County Government Service Contract (Kenya)

A County Government Service Contract in Kenya sets out the rights, duties and consideration binding the parties to it.

The Public Procurement Regulatory Authority (PPRA), established under Section 9 of PPADA, oversees compliance with procurement law across both national and county government entities. Every county government must follow the procurement procedures prescribed in PPADA and its subsidiary regulations — the Public Procurement and Asset Disposal Regulations 2020 — when entering into service contracts. These procedures include open competitive tendering, restricted tendering, request for proposals, request for quotations, and direct procurement, each with defined monetary thresholds and approval requirements.

Under Section 45 of PPADA, a county government must advertise procurement opportunities in a manner that confirms fair competition and value for money. The contract is awarded to the bidder whose tender is most advantageous to the county, assessed on a combination of technical merit, price, and compliance with specifications. The evaluation is conducted by a tender evaluation committee appointed by the accounting officer of the county government — typically the Chief Officer of the relevant county department.

County government service contracts must comply with Section 68 of PPADA, which requires all public contracts to include provisions on: the scope of services; the contract price; the payment schedule; performance standards and evaluation criteria; variation procedures; dispute resolution; and termination rights. The Controller of Budget (COB), established under Article 228 of the Constitution of Kenya 2010, monitors county government expenditure and has authority to query payments under county contracts that deviate from approved budgets.

The Auditor-General, established under Article 229 of the Constitution of Kenya 2010, audits all county government accounts annually, including payments under service contracts. A service provider must maintain accurate records of all services delivered and invoices submitted, as these records may be examined during an audit. Misrepresentation of services delivered or invoicing for services not rendered is an offence under the Anti-Corruption and Economic Crimes Act No. 3 of 2003 administered by the Ethics and Anti-Corruption Commission (EACC).

County government service contracts involving foreign contractors must comply with the Kenya Citizens and Foreign Nationals Management Service Act and any applicable local content requirements under the county's procurement rules. VAT at 16% under the Value Added Tax Act No. 35 of 2013 applies to most contracted services unless specifically exempt. Withholding tax on service fees paid to non-residents is administered by the Kenya Revenue Authority (KRA) under the Income Tax Act (Cap. 470).

The legal framework governing the County Government Service Contract (Kenya) in Kenya draws on several key statutes and regulatory bodies. Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010. Parties executing a County Government Service Contract (Kenya) in Kenya should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Public Procurement and Asset Disposal Act No. 33 of 2015 sets the foundational requirements.

A County Government Service Contract in Kenya is required whenever a county government procures services from a private party using public funds, and several specific situations make a properly drafted written contract essential.

A County Government Service Contract is required when a county government engages a contractor for infrastructure maintenance, road repair, or cleaning services. Section 45 of the Public Procurement and Asset Disposal Act No. 33 of 2015 requires all such engagements above the prescribed threshold to be documented in a formal written contract, confirming accountability for public expenditure and enabling the Auditor-General to verify value for money.

The contract is needed when a county government procures professional services — including legal services from an Advocate of the High Court of Kenya, engineering consultancy from a firm registered with the Engineers Board of Kenya (EBK), or ICT services. Professional service contracts must specify deliverables, timelines, and quality standards because payments are typically milestone-based rather than based on time and materials.

A County Government Service Contract is required when a county health department or county education department engages a service provider for outsourced support services — for example, medical waste disposal, laboratory services, or school feeding programmes. These contracts must reference applicable national standards and the oversight role of the relevant national government ministry.

The contract is required when a county government enters into a public-private partnership (PPP) arrangement for service delivery under the Public Private Partnerships Act No. 15 of 2021, which is administered jointly by the PPP Directorate in the National Treasury and the county government. PPP service contracts require additional approval from the National Treasury and the PPP Committee.

A County Government Service Contract is needed when a private supplier wins a tender under the PPRA's Supplier Registration Portal (SRP) and the county's eProcurement system on the eCitizen platform. The written contract is the formal document that binds the awarded supplier and authorises the county to commit budgeted public funds for the contracted services.

A County Government Service Contract is essential when the county government requires a performance bond or bank guarantee from the contractor to secure satisfactory performance. Section 78 of PPADA permits procuring entities to require a performance security of up to 10% of the contract price, which is held and released upon satisfactory completion.

A County Government Service Contract in Kenya under the Public Procurement and Asset Disposal Act No. 33 of 2015 must contain the following essential provisions to be legally compliant and enforceable.

Parties and Procurement Reference: Full legal names of the county government (as constituted under the County Governments Act No. 17 of 2012), the county department, and the contractor. The contractor's BRS Registration Number, KRA PIN, and PPRA Supplier Registration number must be stated. The procurement reference number from the county's eProcurement system or tender register must appear on the contract.

Scope of Services: A precise description of the services to be provided — including technical specifications, service standards, output quantities, and geographical coverage within the county. Vague scope provisions are a leading cause of disputes in county government contracts reviewed by the PPRA and the Public Procurement Administrative Review Board (PPARB).

Contract Duration: The commencement date and completion date (or performance period), and any provisions for extension. Section 68(g) of PPADA requires all public contracts to state the period of performance. Framework contracts may have a maximum duration of three years under the Public Procurement and Asset Disposal Regulations 2020.

Contract Price and Payment Schedule: The total contract price in Kenya Shillings (KES), the basis of payment (lump sum, unit rates, or reimbursable costs), VAT treatment at 16% under the Value Added Tax Act No. 35 of 2013, and the payment schedule tied to milestones or monthly invoices. Payment terms must comply with the Government's approved payment cycle — most counties operate on a net-30-day payment period from invoice submission.

Performance Standards and Evaluation: Defined key performance indicators (KPIs), reporting obligations, and the procedure for county government inspection and acceptance of services. The accounting officer of the county department must certify satisfaction before payment is authorised under Section 94 of the Public Finance Management Act No. 18 of 2012 (PFMA).

Variation and Amendments: The procedure for varying the scope, price, or timeline — including written approval from the county accounting officer and, above specified thresholds, the county tender committee. Unilateral variations by the contractor without approval constitute a breach.

Termination: Grounds for termination by either party, including termination for convenience by the county government (with reasonable notice) and termination for default by the contractor (material breach, insolvency, or corruption). Section 68(j) of PPADA requires public contracts to include termination provisions.

Anti-Corruption and Ethical Conduct: A declaration that no inducement, bribe, or corrupt payment has been offered to any county official in connection with the contract, consistent with the Anti-Corruption and Economic Crimes Act No. 3 of 2003 and the Public Officer Ethics Act No. 4 of 2003 administered by the Ethics and Anti-Corruption Commission (EACC). Breach of this clause results in immediate contract termination and debarment from future PPRA procurement.

Dispute Resolution: Disputes arising from the contract shall first be referred to the Public Procurement Administrative Review Board (PPARB) for procurement-related disputes, or to mediation under the Nairobi Centre for International Arbitration (NCIA) rules for post-award performance disputes, before resorting to the High Court of Kenya under Article 165 of the Constitution. Forms-legal.com provides this County Government Service Contract template as a starting document for Kenya public procurement compliance.

Additional compliance elements for a County Government Service Contract (Kenya) used in Kenya include: Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010. Forms-legal.com provides this template as a starting point for Kenya-compliant documentation.