The legislations regulating the procurement of government contracts in Kuwait are the following (the “Procurement Regulations”):
In principle, public entities including government bodies, ministries or departments or any public entity with a supplementary or an independent budget that enter into an agreement with private sector investor(s), being a local or foreign individual(s) or legal person(s), are subject to the procurement regulations listed above.
Kuwaiti public procurement legislations apply to contracts for procuring works, the supply of products and/or goods, the performance of services of economic or social importance, or to improve an existing public service, or to develop, reduce the costs or increase the efficiency of any such service. According to the the Public Tenders Law, specialised committees are established in some public authorities to carry out procurement, contracting and services, and some procurement operations in these authorities are excluded according to:
In accordance with the provisions of 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.
Under the PPP Law, the public-private partnership project models available will depend on the value of the PPP project under the following thresholds.
However, Article 16 of the PPP Law provides an exception to the above. Should the Higher Committee established under the PPP Law so propose, the Council of Ministers may decide to competitively tender special nature development projects which have a total estimated value not exceeding KWD250million. The successful investor undertakes to establish the Project Company wholly.
Under the State Property Law, it is permissible, 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 value or rental value disposed or waived does not exceed KWD50,000.
Under the PPP Law, an investor can be a private entity, person or group of people locally based or a foreign legal person whose qualifications are approved by the Higher Committee to put forward a PPP project proposal.
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 he is associated with a Kuwaiti partner or agent via a documented contract.
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.
Kuwait has a comprehensive set of Procurement Regulations that govern public procurement activities. The key obligations under the procurement legislations in Kuwait are as follows.
The Procurement Regulations in Kuwait seek to ensure that public procurement activities are conducted in a transparent, competitive, and accountable manner, and that they comply with ethical and legal standards. For instance, under the Public Tenders Law, the CAPT forms a technical department including engineers, quantity surveyors and individuals with expertise from different specialties provided that their experience will not be less than 10 years and they shall be responsible to implement technical standards to classify contractors, assess applications, study and evaluate bids or even the technical recommendation of the relevant public authority, study cost estimates of the tender project and compare with the estimates of the relevant authority, study and evaluate variation orders, etc, all to ensure fair and equal treatment.
The PPP Law states that the selection of the investor is subject to principles of transparency, freedom of competition, openness and equal opportunity. In addition, there are various entities and committees established for a proper chain of command to ensure transparency in dealings.
The Kuwaiti legislations mandate the prior advertisement of regulated contract award procedures under the Public Tenders Law, the PPP Law and the State Property Law, but are silent to this effect under the provisions of the Bids Circular.
Under the Public Tenders Law, the 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.
The CAPT, after the approval of the State Audit Bureau on the awarding, shall notify the successful tenderer in writing – with acknowledgment of receipt – of the acceptance of its bid and of the awarding of the tender to him, within one week, and a copy of this letter shall be sent to the project owner. The decision shall be published in the Official Gazette and on the CAPT’s website immediately after its issuance.
Under the PPP Law, the announcement of projects accepted for procurement is made in the Official Gazette and at least two Kuwaiti dailies, both in Arabic and English, as well as in other local and international media outlets, and through publication on the KAPP website. The announcement shall include an overview of the PPP project, its objectives and its proposed location (if any), and the procedure for submitting the expression of interest and any other information or conditions related to the PPP project, and the period for submitting the expression of interest shall not be less than two weeks from the date of publication of the announcement.
Under the State Property Law, the call for the bids shall be announced in the Official Gazette and in one or more local papers (at least one announcement must be made), provided that such announcement includes the following:
The legislations do not prohibit a party from carrying out preliminary market consultations before officially launching the contract award procedure. A potential awarding authority can carry out an unofficial investors’ outreach process but may nevertheless require such investors to sign a confidentiality agreement or a non-disclosure letter if commercially sensitive information will be communicated to them that may affect the bidding process later on.
The Kuwaiti legislations mandate the tender procedures that may be used for the award of a contract. As such, the tender procedure is outlined under each legislation as follows.
