Public Procurement 2024 Comparisons

The procurement of government contracts in Kuwait is primarily regulated by the following legislations (the “Procurement Regulations”).

• The Public Tenders Law enacted under Law No 49 of 2016, as amended by Law No 74 of 2019 and further amended by Law No 1 of 2024 (the “Public Tenders Law”) together with its executive regulation issued by decree No 30 of 2017 (the “PTL By-laws”), regulate the government tenders, auctions and procurement process in Kuwait.
• The Public Private Partnership Law (the “PPP Law”) enacted under Law No 116 of 2014 and its executive regulations, which establish a legal framework for partnerships between the private and public sectors, governing the procurement of infrastructure and public service projects.
• The State Property Law No 105 of 1980 and its amendments (the “State Property Law”) governs the acquisition, management (use and maintenance) and disposal of state-owned properties, including those involved in government procurement projects, along with Bids Circular No 4 of 1997 (the “Bids Circular”).

Kuwaiti public entities (the “public entities”), including ministries, government agencies, government departments, public committees, public institutions with subordinate or general/independent budgets, and government-owned companies, are subject to the Procurement Regulations.

The Public Tenders Law generally governs the procurement process for government contracts in Kuwait, applying to various types of contracts such as goods procurement, services contracts, lease contracts, build-operate-and-transfer (BOT) contracts, and concession contracts.

Any government contract exceeding a value of KWD75,000 falls under the procurement’s scope according to the Public Tenders Law, as per the interpretation of Article 19 of the Public Tenders Law.

Additionally, specialised committees are established within some public authorities to oversee procurement, contracting and services. Certain procurement operations in these authorities are excluded from the procurement process, including those related to Defence, National Guard and Interior Affairs, the Central Bank, and Kuwait Oil Company and its wholly owned companies.

Regarding Public-Private Partnership (PPP) projects, the procurement procedure varies based on the project’s value. Pursuant to Article 12 of the PPP Law, projects with a total cost not exceeding KWD60 million shall be procured by the Kuwait Authority for Partnership Projects (KAPP) through competition between investors. The successful investor shall establish the project company that will implement the project (the “Project Company”).

Pursuant to Article 13 of the PPP Law, projects with total cost exceeding KWD60 million shall be procured by KAPP through competition between investors and KAPP shall establish a joint stock company following the procurement and selection of the successful investor. Shares in this joint stock company are distributed as follows:

• 6–24% shares owned by the public entity concerned;

• 26–44% shares owned by the Project Company; and
• 50% shares to be subscribed through an initial public offering (IPO) to Kuwaitis.

In exception to the above procurement method, pursuant to Article 16 of the PPP Law, the council of ministers may, upon a proposal made by the higher committee for partnerships (the “Higher Committee”), decide in a justified written decision to procure certain development projects of special nature with a total cost not exceeding KWD250 million through competition between investors, provided that the successful investor shall establish the Project Company. However, if the total cost of such project exceeds KWD250 million, the Project Company shall be established based on the method outlined in Article 13 of the PPP Law.

On the other hand, under the State Property Law, the allocation of state properties shall only apply to residential, industrial, commercial and agricultural plots, and shall not apply to governmental houses or any other state property that is mandated by special rules. It is permissible, however, by virtue of a decision by the Council of Ministers, to own private or movable state property free of charge as well as use it rent-free if the selling or rental value disposed or waived does not exceed KWD50,000.

Under the Public Tenders Law and Kuwaiti companies’ laws, regulated contract award procedures were previously subject to the limitation whereby foreign bidders were not allowed to participate in bids unless partnered with a local agent. However, the government’s more inclusive approach was demonstrated through Law No 1 of 2024 (the “Amendment”), which now permits foreign corporate entities to establish branches in Kuwait and carry out business activities, including participating in public tenders, without requiring a local agent.

Pursuant to the Amendment, the participation of foreign investors meeting the criteria and conditions outlined in the relevant Public Tenders Law is no longer considered an exception contingent on the contract’s scope.

Article 4 of the Public Tenders Law mentions that the Central Agency for Public Tenders (CAPT)’s scope covers local procurement contracts belonging to a public entity located in a foreign country whether the person or entity being contracted with is Kuwaiti or not.

The openness to foreign investors has also been shown in the PPP Law whereby private local or foreign investors, or consortiums thereof, can qualify as eligible participants to PPP projects, subject to approval by the Higher Committee.

The Bids Circular specifies that the bidder must be a Kuwaiti individual or a company, registered in the Commercial Register and with the Kuwait Chamber of Industry and Commerce. The bidder may be a foreigner provided they are associated with a Kuwaiti partner or agent via a documented contract.

The key obligations outlined in the Procurement Regulations include the following.

