How to Handle Your First Government Contract Win in Kenya (2026 Guide)

You did it. The Letter of Award just landed in your inbox. Your company name is on a government contract. Take 20 minutes to celebrate — then read this guide, because what happens next is where most first-time winners get into trouble. Winning a tender is only half the battle. Getting paid — and doing it in a way that builds your reputation for the next contract — is where the real work begins.

Step 1: Respond to the Letter of Award within 14 days. The LoA is official notification that your bid was accepted — it is NOT the contract. Under PPADA 2015, you typically have 14 calendar days to formally accept. Miss that window and the procuring entity can award to the next-lowest qualifying bidder. Write a formal acceptance letter on company letterhead, reference the tender number and award amount, and send by email with read receipt AND physical delivery. Common mistake: assuming a verbal 'yes' phone call is sufficient. It is not — you need written, signed acceptance on record.

Step 2: Post the Performance Bond if required. Many contracts require Performance Security — typically 10% of contract value, valid for the duration plus 28 days, in the form of a bank guarantee. Read the General Conditions of Contract or Contract Data Sheet carefully for the exact percentage, deadline (often 21–28 days from LoA), and approved format. PPRA-approved banks for government performance bonds are listed in the Gazette. For contracts below KES 5 million, the performance security may be waived — confirm this in writing.

Step 3: Read every contract clause before signing. Focus on: Variation clauses (procuring entity can vary quantities by up to 15% without renegotiation under PPADA — standard). Liquidated damages — typically 0.1% of contract value per day, capped at 10%. On a KES 2M contract that's KES 2,000/day. Payment terms — 30 or 60 days, and from what date (delivery, inspection, or invoice receipt?). Step 4: Submit invoices correctly through IFMIS or the procuring entity's system. Your invoice must reference the LPO (Local Purchase Order) number, contract reference, delivery note number, and VAT details if applicable. Missing any field = delayed payment.

Step 5: Get your Goods Received Note (GRN) and Performance Certificate. After delivery and acceptance, request a signed GRN from the stores officer and a Performance Certificate from the contract manager. These are your proof of completion and are required for final payment. They also become evidence for your next tender bid. Keep these documents permanently — your track record is your competitive advantage. Common final-stage mistake: assuming the procuring entity will proactively generate your GRN and Performance Certificate. Chase them. It's your money. Register at tenderai.co.ke to find your next contract while your current one is still running.