Tender Process Under the PPP Law
Tender Process Under the State Property Law and the Bids Circular
The initiation process
Tender Process Under the Public Tenders Law
Call for expression of interest
Tender Procedure Under the PPP Law
The PPP Law provides for one tender procedure that must apply to PPP projects. As such, the awarding procedure under this law can be described as follows.
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 governmental entity.
Tender Procedure Under the State Property Law
Similarly, this legislation provides for one tender procedure, the process of which is outlined below.
Tender Procedures Under the Public Tenders Law
Several tender procedures are set out under this legislation as follows.
Additionally, the awarding of the project based on the tender models described above can be summarised as follows.
Under the PPP Law
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 Kuwaiti Ministry of Finance determines each tendering step period depending on the project type.
Under the Public Tenders Law
As mentioned under 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 regards 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.
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. However, there is no mention of a time limit for the receipt of expressions of interest under the State Property Law.
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 website of the Central Agency for Public Tenders, in advance no later than 30 days from the project pre-qualification requests deadline.
Under the PPP Law
The PPP Law provides the criteria related to investor qualification. The 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 in 1.4 Openness of Regulated Contract Award Procedure, 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.
Under the Bids Circular
The Bids Circular lays out the bidding criteria a bidder must follow for a successful submission. Among many are the following.
The Project Company that shall be established for the management of the awarded project must be Kuwaiti (ie, Kuwaiti shareholding in the company shall be minimum 51%). In the event any foreign investors wish to participate in the Project Company, it is important to take into account foreign ownerships restrictions, as foreign shareholding is restricted to 49% and hence foreign investors cannot own all the shares or the majority of the controlling shares of the Project Company.
However, this situation can be mitigated under the provisions of Law No 16 of 2013 regarding the promotion of direct investment in Kuwait, pursuant to which the Kuwait Direct Investment Promotion Authority (KDIPA) grants foreign investments licences enabling foreign investors to own up to 100% of the equity in the Project Company established and registered in Kuwait.
Under the Public Tenders Law
The Public Tenders Law and its executive regulations (No 30 of 2017) lay out four categories under which bidders must apply. The categories are divided based on the value and importance of the project, as follows:
If the project value increases, this does not mean that bidders are eligible to switch categories if they have already applied under a specific one. However, bidders should apply for another category by abiding by the process laid out in the executive regulations.
To apply for a category, the bidder shall be Kuwaiti (an individual or a company) registered in the Commercial Registry. He must be registered in the relevant field he is tendering in: for instance, registered in the supplier or contractors’ registry. The bidder can be a foreigner, but certain provisions will not apply to him.
The offer can be limited to national companies that have sufficient specialisation in the local market. The offer can also be limited to foreign companies when needing to carry out works in a way requiring technical specialties not available locally, and this upon request by the relevant authority.
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.
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.
In addition to what is mentioned 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 PPP Law
To participate in a project that is being tendered according to the 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:
Based on its feasibility study, the project to be tendered for investment must meet the following criteria.
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 Public Tenders Law
As mentioned under 2.7 Eligibility for Participation in a Procurement Process, 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 Procurement Regulations, there is no obligation to disclose the criteria of evaluation 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 Bid Circular 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. In contrast, the Public Tenders Law does not provide for a notification obligation or procedure concerning the parties who have not been selected.
On the other hand, the PPP Law mentions that the KAPP must inform both approved and rejected investors of their technical offers. Those who were rejected have the option to file a grievance with the Grievance Committee following the terms and conditions outlined under the Law and its executive regulations.
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.
Under the Public Tenders Law
Under the PPP Law, at the request of the complainant, the Grievance Committee may issue a decision to temporarily suspend the contracting proceedings until the complaint is resolved. If the grievance is rejected either explicitly or implicitly, the proceedings shall continue.
Under the Public Tenders Law’s executive regulations No 30 of 2017, the head of the procurement authority or the CAPT’s committee, according to the specialisation, may stop the procurement procedures within seven working days from the date the complaint was submitted.