• Fostering competition – The Procurement Regulations require that procurement procedures be structured to promote competition. This entails ensuring the participation of multiple qualified suppliers or contractors in the bidding process, maintaining fairness and openness throughout the bidding process.
• Upholding objectivity – The awarding authority must determine the technical standards of the products, works or services in a comprehensive, accurate and detailed manner, taking into account the approved standard specifications. The authority shall also specify an estimated value of the subject of the procurement, in accordance with the market prices at the time of the tendering, taking into consideration the key factors that impact the nature and the conditions of the contract execution. To this end, the awarding authority may seek the opinion of experts with specialised technical expertise who work for governmental institutions or any other institutions experienced in the relevant fields. This comprehensive approach aims to guarantee objectivity throughout the awarding process.
• Ensuring equal treatment – All suppliers and bidders must receive equal treatment. This involves applying uniform evaluation criteria and methods to all bidders.
• Maintaining transparency – Procurement entities must conduct the procurement process in a transparent and fair manner ensuring equal treatment of all bidders and suppliers.
• Prioritising cost-effectiveness – Procurement authorities are required to achieve the fairest offer that balances between the cost and quality of goods and/or services for the best implementation of the project/contract.

The Procurement Regulations mandate the prior advertisement of regulated procurement procedures.

Under the Public Tenders Law

Under the Public Tenders Law, the CAPT shall announce the tender or similar bids in the official gazette and on the CAPT website, at the request of the public entity concerned. The CAPT determines the appropriate period for submission of bids from the date of announcement in the official gazette, provided that this period does not exceed 90 days.

The announcement shall specify the deadline for filing tenders/bids and the duration of their effectiveness, the product or work required to be supplied or executed, the corresponding fee for a copy of the tender, and the authority to which the tenders are submitted, ie, CAPT headquarters.

Following awarding of the project upon approval by the State Audit Bureau, the CAPT shall notify the successful investor in writing, with acknowledgement of receipt, of the acceptance and awarding of the investor’s tender/bid within one week, and a copy of this letter shall be sent to the public entity concerned, requester of the tender.

The awarding decision shall be published in the official gazette and on the CAPT website immediately upon issuance.

Under PPP Law

Under the PPP Law, KAPP shall announce the projects approved by the Higher Committee for procurement in accordance with the PPP Model, in the official gazette and at least two Kuwaiti daily newspapers, both in Arabic and English, as well as other local and international media related to the nature of the project and through announcement on the KAPP website.

The announcement shall include the public entity identified as responsible for the project, a short description of the project and its objectives, incentives to be provided to the contracting party, the PPP Model, its term, and the deadline to receive the project documentation and to apply for qualification and the deadline for the submission of proposals in accordance with the qualification documents, the terms of reference, and other related documents.

To this extent, according to the Executive Regulation of the PPP Law, the procedure for submission of the expression of interest and any other information or conditions related to the PPP project shall not be less than two weeks from the date of publication of the announcement, provided that requests for expressions of interest may be accepted by email. Based on this study, KAPP can determine the feasibility of taking the legally prescribed procedures to call for pre-qualification of private investors wishing to compete to secure the project, in preparation for submitting a recommendation to the Higher Committee.

Under the State Property Law

Under the State Property Law, the call for bids shall be published in the Official Gazette and in at least one daily newspaper, and any additional media announcement as necessary, at least 15 days before the public bidding session and awarding date. Such announcement shall include the following details:

• the number and subject of the bid;
• the place of receipt of the bid documents;
• amount to be paid for the bid documents;
• the entity to which the bids are submitted;
• the deadline for receiving bids;
• bidding process timeline;
• value of the initial bid bond; and

• any other information that the authority concerned deems fit to include.

Preliminary market consultation is not explicitly mandated under the Procurement Regulations. However, public entities may carry out preliminary market consultations before officially launching the contract award procedure. A prospective awarding authority may engage in such informal outreach with potential investors. These investors may be required to sign confidentiality or non-disclosure agreements if commercially sensitive information, which may affect the bidding process, will be communicated to them, to ensure transparency without undue favouring or discrimination.

The Procurement Regulations mandate the tender procedures that may be employed for the award of a contract. As such, the tender procedure is outlined under each legislation as follows.

Tender Process Under the Public Tenders Law

The initiation process

• The relevant authority requesting the CAPT to call for a tender shall first prepare realistic and objective studies, based on its annual plans, to determine the necessary actual needs of the workflow or production on the basis of the applicable requirements and rates.
• The relevant authority shall obtain CAPT’s approval to initiate the pre-qualification procedure.
• The announcement of the invitation for tender, or for submitting bids or pre-qualification requests, shall be published in the Official Gazette, as well as on the website of the agency, in advance no later than 30 days from the deadline.
• Pre-qualification applications shall be submitted by potential bidders according to the templates and requirements set forth by the authority. Technical and/or financial proposals may be required according to the nature and criteria of each project.
• The bids should be returned, filled and complete in all aspects, accompanied by the bid bond, as per the conditions set forth in the tender documents. The bid shall remain in force and it is not permissible to deviate from it, from time of its release until the end of its period of validity. No modification to the prices will be taken into account after the submission of tender.
• Fees payable for the provision of tender documents shall be paid by the interested bidder/tenderer upon submission.
• In cases where the competent procurement authority decides to hold a session for inquiries in respect of any tender or practice, the announcement for the session shall include the date and venue of its convention, to be attended by the desiring persons of those who have purchased the document of the tender or practice.
• The relevant authority shall circulate the replies immediately to all tenderers, without disclosing the source of demand.

