receipt of a complaint, the Authority shall promptly give notice of the complaint to the respective PDE, suspending any further action by the PDE until the Authority has settled the matter. The Authority is required to issue its decision within 21 working days after receiving the complaint, stating the reasons for its decision and remedies granted, if any.

A bidder who is not satisfied with the decision of the Authority may appeal against the decision to the Public Procurement and Disposal of Public Assets Appeals Tribunal (the “Tribunal”)

Review by the Tribunal

A bidder aggrieved by a decision of the Authority may make an application to the Tribunal for review of the decision of the Authority. party not satisfied by a decision of the Authority may appeal to the Tribunal. An application to the Tribunal must be in writing in a prescribed form, include a statement of the reasons for the application and be lodged with the Tribunal within ten working days of being served by the Authority with its decision.

A party to the proceedings before the Tribunal who is aggrieved by the decisions of the Tribunal, may within 30 days after being notified of the decision of the Tribunal or within such further time as the High Court may allow, lodge a notice of appeal with the registrar of the High Court.

Review by the High Court

Where an application for review of a decision of the Tribunal is lodged with the High Court, it may make an order staying or otherwise affecting the operation or implementation of the decision, as the High Court considers appropriate for securing the effectiveness of the proceedings and for determining the application or appeal.

The following remedies are available for breach of procurement legislation:

  • termination of a procurement process;
  • cancellation of a contract that has been awarded under an impugned procurement process;
  • orders of compensation to an aggrieved party affected by an unlawful act in the procurement process; and
  • orders to a PDE to do or redo anything in the procurement process.

During an administrative review process, the awarding authorities may grant the following interim measures:

  • suspension of the procurement process;
  • a PDE cannot enter into a contract during the process of administrative review;
  • prohibition of any further action by the PDE until settlement of the matter; and
  • annulment in whole or part, an unlawful act or decision made by the PDE.

The following persons have standing to challenge the awarding authority’s decisions:

  • a bidder in the procurement process – the bidder may also appoint a person to represent them in the administrative review process;
  • a person adversely affected by a decision of the Authority may lodge a complaint with the Tribunal; and
  • a PDE may challenge a decision of the Authority before the Tribunal.

The following time limits apply in the course of challenging a decision of a PDE:

  • a complaint to an Accounting Officer of a PDE must be made within ten working days from date at which the circumstances giving rise to the complaint arise;
  • an appeal from the decision of an Accounting Officer of a PDE to the Authority must be made within ten working days from the date of communication of the decision of the Accounting Officer;
  • an appeal from the decision of the Authority to the Tribunal must be made within ten working days of being served with the decision of the Authority; and
  • an appeal from the Tribunal to the High Court must be made within 30 days from the date of notification of the decision of the Tribunal.

Length of Proceedings of an Accounting Officer

An accounting officer, to whom a complaint arising from a procurement process is referred, is required to make a decision within 15 working days and submit a copy of the decision to the Authority.

Length of Proceedings of the Authority

  • The Authority is required to review the decision of the accounting officer and provide recommendations to the PDE within 15 working days; and
  • where a party appeals to the Authority, a decision must be made and communicated with 21 working days.

Note: the Act does not provide for the length of proceedings before the Tribunal and the High Court.

Copies of annual reports regarding the number of procurement claims considered by the review bodies are not readily available to the general public.

The costs payable for challenging an award before an Accounting Officer and the Authority are pegged to the value of the procurement or disposal in issue.

The costs payable at lodgement of a complaint before an Accounting Officer and the Authority:

  • UGX500,000 (USD136) for procurements or disposals of a value of up to UGX100 million (USD27,300);
  • UGX1.5 million (USD408) for procurement or disposal of a value of more than UGX100 million (USD27,300) up to UGX500 million (USD136,000);
  • UGX2,500,000 (USD680) for procurement or disposal of a value of more than UGX500 million (USD136,000) up to UGX1 billion (USD273,000);
  • UGX5 million (USD1,360) for procurement or disposal of a value of more than UGX1 billion (USD273,000) up to UGX50 billion (USD13.6 million);
  • UGX10 million (USD2,730) for procurement or disposal of a value of more than UGX50 billion (USD13.6 million) up to UGX100 billion (USD27.3 million); and
  • UGX15 million (USD4,080) for procurement or disposal of a value of more than UGX100 billion (USD27.3 million).

Note: where a complaint is upheld by an Accounting Officer or the Authority, the fees are refundable. Where a complaint is dismissed or withdrawn, the fees are non-refundable

Costs before the Tribunal

A further appeal made to the Tribunal costs UGX300,000 (USD82).