The PPP Law
After establishing the negotiation and signing of the PPP agreement, the KAPP must seek the approval of the Higher Committee for the whole PPP contracts package. Under the PPP Law, procurement proceedings can be cancelled for public interest purposes. The Higher Committee is behind the cancellation decision based on the proposal by the KAPP and the decision shall detail the reasons behind the cancellation.
All complaints and grievances related to any proceeding or decision that violates the Law and its Executive Regulations shall be reviewed by the Grievance Committee. This committee was established based on a decision by the Council of Ministers. The concerned person must submit the complaint or grievance to the committee within 15 days after being notified of the decision or becoming aware of it.
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.
The State Property Law
The procurement system department studies the bids and refers all accepted bids to the concerned technical departments for their opinions. The procurement system department has the right and authority, at its sole discretion, to cancel the bid at any time.
The Public Tenders Law
In cases that do not need a technical examination, the CAPT awards the tender immediately to the owner of the bid consistent with the requirements of the tender documents of the least price. The CAPT notifies the concerned authority of the tender result, and the concerned authority shall respond, commenting on the award, during a period not exceeding 10 days from the date of receipt of the notification. The owner of the project then requests the successful bidder to attend to sign the contract within 30 days of the date of submission of the final bid bond payment.
The award of the tender to the successful bidder does not entail any right for him before the government should the latter decide to withdraw from entering into a contract as the result of a decision taken by a Department of the Council of Ministers after consulting with the concerned authority based on a memorandum issued by that authority. The decision is taken by a majority of two-thirds of its members and the bidder shall only be considered as successful upon signing the contract.
Any interested party may appeal against decisions issued by the classification committee, that is, the one that decides under which category the bidders are classified, within two weeks from the notification date.
The bidder’s complaint shall be submitted to the head of the competent procurement authority where it breaches any of its obligations under this law and causes loss or damage to the bidder; this takes place at any stage of the procurement process. If the complaint relates to the person handling the technical documents of the tender or its general conditions, in violation of the rules and equal opportunity, any person affected by such act has the right to file complaint until the bidding process is over. If the complaint is about procurement procedures before completion of the contract or before the beginning of its implementation, it must be submitted within a period of seven working days from the date the decision was published.
The complaint must be dealt with within seven days from the date it was submitted, and through a reasoned decision indicating the necessary corrective measures taken to maintain the integrity of the tender procedures.
Under the Public Tenders Law
Public authorities subject to the provisions of the Public Tenders Law are subject to investigation for any act of negligence or default in handling and preparing the tender documents and the consequent issuance of unjustified variation orders, as well as for cases of inaction in awarding procedures or committing anything that would breach the provisions of this law.
At the request of the affected party, the referral to investigation is made and a decision must be reached by either abstaining or penalising the party in breach within a maximum of 30 days from the date of discovery or becoming aware of the breach. Furthermore, Article 84 adds that any act of violation of the Law is void, and the party who suffers damage as a result of such violation may claim compensation.
The Public Tenders Law provides further that any bidder who suffers loss caused by a tenderer’s breach or by a party violating the procurement procedure, may file a complaint before the procurement authority or the head of the relevant authority as the case may be. The bidder may ask the relevant entity to reconsider what caused the loss or ask for remedial steps to be taken. Grievance against the CAPT’s Board decisions shall be submitted to the Grievance Committee within seven working days of publishing the decision relating to the bid and, in the event of complaints regarding a fault made by CAPT’s Board affecting the contractor, the decision shall be submitted within 30 days from the day of fault.
The State Property Law and the Bid Circular are silent on this point.
Under the PPP Law, any individual who is affected by a decision that violates the provisions stated under this law or its executive regulations can file a complaint to the Grievance Committee. The committee is open to receiving complaints or grievances from any party who has a connection to and suffered harm as a result of the errors or actions that may have occurred during the contracting procedures that were conducted by the KAPP, or any decisions made by the Higher Committee. Upon request from the complainant, the grievance committee has the authority to suspend the contracting proceedings until a decision is made regarding the complaint.