The qualification process

• The envelopes of bids shall be opened at the time and place set forth in the tender documents in a public session in the presence of bidders or their representatives, and they shall be disseminated live on the CAPT website. The applicants of the technically accepted proposals shall be notified of the date and venue of the convening of the session of opening the financial envelopes. During the session, the board of the CAPT opens each of the technical envelopes, after verifying their integrity, the presence of the number of the tender and the signing of the previously proved stamp of the CAPT on every envelope.
• The CAPT shall refer the envelopes of technical bids to the relevant authority to study them and submit recommendations with regard thereto to the CAPT within a period of 30 days from the date of referral to it. The relevant authority – in cases of major and technically complex projects – shall have a right to demand extension of this period up to a maximum 60 days for reasons acceptable to the agency.
• The CAPT announces the names of the bidders who have been qualified to participate in the tender in the Official Gazette, in addition to notifying all bidders (approved and rejected) of the results of the qualification process in writing.
• The tender should be awarded and the contract shall be signed within a period not exceeding three months from the date of the expiration of the period of bidding.

Tender Procedures Under the PPP Law

• The tendering process for the project shall be managed by a competition committee (the “Competition Committee”) to be set up for each PPP project.
• The Competition Committee shall be constituted separately for the proposed project, by a decision of KAPP and subsequent to the approval of the Higher Committee, for the purpose of reviewing, studying and preparing all documents pertaining to the project and to further evaluate all technical and financial proposals.
• The comprehensive feasibility study may be prepared by either the Competition Committee, Project Company, or the public entity concerned, in accordance with the PPP Law, to be presented before the Higher Committee for approval of the project.

Call for expression of interest

• The KAPP may announce the request for expression of interest for the project before the qualifications procedures, to assess the desire and interest of the private sector to participate in the implementation of the PPP project before the tendering of the project.
• The KAPP may announce the Request for Expression of Interest for PPP projects, as a procedure preceding the qualification proceedings, in order to assess the interest and willingness of the private sector to participate in the implementation of the project prior to undertaking the procurement proceedings, in the Official Gazette and other local or international media that are suitable with the nature of the project, and through the publication of the same on the KAPP website.
• The KAPP examines the expression of interest applications submitted by investors, based on which it determines whether to take the necessary legal actions to invite the investors for pre-qualification, before submitting its recommendation to the Higher Committee.

The pre-qualification

• The Higher Committee may undertake either a pre-qualification or a post-qualification process based on the recommendation of the KAPP and in accordance with the nature of the PPP project.
• The draft request for quote (RFQ) documents are prepared by the KAPP (with the assistance of the transaction adviser) in collaboration with the public entity concerned and shall be submitted to the Higher Committee for final approval; thereafter, the advertisement of the RFQ shall be made.
• The duration for submission of the qualification requests shall be no less than 15 days from the date of publication in the Official Gazette, unless the Higher Committee decides to undertake a post-qualification process based on the KAPP recommendation and the nature of the project.
• The Competition Committee reviews the qualification applications submitted by the prospective bidders, based on the criteria, methodology and relative weight of each factor as stated in the RFQ. Thereafter, the Competition Committee submits to the KAPP a report summarising the results of the evaluation of the qualification applications.
• After examining the report, the KAPP submits it to the Higher Committee, along with KAPP’s recommendations.
• The KAPP shall publicly announce the list of pre-qualified bidders in the Official Gazette and the local newspapers and identify them on the KAPP website.

The request for proposal (RFP) steps

• The Competition Committee (with the assistance of the transaction adviser) shall develop the RFP package for the tendering process and submit it to the department of legal advice and legislation and the public entity for review and approval.
• The KAPP and the Competition Committee would then raise the RFP package along with the draft PPP agreement and the draft advertisements for the Higher Committee’s approval.
• After approval, the advertisement of the RFP should be distributed by the KAPP through media outlets, the Official Gazette, at least two Kuwaiti daily newspapers, both in Arabic and English, other local and international media that are suitable having regard to the nature of the PPP project, and the KAPP website.
• The proposal of each bidder shall comprise the technical bid, the financial bid and the bid bond of the investor in accordance with the provisions of the PPP Law and as per the project’s procurement documents, as well as the RFQ in case of post-qualification.

Potential negotiations with investors

The public entity concerned may carry out negotiations with the preferred investor – or the other participating investors where negotiations with the preferred investor prove unsuccessful – for certain clarifications regarding the technical and financial requirements. However, such negotiations may not include any contractual terms considered non-negotiable according to the terms of reference of the project. No modification may be allowed regarding the technical and financial criteria according to which the RFPs were evaluated.

Tender Procedures Under the State Property Law and Bids Circular

The initiation process

• The public entity concerned shall prepare the study for the bid and present it to the procurement system department along with the bid request letter for the latter’s approval and determination of the bid’s value.
• The procurement system department prepares the bidding documents and sends them to the department of legal advice and legislation for its review.
• Movable state property may be subject to a public bidding session upon announcement thereof in the Official Gazette and in one or more local papers at least two days prior to the date of the bidding session.
• The state’s real estate properties shall be disposed of, based on the approval of the Minister of Finance, to a Kuwaiti national, through a public bidding session which shall be announced through mandatory publication, as previously mentioned in 2.1 Prior Advertisement, at least 15 days before the bidding session.

The qualification process

At this stage of the bidding process, the procurement system department undertakes the following.