Modification of contracts following their award is permissible in the following circumstances:

Change Orders

A PDE may issue a change order to the provider, requiring the provider to make changes to the general scope of the contracts and in particular, with respect to:

  • the drawings, designs, or specifications;
  • the method of shipment or packing;
  • the place of delivery;
  • time of performance or duration of the contract; or
  • the related services to be provided by the provider.

The change order must not be one that increases the cost of the contract beyond 0.1% in the case of a single change or 1% in the case of cumulative change orders, of the original contract price.

Amendment of a Contract

Where a change in the contract increases the price of the original contract beyond 0.1% in the case of a single change or 1% cumulatively, such a change is effected by amending the contract.

A single contract amendment must not increase the total contract price by more than 15% of the original contract price.

Where a contract is amended more than once, the cumulative value of all contract amendments must not increase the total contract price by more than 25% of the original contract price.

The Act permits direct procurement, as a sole source procurement method where exceptional circumstances prevent the use of competition.

Direct procurement as a method of procurement is used in the following circumstances:

  • there is insufficient time for any other procedure such as in an emergency situation;
  • the works, services or supplies are available from only one provider;
  • an existing contract could be extended for additional works, services or supplies of a similar nature and no advantage could be obtained by further competition, if the prices on the extended contract are reasonable;
  • additional works, services or supplies are required to be compatible with existing supplies, works or services and it is advantageous or necessary to purchase the additional works, services or supplies from the original supplier, provided the prices on the additional contract are reasonable; or
  • it is essential or preferable to purchase additional works, services or supplies from the original supplier to ensure continuity for downstream work, including continuity in technical approach, use of experience acquired or continued professional liability, if the prices on the additional contract are reasonable.

Note: The circumstances in the last three bullet points apply where the value of the new works, services or supplies does not exceed 15% of the value of the original or existing contract, and the original or existing contract is awarded through a competitive process.

Direct Procurement

Where direct procurement is used more than once in the circumstances specified in the second bullet point above, the cumulative value of all new works, services or supplies shall not exceed twenty five percent of the value of the original or existing contract.

For the purposes of direct procurement, an emergency situation is defined to mean:

  • a situation where a circumstance which is urgent or unforeseeable or a situation which is not caused by dilatory conduct where Uganda is seriously threatened by or actually confronted with a disaster, catastrophe, war or an act of God; 
  • life or the quality of life or environment may be seriously compromised;
  • the conditions or quality of goods, equipment, buildings or publicly owned capital goods may seriously deteriorate unless action is urgently and necessarily taken to maintain them in their actual value or usefulness;
  • an investment project is seriously delayed for want of minor items; or
  • a government programme would be delayed or seriously compromised unless a procurement is undertaken within the required time frame.

Walukuba Transporters Co-operative Society V Jinja Municipal Council and Others (Consolidated Miscellaneous Cause 47/2017) Delivered by the High Court on 8 May 2020

Background

The Applicants sought, by way of judicial review, to set aside the decision of the Respondent PDE, when it awarded a contract for revenue collection to another entity other than the Applicant. The Applicant had a running contract with the PDE, slated to end on 31 October 2017. On 10 May 2017, the Respondent PDE advertised a call for bids for the 2017-18 contract period, conducted the procurement process and the revenue collection contract awarded to another entity, which would take effect after 31 October 2017, when the Applicant's contract was to expire.

The Applicant filed a complaint with the Respondent, alleging that the advert and subsequent award of the contract to another entity was breach of contract.

Decision of Court

The Court held that a claim of breach of contract lies in the realm of private law and public law. As such, the Applicant's claim was not amenable to judicial review as there were remedies under private law.

The Court also held, upon an analysis of the facts, that the advert and invitation of bids for the 2017-18 contract period was not a breach of contract and did not in any way flout any procurement laws.

The Court consequently dismissed the Applicant's claim.

There are no legislative amendments currently being considered.

Kyagaba & Otatiina Advocates (Dentons)

3rd Floor, UEDCL Towers
Plot 37 Nakasero Road
P.O. Box 24790
Kampala

+256 206 300 958

doris.akol@dentons.com www.dentons.com/en
Author Business Card

Law and Practice

Author



Kyagaba & Otatiina Advocates (Dentons) is made up of a dynamic, passionate and committed team of six partners who have a combined experience of over 70 years in advising and representing some of the leading brands both in Uganda and across the globe. The team of professionals possess the talent, industry knowledge and legal expertise necessary to deliver solutions which are faster, better and more cost-effective in order to ensure client satisfaction at every level. The public procurement and government contracts practice group helps clients go through the complete tendering procedure, solve any risks that may occur, make use of legal remedies and perform the contract in accordance with any applicable rules. It also advises clients on public policy and regulation, infrastructure and PPPs.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.