President Museveni has withdrawn an order he made on April 21, instructing government entities not to deal with road construction firm, Dott Services.
Media reports say the president's reverse decision came after the attorney general, William Byaruhanga, recently advised him that the order was "unconstitutional" and could be challenged.
According to the reports, Mr. Byaruhanga told him that the Constitution does not grant him power to give executive orders, warning that government could be sued.
The attorney general proposed that if the new constitutional amendments are worked on, a provision for such orders will be included.
It’s said Museveni instructed Byaruhanga to draft something overturning the order.
Reports also indicated Museveni reportedly said his intention was not to cripple the firm, which depends largely on government, but to send a strong message to companies "which do shoddy work."
The president first order came days after one person died along the 102-kilometre Mbale-Tirinyi-Iganga highway and several others sustained injuries, after a passenger service vehicle was swept away by a heavy downpour in late April.
In a court ruling, high court judge Stephen Musota nullified government commission of inquiry blacklisting Dott Services and said that there is no evidence to prove that the company was responsible for the delays and losses incurred in the accident.