• Arranges a session to open the financial envelopes for the submitted bid offers.
• Reviews the bid documents and amount of each investor and disqualifies any investor who has failed to comply with the bid requirements.
• Its secretary evaluates the technical and financial offers and submits their report along with each investor’s primary bid security to the procurement system department for review.
• It may clarify some points that are not clear with the accepted bids, provided that its decision does not affect the total bidding prices or the conditions of the bid.
• Neither the State Properties Law nor the Bids Circular provide for unofficial investors’ outreach process, or any requirements or restrictions related thereto. However, it is commonly suggested, in the event investors are to be contacted and provided with non-public and commercially sensitive information or information that may affect competition at the time of initiation of the bidding process, that a confidentiality agreement be signed with such investors (although not mandatory).

The Procurement Regulations provide for different procurement methods, where each method is subject to a special procedure, as per the following.

Under the Public Tenders Law

The main procurement method is through one-step or two-step public tenders. Government contracts may be awarded through any of the following methods, subject to a reasoned memo presented by the public entity concerned to the board of the CAPT.

• Limited tender through which a certain number of skilled suppliers or contractors, registered with the CAPT, are called based on their technical and financial specialisation.
• General or limited negotiations (competitive negotiations or solicitation offers) through which specialists or a few of them are invited so that each of them could present, upon being informed on the required specifications, an offer based on the conditions laid out.
• Direct command under which the required object is directly obtained from the market through the relevant party supplying the items directly.
• It is permissible to resort to collective procurement tenders, electronic negotiations and framework procurement agreements according to the relevant contracting conditions.
• Public entities may contract for any purpose without involving the CAPT, in accordance with a circular issued by the Kuwaiti Ministry of Finance (MOF) portraying the needs of the party concerned, if the contract amount does not exceed KWD75,000. A review by the Council of Ministers is made every five years to increase the value mentioned by a maximum of 20%.
• The public entity concerned shall establish an integrated electronic system or other electronic means, and the system must comply with security and protection standards to communicate with contractors to ensure the safety of awarding and contracting procedures in an environment that maintains maximum transparency, competition, equality and equal opportunities among contractors.
• The public entity concerned may resort to procurement through framework agreements in any of the following cases, in the form of a tender, limited or general practices when there is a need to repeatedly contract for goods, services or to carry out small business activities, or when the relevant public entity expects, due to the nature of any required goods, services or works, that the need will arise for their purchase in the future.

Under the PPP Law

The PPP Law provides for a single awarding procedure that must apply to PPP projects. As such, the awarding procedure under this law can be described as follows.

• The Competition Committee, established for the PPP project, shall undertake evaluation of the technical proposals and submit a report along with its recommendations to the Kuwait Authority for Partnership Projects (KAPP) for approval.
• The KAPP shall notify the investors whose technical offers were approved and those who were rejected.
• The Competition Committee shall arrange a public session to open the financial envelopes for the offers submitted by the investors.
• The Competition Committee must prepare a report in connection with the evaluation of the technical and financial offers and submit it to the KAPP.
• The KAPP must notify the investor concerned and the relevant ministry of the preferred investor to proceed with negotiations.

The KAPP must seek the approval of the Higher Committee (for the PPP projects) for the whole PPP contracts package. Following this step, all agreements are negotiated and signed by the Project Company and the relevant public entity.

Under the State Property Law

Similarly, this legislation provides for one tender procedure, the process of which is outlined below.

• The procurement system department studies the bids and refers all accepted bids to the units or technical departments concerned for their recommendations and opinions.
• Investors with the best offer and conforming bidding documents shall be awarded the bid.
• In the event of any equal bids, the bid awarding may be divided equally if it does not conflict with the project’s interest.
• The procurement system department reserves the right, at any time, to cancel the bid at its sole discretion.

Please see 2.4 Choice/Conditions of a Tender Procedure.

Under the Public Tenders Law

As mentioned at 2.3 Tender Procedure for the Award of a Contract, the announcement in the Official Gazette is made no later than 30 days from the project pre-qualification request deadline. The CAPT must submit its recommendation with regard to the bid offers within a period of 30 days from the date of referral. This time limit can be extended to 60 days in case of major or complex projects.

Under the PPP Law

• The KAPP advertises the RFP and waits for the submission of proposals within an estimated timeframe of two to three months. Within the same timeframe, the Competition Committee evaluates these proposals to award qualified investors the project.
• Documents for the qualifying investors are then prepared, reviewed and approved by the Competition Committee, transaction adviser of the PPP project and the KAPP in order for them later to be advertised to the qualified investors, all this within an estimated timeframe of three to four months.
• Once the RFP documents are prepared, reviewed and approved by the authorities concerned, the RFP documents are advertised by the KAPP, following which KAPP receives the proposals submitted by the investors.
• The Competition Committee and the KAPP then evaluate these proposals.
• The Competition Committee negotiates with the preferred investor.

It is worth noting that, before the KAPP announces the identity of the successful investor, the department of legal advice and legislation and the State Audit Bureau must first grant their approval.

Under the State Property Law and the Bids Circular

The State Property Law and the Bids Circular do not provide for any accurate bid process timeline. However, in practice the estimated bidding process under the State Property Law and the Bids Circular framework may take up to six months, noting that the procurement system department of the MOF determines each tendering step period depending on the project type.