Further to the details provided under 4.2 Remedies Available for Breach of Procurement Legislation, an unsuccessful investor can challenge or appeal the decision of an awarding authority as follows.
Under the Public Tenders Law
The Public Tenders Law mentions that the General Assembly of the Court of First Instance determines a courtroom with the competence to consider public procurement cases and disputes associated therewith, from which, administrative disputes. In the Court of Appeal, a specialised entity shall be formed to consider appealed judgments issued by the administrative entity. The verdict shall be decisive and may not be challenged by any method of appeal.
Under the State Property Law
The State Property Law mentions that the management, use and sale of state property is within the competence of the concerned public entity owning such property under the conditions set forth by the Ministry of Finance (MOF) and in accordance with the general rules stipulated by the Council of Ministers, hence the overlooking power of the Council.
Furthermore, in line with the scope of the State Property Law, the MOF reserves the right to accept or reject any bid, and to annul the bidding process and reject all bids, at any time prior to award of contract, without thereby incurring any liability to the affected bidder or bidders or any obligation to inform the affected bidder or bidders of the grounds for the MOF’s action.
Given that the contract governing the relation between the investor and the public entity is an administrative contract, the administrative department is the competent authority to consider disputes that arise between administrative authorities and other contractors in commitment contracts, public works contracts, supply contracts, or any other administrative contract, and it has full jurisdiction over them. This is based on Law No 20 of 1981 and its amendments.
Under the PPP Law
The PPP Law mentions that the Council of Ministers establishes a Grievance Committee that will receive grievances from concerned parties relating to any decision issued in violation of the provisions of the PPP Law. Any concerned party is entitled to file a complaint or grievance before the committee regarding any inaccuracies related to the contracting procedures conducted by KAPP, or any decision made by the Higher Committee.
Complaints or grievances must be submitted within 15 days from the date the contested decision or action is issued and notified to the complainant. The Grievance Committee must promptly notify the Higher Committee or the Authority upon receiving such complaints or grievances.
Within 15 working days of receiving a grievance, the Grievance Committee will issue a decision either accepting or rejecting the grievance, providing justification for its decision. Both the complainant and the respondent shall be notified promptly after the decision is made. If the Grievance Committee fails to make a decision, the complaint shall be deemed rejected. The decision made by the Grievance Committee shall be forwarded to the Higher Committee, whose decision shall be considered final.
Council of Ministers
The Council of Ministers has the power to regulate the development and implementation of projects in Kuwait. The Council is vested with the executive power to control and supervise the interests of the state in the manner specified under the Kuwaiti Constitution. As such, the Council of Ministers can be said to have the standing to challenge the awarding authority’s decisions if they conflict with public interests or are against the state’s policies.
Please refer to 4.1 Responsibility for Review of the Awarding Authority’s Decisions and 4.4 Challenging the Awarding Authority’s Decisions.
The Procurement Regulations and the related applicable laws do not specify the time length of the subject proceedings. In practice, they typically vary between six months and three years depending on the particularity of the case.
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 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 then applied.
The Public Tenders Law mentions that the relevant authority may not issue any variation orders in the contract tender to vary in the range of 5% (more or less) without the approval of the CAPT and the allocation of the respective financial requirements by the responsible entity.
Under the PPP Law, any amendment to be made is to be agreed upon in accordance to 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.
It is worth mentioning that the project procurement and management is thoroughly reviewed and controlled by the Ministry of Finance (MOF), whether the project has been awarded to the Project Company under the legal framework of the PPP Law or the State Property Law. The MOF retains an important degree of control and supervision on the project tendering process, contracting process and implementation stage. Indeed, for instance, no deviations or variations from the project tender documents must be made in the contracts.
The contracting parties to the PPP agreement/bid contract must agree on the variation mechanism of any of the project’s conditions in the project’s contracts, as no amendments must be made without the prior approval of the MOF or the concerned authorities thereto. Additionally, as an administrative contract, the project contracts typically contains “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 any additional buildings, infrastructures, structures required to be established, a justifying letter must be submitted to the MOF and the concerned governmental authorities to obtain their express approval on the matter.
