Government procurement legislation gives preference to firms majority-owned by Tanzanian citizens in respect of contracts for public works and consultancy services, and to joint venture between foreign and local firms for all procurement, including of goods, under international and national competitive tendering.
"3. In this Act unless the context otherwise requires - [...]
"consultant" means a firm, company, corporation, organisation, partnership or an individual person engaged in or able to be engaged in the business of providing services in architecture, economics, engineering, surveying or any field of professional services, and who is, according to the context, a potential party or the party to a contract with the procuring entity; [...]
"contractor" means a firm, company, corporation, organisation, partnership or an individual person engaged in civil, electrical or mechanical engineering or in construction or building work of any kind including repairs and renovation, and who is, according to the context, a potential party or the part to a procurement contract with the procuring entity; [...]
"local firm" means a firm whose majority share capital is owned by citizens of the United Republic;
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54.National preferences
(1) Tenderers shall be allowed to participate in procurement proceedings without regard to their nationality, except where the procuring entity has limited participation in procurement proceedings on the basis of nationality in accordance with this Act, the regulations, or any provisions of any other written law.
(2) The procuring entity shall, when procuring goods, works or services by means of international or national tendering, or when evaluating and comparing tenders, grant a margin of preference for the benefit of tenders for certain goods manufactured, mined, extracted or grown in the United Republic, for works by Tanzania contractors or services provided by Tanzania consultants, provided that this is clearly stated in the tender documents subject to the provisions prescribed in the regulations made under this Act.
(3) Tanzania contractors or consultants shall be eligible to be granted a margin of preference as provided for in subsection (2) only if they meet the following criteria:
(a) for individual companies- (i) are incorporated or registered in the United Republic; (ii) majority of the paid up share capital of the company is owned either by the Government or by citizens of Tanzania; or (iii) there is no arrangement whereby any major part of the net profits or other tangible benefits of the domestic company will accrue or be paid to persons who are not citizens of Tanzania or to companies which would not be eligible under this section;
(b) for joint ventures of local companies- (i) individual member companies are incorporated or registered in the United Republic; (ii) majority of the paid up share capital of the individual companies are held by citizens of Tanzania; (iii) the joint venture itself is registered in Tanzania; or (iv) do not have arrangement whereby any major part of the net profits will accrue or be paid to persons who are not citizens of Tanzania or to companies which would not be eligible under this section; and
(c) for partners or individual persons trading as contractors or consultants the majority are held by citizens of Tanzania.
(4) For all procurement under international and national competitive tendering, incentives set out in the regulations made under this Act, shall be used to encourage foreign firms to team up with Tanzanian tenderers in the form of joint venture or subcontracting arrangements in the tender process and in the execution of the contract.
55. Exclusive preference to local persons or firms
(1) Where financial resources are exclusively provided by a Tanzanian public body, each procurement of works, goods or services that has a value not exceeding a threshold specified in the regulations shall be reserved exclusively for local persons or firms.
(2) Where the procuring entity does not proceed with the local person or firm set-aside under subsection (1), and procures on unrestricted basis, the procuring entity shall include in the procurement file the reason or reasons for the unrestricted procurement.
(3) Where procuring entity receives only one acceptable offer from a responsible local person or firm in response to procurement set-aside, the procuring entity may consider to make an award to that person or firm.
(4) Where the procuring entity receives no acceptable offers from responsible local persons or firms, the set aside procurement shall be withdrawn and if the requirements are still valid, new offers shall be resolicited on unrestricted basis
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55A. Inclusion of local firms and experts in consultancy contracts
(1) Foreign firms competing to be awarded non-emergency consultancy assignments whether by tender or any other means recognized in this Act shall be required to include local experts and firms in their teams.
(2) In the evaluation of foreign firms, procuring entities shall ensure that the principle of mandatory inclusion of local experts and local firms in nonemergency assignments has been observed and shall be apportioned a weight to reflect its intensity and level.
(3) A procuring entity shall, for the purpose of subsection (1), assign weights as follows: (a) in the criteria for participation of local firms, assignment of maximum weight of fifteen percent shall be included in the request for proposal, and firms that demonstrate inclusion of local firms of at least fifty percent are granted a full score; and (b) in the criteria for participation of national experts, assignment of maximum weight of ten percent shall be included in the request for proposal, and firms that demonstrate that at least fifty percent of their key staff who are Tanzanians, are granted a full score.
55B. Use of local experts in goods, works and non-consultancy services contract
When applying the margin of preference in respect of works or non-consultancy services, a procuring entity shall comply with the guidelines issued by the Authority, and shall consider- (a) in addition to shareholding structure in the joint venture, the extent of inclusion of key
local staff in the joint venture; and (b) the extent of use of materials locally manufactured, produced or mined.
55C. Preference to local goods
In contracts for goods and related services to be awarded on the basis of international competitive tendering or national competitive tendering, procuring entities shall grant a margin of preference of up to fifteen percent to domestically manufactured or produced goods and related services as prescribed in the regulations.
55D. Capacity building of local firms
(1) A procuring entity shall, after consultation with relevant statutory bodies, set aside contracts to be used for the purpose of capacity building of local firms.
(2) Where individual firms lack the capacity to execute the contracts, the firms may form joint ventures with a view to enhancing their capacity.
(3) The Minister may make regulations prescribing procedures for capacity building of local firms under this section.
55E. Ownership of share capita
Notwithstanding any other provision to the contrary, local firm under sections 55A, 55B, 55C and 55D shall have a share capital which is wholly owned by citizens of the United Republic."[...]" (Public Procurement Act (Chapter 410) of 2011, last amended in 2022)
Public Procurement Act (Chapter 410) of 2011, last amended in 2022
[<a href="https://www.ppra.go.tz/2012-03-07-08-56-44/public-procurement-act">Act</a>]