Under the Public Tenders Law, each competent procurement authority shall determine the deadline for submitting bids regarding any procurement process or pre-qualification requests or for responding to any call announced to express interest in participating in a limited tender. This is done to allow sufficient time for all tenders wishing to submit bids, or request for qualification to review the announcement and respond to it.

The announcement of the invitation for the project tender, or for submitting bids or pre-qualification requests, shall be published in the Official Gazette, as well as on the CAPT website, in advance no later than 30 days from the project pre-qualification requests deadline.

The PPP Law mentions that the time limit for receipt of a request for expression of interest shall not be less than two weeks from the date of the announcement’s publication.

Under the State Property Law, there is no mention of a time limit for the receipt of expressions of interest.

Under the Public Tenders Law

The Public Tenders Law and PTL By-laws lay out four categories under which bidders must apply. The categories are divided based on the value and importance of the project, as follows:

• the first category includes contractors capable of implementing high-value projects estimated at more than KWD10 million;
• the second category includes bidders capable of implementing projects with value ranging between KWD5 million and KWD100 million;
• the third category is for bidders aiming to participate in projects with value ranging between KWD1 million and KWD10 million; and
• the fourth category concerns local bidders for projects with value not exceeding KWD2 million.

Bidders/contractors may submit first-time classification applications or applications for classification elevation to the Classification Committee, in accordance with the provisions outlined in this regard by the PTL By-laws.

To apply for a category the bidder may be Kuwaiti or a foreigner. If the bidder is a Kuwaiti physical individual corporate entity, it shall be registered in the commercial registry in Kuwait (the “Commercial Registry”). Such bidder must also be registered in the relevant field they are tendering in, such as being registered in the supplier or contractors’ registry. However, if the bidder is a foreigner, the Amendment provides that such bidder is not subject to the registration requirement in the commercial registry, nor to the 49% foreign ownership cap stipulated in the Commercial Law.

Also under the Amendment, the discretionary power of the relevant public entity to limit the offering of the tenders to national companies or to foreign companies only has been revoked. Foreign bidders are now allowed to participate in all tenders if they meet the criteria outlined under the law and they are no longer required to partner with a local agent to participate in bids.

Under the PPP Law

The PPP Law provides the criteria related to investor qualification. An investor wishing to participate in the tendered project must prove its ability to successfully implement it and fulfil its obligations if awarded the project contract. Any person or company, whether Kuwaiti or non-Kuwaiti is eligible to apply for a project concept to KAPP. However, as mentioned at 1.4 Openness and International Competition, the investor’s qualifications must be approved by the Higher Committee.

The primary value of the insurance must be paid (in KWD) either in the form of a certified cheque or letter of guarantee issued by a local bank. The offer must be made in local currency (KWD). Any documentation or information relevant to the offer should be attached.

All consortiums submitting proposals must provide the necessary documents, including a certified copy of their consortium agreement as well as the identification of the authorised representative of the consortium along with their appointment document.

The successful investor must submit a performance bond in the required amount, in the form of a letter of guarantee issued or confirmed by a bank licensed to operate in the State of Kuwait. This letter should include the wording of the guarantee, the time of delivery following the investor’s appointment, its validity period, and means of renewal.

As mentioned under 2.4 Choice/Conditions of a Tender Procedure, participation in the procurement process under the Public Tenders Law can be restricted to a certain category of qualified investors based on the criteria and the conditions set out under the law. However, no specification is made as to the minimum number of qualified suppliers invited to participate in the process.

The Bids Circular provides that the public entity has the right to qualify the bidders before placing the bid. There is no reference under this legislation to a minimum number of qualified suppliers that may be invited to participate in a contract award procedure.

Further to the response under 2.4 Choice/Conditions of a Tender Procedure, tenders are evaluated and a winner is awarded on the basis of the following criteria.

Under the Public Tenders Law

As mentioned under 2.7 Time Limits for Receipt of Expressions of Interest or Submission of Tenders, once bidders select and apply under their selected category and fulfil the requirements needed for their successful application, the selection process takes place. The CAPT, in cases not requiring a technical examination of the tender, awards the tender immediately to the bid owner who was consistent in following and fulfilling the tender document requirements and offered the lowest price. Tenders that contain technical and financial technicalities will be selected if they meet these technical and financial requirements at the lowest price.

The CAPT Board of Directors discloses the result of the technical tender once the technical evaluation is completed. The bidder affected by the assessment decision may appeal such decisions as further detailed under 4.1 Responsibility for Review of the Awarding Authority’s Decisions.

Generally, it seems that the contract award is granted by the relevant authority concerned in reviewing the documents presented by the bidders, assessing whether such documents conform to the submission criteria and the purpose of the project.

It is worth noting that, when comparing tender submissions, the CAPT reviews the criteria in an objective manner and keeps the cost as a primary criterion. The CAPT also employs a points system to assign technical project work to a bidder determined by their achievement of certain criteria that are based on a points system.