Refer to 2.4 Choice/Conditions of a Tender Procedure and 2.8 Restriction of Participation in a Procurement Process.
Most of the cases submitted before courts relate to the non-renewal of the contract by the public entity. In a case initiated in 2019 and continued until 2021, a contract had been made under the State Property Law between a public entity and a private investor, and, upon expiry of that contract, the public entity did not renew the contract with the same investor it originally contracted with. The contract was awarded to a new investor offering a more attractive offer than the previous investor.
The latter filed a lawsuit before the Commercial Department of the Court of First Instance on the grounds that the new investor did not fulfil the technical requirements of the bid. The new investor objected by demonstrating proof of his expertise. The Court of First Instance ruled in the favour of the new investor.
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, there have been no recent amendments introduced to date.
Kuwait has made considerable progress in the development of its procurement system over the past decade. The country has implemented a range of measures aimed at improving transparency, fairness, and competitiveness in the procurement process, while also promoting efficiency and effectiveness in the use of public funds.
One of the key developments in the procurement system in Kuwait has been the enactment of the new Public Tenders Law No 49 of 2016 (the “Public Tenders Law”) as detailed below. In addition to the Public Tenders Law, Kuwait has also enacted the Public Private Partnership Law No 116 of 2014 (the “PPP Law”), providing general guidelines of project procurement procedures to be implemented by project companies, which must be legally established and incorporated.
Public Tenders Law No 49 of 2016
The Public Tenders Law of Kuwait No 49 of 2016 (the “Public Tenders Law”), is a comprehensive legislative framework that governs the procurement of goods, works, and services by the Kuwaiti government, through the Central Agency for Public Tenders (CAPT) and its affiliated entities. The Public Tenders Law aims to promote transparency, fairness and competitiveness in the tendering process and ensure that public funds are utilised efficiently and effectively.
The Public Tenders Law applies to all procurement activities conducted by government entities, including ministries, public institutions and public sector companies. The law also applies to private sector companies that are awarded contracts by government entities, where the value of the contract exceeds a certain threshold set by the Public Tenders Law.
One of the key objectives of the Public Tenders Law is to promote fair competition and prevent any discriminatory practices during the procurement process. The law requires that all procurement activities are advertised publicly, allowing all interested parties to submit bids. It also mandates that the evaluation of bids is conducted based on objective criteria that are specified in the tender documents.
Transparency and fairness
The Public Tenders Law also emphasises the importance of transparency and accountability in the procurement process. The law requires that all procurement documents, including tender documents and evaluation reports, are made publicly available, published in an official gazette. The Law also establishes a Tenders Board, which is responsible for overseeing the procurement process, ensuring compliance with the provisions of the law, and resolving any disputes that may arise during the tendering process.
Additionally, the Public Tenders Law outlines the different kinds of penalties that can be imposed if any rules or regulations regarding public tenders are violated.
The Public Tenders Law also includes provisions to ensure that the tendering process is fair and that all interested parties are notified of the tender and any clarification to be made shall include all the bidders.
In addition to promoting fair competition and transparency, the Public Tenders Law also seeks to promote efficiency and effectiveness in the procurement process. As such, the law requires that all procurement activities are conducted in a timely manner, and that contracts are awarded to the most economically advantageous bid. The Law also encourages the use of electronic procurement systems to streamline the procurement process and reduce administrative costs.
Regarding typical procurement practices in the oil sector, the CAPT has authority over procurement contracts occurring inside Kuwait and whose value is more than 5 million Kuwaiti Dinars (KD). A procurement unit is established at the Kuwait Oil Company (KOC) that will specialise in procurement contracts not exceeding KD5 million.
Ministry of Defence
A decree is issued based on a proposal made by the relevant Kuwaiti Prime Minister regarding the formation of specialised committees for procurement affairs of military materials for the Ministry of Defence, Ministry of Interior. The decree shall outline the procedures of forming the procurement committees, determines their roles and supervises them.
