A series of provisions under the Executive Bylaws of the Law on the Organization of Tenders and Auctions No.16 (2019) have been amended by the Council of Ministers Resolution No.11 of 2022 (the 2022 Resolution). According to the Ministry of Finance officials, the changes made aim to strengthen and support the economic activities that fall outside the scope of the oil industry as there is a growing trend towards enhancing the role of the private sector in implementing a variety of development projects. The key points under these amendments pertain to the enhancement of procurement processes; the incorporation of in-country value (ICV); and support dedicated to micro and small-medium enterprises (SMEs). This short article shall address these main changes in turn, with specific reference to the relevant articles under the 2022 Resolution.
Enhancement of Procurement Processes
The amendments enhance the procurement process through the development and acceleration of procurement in government organizations, namely by providing specific time periods to organize transactions. For example, Article 29 of the 2022 Resolution stipulates that a bidder has 15 working days to submit a bid from the date of announcement, however, after the bid has been received, the Committee of Tenders and Auctions (the Committee) shall have 60 working days to decide on the tender and inform both the bidder and the competent department. Additionally, Article 22 specifies a period of 20 days from the date of submitting the final performance guarantee where the contract shall be signed, and under Article 70, the contract needs to be put into motion 90 working days from the date of signing. The aim of adopting these time restrictions is to aid in speeding up the process as well as increase the efficiency of tenders. The benefit from this is the minimized risk of a company incurring losses due to unspecified timings of the procedure.
Another key inclusion under the 2022 Resolution is the added definition of ICV under Article 2 which is defined as:
The “total amount spent by the contractor, supplier or service provider within the State for the development of works, services or national human resources to stimulate productivity in the local economy. This shall be determined through a certificate of the previously executed contracts, or the plan provided by the bidder within its tender indicating the target amount of the local value of the contracting value.”
The rationale behind this amendment is to implement ICV procedures in the procurement process to aid in the country’s sustainable economic growth. Additionally, contained under Article 3 are provisions which encourage corporations to support the local economy by getting government clients to consider the ICV ratios of the bidders and then awarding the government contracts to successful bidders.
Under Article 4 of the 2022 Resolution provisions regarding the support of SMEs have been included which state that SMEs shall be exempted from paying for tender documents valued at less than QR1 million and from providing temporary and final performance guarantee. Additionally, the government authority may limit the participation of micro and small enterprises with regards to tenders valued at less than QR5 million and the SMEs shall only be required to pay half the value of the required classification fee. The goal behind these provisions is to provide opportunities that allow national micro and SME firms to grow, as well as increase the amount of tenders available to them and facilitate their cooperation within the public sector.