Under the PPP Law

To participate in a project that is being tendered according to this law, investors must demonstrate their ability to carry out the project and fulfil their obligations if they win the competition and are awarded the project. The assessment of the investor’s capability is conducted via qualification procedures. Depending on the project’s nature and as per the KAPP recommendation, the Higher Committee may conduct either a pre-qualification or a post-qualification process to ensure the appropriate selection of investors with the ability to implement each project independently. Thus, the proposal with the better technical offer prevails. In all instances, the State Audit Bureau must give approval for the competition award.

The KAPP shall submit the results of the feasibility study, whether prepared by the Competition Committee, private sector or public entity, as well as its recommendations regarding the approval or rejection of the project in accordance with the PPP model. If the project is approved, the recommendation shall include the following:

• proposed method of competition for the procurement of the project (either through a bidding process or a tender process);
• type of PPP Model to implement;
• identify the relevant public entities concerned in relation to the project, in order for them to participate in the procurement process, approve technical specifications, participate in evaluating the offer and award for the project, sign the PPP agreement and follow up on the operation and implementation of the project until its term;
• the proposed timetable for the procurement stages;
• proposed investment term;
• any exemptions or specific privileges to be granted;
• the purpose of the proposed service, ie economic or social purpose or whether it is to develop or improve an existing service;
• any request for the allocation of the land (if any); and
• any other requirements based on the project’s nature.

Based on its feasibility study, the project to be tendered for investment must meet the following criteria.

• Project must conform to all legal, technical and environmental conditions. It shall also be economically feasible, and the benefits offered by the project to the state or the service owners should be suitable and reflect best practice standards.
• A comparison is made between whether the project is implemented through a PPP model or by a public entity and this comparison shall include the following:
1. value for money;
2. risk allocation;
3. use of technology and transfer of knowledge; and
4. project must be promising financially to the investor and an investment risk shall be made vis-à-vis the private sector to create an opportunity for competition.

Under the State Property Law and the Bids Circular

In addition to what is stated under 2.3 Tender Procedure for the Award of a Contract and 2.4 Choice/Conditions of a Tender Procedure, the Bids Circular provides that the tender is awarded to the highest price bid provided that all tendering requirements have been met and that the value given is greater or equal to the estimated value of the bid.

Under the Kuwaiti Procurement Regulations, in order to ensure that only eligible and compliant tenders proceed to the contract award stage, the awarding authority may exclude tenders from the contract award procedure in several circumstances, including the following.

• Tenders may be excluded if they fail to meet the specified requirements outlined in the tender documents or procurement regulations.
• Tenders may be rejected if they contain incomplete or insufficient information necessary for proper evaluation or consideration.
• Tenders that do not meet the technical or quality standards specified in the tender documents may be excluded from consideration.
• Bids that do not fulfil the specified criteria or qualifications set forth in the procurement regulations or tender documents may be excluded.
• Tenders may be excluded based on procedural irregularities or violations identified during the evaluation process.
• In cases where a successful tenderer withdraws their bid, the awarding authority may consider cancelling or excluding the tender from the awarding project, subject to any sanctions or penalties imposed on the withdrawn tenderer.

Under the Procurement Regulations, there is no obligatory provision which entails disclosure of the evaluation criteria based on which bidders are selected or tenders evaluated. This is left at the discretion of the relevant public authority concerned in selecting the successful bidder.

The Public Tenders Law mandates the relevant public entity to notify any unsuccessful bidder in writing, upon their request, of the rationale behind the rejection of their bid or the inadequacy of their pre-qualification application or any proposal they have tendered, within a period of ten business days from the date of their inquiry.

Under the PPP Law, the KAPP must inform both approved and rejected investors of the decisions regarding their technical offers.

Under both laws, those who were rejected retain the option to file a grievance before the Grievance Committee abiding by the terms and conditions outlined under the Public Tenders Law and PPP Law and their executive regulations.

On the other hand, the Bid Circular No 4 of 1997 provides that the Procurement System Department notifies the unsuccessful bidders to return their samples within 15 working days from the notification date and releases their primary insurance.

The Procurement Regulations lay down the conditions for notification of contract award decisions to bidders according to the following provisions.

Under the Public Tenders Law

• The public entity, owner of the project, shall request the successful bidder to attend for signing the contract within 30 days as of the date of submission of the final bid bond payment.
• Following the State Audit Bureau’s approval of the award, the CAPT shall notify the successful tenderer in writing – with acknowledgement of receipt – of the acceptance of their bid and of the awarding of the tender to them, within one week, and a copy of this letter shall be sent to the public entity. The decision shall be published in the Official Gazette and on the website of the agency immediately after its issuance.
• The public entity shall notify the successful bidder, for the payment of the final bid bond after ten days from the awarding. If the successful bidder does not submit such payment within one month upon notification, the successful bidder may be considered withdrawn from the bid, unless the public entity extends the final payment.
• The public entity enters into the bid contract with the selected investor, upon submission of the final bid bond.
• The bid contract must reflect and include all bid requirements and conditions.
• The procurement system department shall then follow up on the implementation of the project bid contract in co-ordination with the public entity and the selected investor.

Under the PPP Law

As mentioned above, the KAPP shall notify investors whose technical offers were approved.

Under the State Property Law and the Bids Circular

The procurement system department shall notify the winning bidder whose bid has been accepted in writing of the bid result, after obtaining the approval of the State Audit Bureau within five working days from the date of the bid selection.