Promotion of SMEs
The Public Tenders Law also includes provisions aimed at promoting the participation of Kuwaiti small and medium-sized enterprises (SMEs) in government procurement activities. The Public Tenders Law requires that a certain percentage of government contracts be awarded to Kuwaiti SMEs, and that these contracts be awarded on a preferential basis.
Under the provisions of the Public Tenders Law, public entities are permitted to contract for any of the purposes specified by the law without seeking permission from the CAPT provided that the contract value does not exceed KD75,000. It is noteworthy that this represents a significant increase in the contract value exemption, which was previously capped at KD5,000 under the previous tenders law.
Use of technology
Kuwait has also made significant progress in the use of electronic procurement systems, which have helped to streamline the procurement process and reduce administrative costs. The government has implemented a range of e-procurement initiatives, including the implementation of an electronic tendering system and the use of electronic reverse auctions.
Overall, the Public Tenders Law of Kuwait is a significant legislative framework that has the potential to improve the efficiency, effectiveness and transparency of government procurement activities in Kuwait. The Law’s emphasis on fair competition, objectivity and accountability, as well as its support for the participation of Kuwaiti SMEs, is expected to contribute to the development of a more competitive and dynamic procurement market in Kuwait.
Public Private Partnership Law No 116 of 2014
The Public Private Partnership Law No 116 of 2014 (the “PPP Law”) in Kuwait and its executive regulations is a comprehensive legal framework that governs the formation and operation of Public Private Partnerships (PPPs) in Kuwait. The PPP Law was enacted to encourage the participation of the private sector in public infrastructure development projects and to promote economic growth and development by providing more flexibility to the procurement sector in Kuwait.
The PPP Law applies to all infrastructure development projects that are carried out in partnership between the public and private sectors. This includes projects in sectors such as transportation, energy, water, health, and education. The PPP Law establishes a clear legal framework for the formation and operation of PPPs, which helps to provide clarity and certainty to private sector investors.
Transparency and fairness
Similar to the Public Tenders Law, one of the important features of the PPP Law is that it emphasises the importance of transparency and fairness in the procurement process. The PPP Law requires all PPP projects to be advertised publicly, in the official gazette, allowing all interested parties to submit proposals.
The PPP Law also establishes a clear process for the negotiation and execution of PPP contracts. Additionally, the PPP Law requires that PPP contracts are negotiated in good faith and that they include provisions that protect the interests of both public and private sector partners. Furthermore, the PPP Law also mandates that PPP contracts are subject to review by the State Audit Bureau, which helps to ensure that public funds are utilised efficiently and effectively.
The PPP Law also includes provisions aimed at protecting the environment and promoting sustainable development. The PPP Law requires that all PPP projects comply with environmental and social standards, and that they contribute to the overall development of the country.
In contrast with the State Property Law No 105 of 1980, the investment term of a project under the PPP Law is more attractive to an investor(s) as it grants the investor an investment period of up to 50 years, in comparison to an investment period of a maximum of 20 years under the State Property Law.
The PPP Law and its executive regulations provide the opportunity for the established “Project Company” under its provisions, to receive additional exemptions and incentives. The Terms of Reference (TOR) shall outline the incentives offered to Investors to encourage proposal submissions, as well as any exemptions from income tax, custom duties, or other fees granted to the Project Company, as determined by the Higher Committee.
Generally, the PPP Law is an important legal framework that provides a clear and transparent process for the formation and operation of PPP projects in Kuwait. The PPP Law’s emphasis on transparency, fairness and sustainability is expected to attract private sector investment and promote economic growth and development in the country.
In conclusion, the procurement system in Kuwait has been significantly developed over the past years, and the country has made great strides in promoting transparency, fairness and competitiveness in tenders. Today, the government’s commitment to the development of e-procurement systems and the promotion of SME participation is expected to contribute also to the continued growth and development of the procurement system in Kuwait embedded in the country’s national development strategies.