The Procurement Regulations do not mandate granting prior hearing to bidders before an awarding decision is taken. However, such prior hearings are allowed under the Procurement Regulations mostly for clarification purposes, and in some cases for negotiation of negotiable conditions/requirements.

The Public Tenders Law imposes certain procedures for preliminary meetings, including announcing the date and time, allowing all investors having obtained tender documents to attend, circulating minutes and responses to all bidders, and announcing the outcome of the meeting.

Under the PPP Law, negotiations with the preferred investor may be conducted to clarify technical and financial requirements, but non-negotiable contractual terms must be adhered to. Modifications to the technical and financial criteria used for proposal evaluation are not permitted.

If negotiations with the preferred investor fail, other ranked investors will be invited for negotiation rounds until a final agreement is reached or all are rejected. The public entity cannot resume negotiations with any investor previously rejected. The public entity can cancel procurement for justified reason.

Under the PTL By-laws, the CAPT board may stop the procurement procedures in the event a complaint is submitted, within seven working days starting from the date the complaint was submitted to the board.

Under the PPP Law, in case of submission of a complaint or grievance, the Grievance Committee may issue a decision to temporarily suspend the contracting proceedings until the complaint is resolved if the complainant so requests in a direct manner. Where the grievance is rejected, either explicitly or implicitly, the proceedings shall be carried on without any implications.

Under the Public Tenders Law and PPP Law, the decisions of the awarding authority are typically reviewed by the Grievance Committee. The decisions rendered by this committee can be appealed.

Under the PPP Law, procurement proceedings can be cancelled by the Higher Committee for public interest purposes based KAPP proposal and the decision shall detail the reasons behind the cancellation.

Regarding complaints and grievances, the Higher Committee has the authority to take whatever action it deems necessary in response to the Grievance Committee’s recommendations or decisions. Any decisions made by the Higher Committee in this regard will be considered final.

Under the State Property Law, after reviewing the bids, the procurement system department refers all accepted bids to the relevant technical departments for their opinions. The procurement system department reserves the right and authority, at its sole discretion, to cancel the bid at any time.

The remedies available for breach of the Procurement Regulations vary depending on the type and severity of the breach and the contractual terms of the relevant project. The remedies typically involve legal actions such as filing complaints which lead to the following:

• imposing fines or penalties on the breaching party;
• nullification of the tender process in case of material breach;
• termination of the project or PPP agreement and re-tender the project;
• restrictions on the breaching party from participating in future tender processes or PPP projects; and
• compensation for damages incurred as a result of such breach.

Interim measures such as suspension of contract award procedures may be invoked in certain circumstances. Upon request from the complainant affected by the violation of the Procurement Regulations, the Grievance Committee has the authority to suspend the contracting proceedings until a decision is made regarding the complaint.

Any entities or individuals who have interest in the award procedure and have been directly affected by the decision of the awarding authority or can demonstrate a sufficient connection to the matter, may have standing to challenge the awarding authority’s decisions. This includes bidders who have participated in the tender process and believe their rights have been infringed upon, or that the process has been conducted unfairly, improperly or in such a manner that they were disadvantaged, as well as government agencies and regulatory bodies with vested interest in the relevant project.

Under the Public Tenders Law, complaints pertaining to violations of the provisions of the law or equal opportunity by officers handling the technical documents of the tender or its general conditions can be filed until the bidding process is over. Complaint regarding procurement procedures prior to contract completion or before its implementation must be submitted within seven working days from the publication date of the decision.

Under the PPP Law, all complaints or grievances regarding any inaccuracies in the contractual procedures or violations of the law must be filed within 15 days from the date the contested decision or action is issued or notified to the complainant.

The Procurement Regulations and the related applicable laws do not specify the time length of the subject proceedings. In practice, they typically range between six months and three years depending on factors such as the complexity of the case and the technical formalities, which include the notification period of the opponents, the period set between sessions, whether for review or implementation of decisions, and the defence presented by opponents, including the public entity or other parties in dispute. This also includes the tenderer who was awarded. In addition, the length of the proceeding is affected by the evidentiary procedures that the court may adopt, such as resorting to expertise, conducting interrogations, or other pleading procedures. A preliminary ruling may be issued within six months from the start of proceedings.

It is challenging to assess the average number of procurement claims considered by the relevant review bodies as such information is not publicly available.

The appeal filed against the decision issued by the awarding authority (as an administrative authority) is subject to payment of a fixed fee amounting to KWD10. However, if there is a financial claim under an administrative contract between the awarding authority and the private investor, then a proportional fee will be due which is equivalent to 2.5% for all claims up to KWD10,000, and, for any amount exceeding the KWD10,000 limit, a proportional fee of 1% is applied.

It is to be noted that the compensation request accompanying the cancellation request is always temporary compensation in the amount of KWD5,000, and the case is heard before the Administrative Department of the Court of First Instance.

Moreover, there is a special administrative department to consider appeals related to tenders, and the ruling issued by this department is subject to appeal with payment of an appeal fee of KWD50. The appeal decision cannot be challenged by cassation.

Modifications of contracts following their award are permissible under the Procurement Regulations. However, such modifications must be in compliance with the Procurement Regulations. Furthermore, depending on the nature and extent of the modifications, such modifications may be subject to approval from the relevant authority or oversight bodies before changes can be implemented.

According to the Public Tenders Law, variation orders in contract tenders are limited to a range of 5% (more or less) without approval from CAPT and allocation of the respective financial requirements by the responsible entity.

Under the PPP Law, any amendment to be made must be agreed upon in accordance with the provisions stipulated under the PPP contract. The Higher Committee shall submit its report with any contractual amendments to it to the Council of Ministers.

Under the State Property Law, the bid offer may not be modified by the project company upon submission of the bidding documents.

As an administrative contract, the project contracts typically contain “exorbitant clauses”. These clauses contain certain prerogatives to the public entity, such as the right to terminate the agreement for public interest and amend the private investor’s obligations under the agreement, which shall be executed without any objection.

During the implementation process, any variations to the project’s execution framework must be approved by the public entity. For the establishment of any required additional buildings, infrastructures or structures, a justifying letter must be submitted to the MOF and the governmental authorities concerned in order to obtain their express approval on the matter.

The Procurement Regulations set out the cases according to which awarded contracts or tendered projects may be terminated, as per the following.

Under the Public Tenders Law

In principle, the booklet for the particular conditions of each tendered project shall specify the conditions for termination of the awarded contract. However, common events which trigger termination of tendered contracts include:

• failure of successful contractor to sign the awarded contract with the public entity concerned;
• failure of successful contractor to implement the subject of the contract due to its insolvency or the like;
• failure of successful contractor to settle the final insurance payment; and
• reasoned decision by the CAPT to terminate the contract for public interest reasons, based on the relevant entity’s request or recommendation.

Under the PPP Law

Termination may occur in any of the following events.

• Preservation of public interest – the Higher Committee may approve the termination of the agreement at the request of the public entity or KAPP, for reasons based on public interest, provided that the Higher Committee justifies its decision, demonstrates the benefits of such termination, and provides an estimate of the fair compensation to be paid to the contracting investor in accordance with the PPP Agreement.
• Failure to perform obligations under the PPP Agreement – if the contracting investor fails to perform its contractual obligations or if it commits gross or material errors affecting the regular and steady course of the project or leading to the cessation of work or to its bankruptcy, the Higher Committee may, at the request of KAPP or the public entity supervising the project or the lenders, if any, substitute the contracting investor with another investor, who takes its place to complete the remaining term of the agreement.
• Termination by court decision – exceptional to the above events, the public entity may only terminate the agreement based on a court decision.
• In all cases, the state reserves the right to manage the project, manage and develop it directly, or terminate the activity thereof.

The Procurement Regulations grant several prerogatives to the awarding authorities, including the following.

Under the Public Tenders Law

The following prerogatives are granted.

• The law allows for the establishment of specialised committees within certain public authorities to oversee procurement, contracting and services independently from the tendering award procedures. These committees have specific powers and responsibilities tailored to their respective entities.
• The law grants discretionary power to the relevant public entity to exclude certain contracts or tenders from the standard procurement procedures, based on specific circumstances or requirements of the project.
• The awarding authority has the authority to impose sanctions or penalties on tenderers who fail to comply with the tender requirements or who engage in misconduct during the procurement process.

Under the PPP Law

The following prerogatives are granted.

• The Higher Committee established under this law has the authority to make decisions regarding the exclusion of contracts involving state-owned land and leases, particularly those initiated before the enactment of the law, if they do not meet the criteria of the PPP model.
• This law provides a framework for negotiating and structuring public-private partnerships, giving the awarding authority significant control over the terms and conditions of such agreements.
• The Higher Committee and other relevant authorities have decision-making power regarding the selection of private sector partners, project feasibility studies, and overall project approval.

Under the State Property Law

The following prerogatives are granted.

• This law excludes certain government properties, such as government houses or those regulated by special provisions, from the standard tendering procedures outlined in the law.
• The law grants discretion to the public entity concerned to manage and dispose of state-owned properties in a manner that aligns with the broader objectives of the law and the entity’s responsibilities.

The majority of cases submitted before courts involve disputes over non-renewal of contracts by the public entity concerned. However, there are two notable recent cases initiated in October 2023 and November 2023 respectively, concerning a tender for IT and communication infrastructure at Kuwait University campus in relation to claims for acceptance of non-compliance offer.

After evaluation, CAPT determined that no tenderers met all requirements and rejected the offer, but a grievance committee later reversed the decision, allowing the offer to proceed to financial evaluation.

This offer tender was ultimately accepted, while six were rejected for incomplete information. A lawsuit ensued over the acceptance decision, alleging bias and incomplete tender evaluation. The court dismissed the original and ancillary lawsuits in final judgments.

Aside from the introduction of the Public Tenders Law No 49 of 2016 and its amendment No 74 of 2019, replacing Law No 37 of 1964, and the very recent amendment through Law No 1 of 2024 amending Article 24 of Commercial Law No 68/1980 and Article 31 of the Public Tenders Law, which permits foreign companies to open branch offices in Kuwait and participate in tenders without the need for a local agent, effective since 21 January 2024, there are currently no additional legislative amendments under consideration.