Law No. 49 of 2016 on Public Tenders

Law No. 49 of 2016
on Public Tenders

Part One
Definitions and Scope of Application of the Law

Chapter One

Article 1

Definitions

For the purposes of applying the provisions of this Law, the following terms shall have the meanings assigned to each of them:
– Public Entities: Ministries, government departments, public authorities and public institutions with annexed or independent budgets, and companies wholly owned by Kuwait Petroleum Corporation.
– Competent Minister: The Minister of State for Cabinet Affairs or the Minister assigned by the Council of Ministers for this purpose.
– Agency: The Central Agency for Public Tenders.
– Chairman: The Chairman of the Board of Directors of the Central Agency for Public Tenders.
– Board: The Board of Directors of the Central Agency for Public Tenders.
– Requesting Entity: The Public Entity requesting the tender.
– Procuring Entity: The Central Agency for Public Tenders or the Public Entity undertaking procedures to obtain any procurement.
– Procurement Systems Department: The department of the Ministry of Finance competent to set public procurement policies and systems and to monitor their application.
– Budget: The budget of the Requesting Entity.
– Official Currency: The monetary unit determined by the State.
– National Product: Any product of national origin in accordance with the provisions of Article Three of Law No. (58) of 1982 approving the Unified Economic Agreement between the GCC States, Law No. (5) of 2003 and Law No. (81) of 1995 referred to above.
– Public Tender: The set of procedures taken by the Procuring Entity in accordance with this Law to carry out procurement operations, or for the Requesting Entity to obtain services or any works required in accordance with this Law, which is subject to the principles of publicity, equality and competition.
– Tender Documents or Request for Proposals Documents: The documents issued by the Requesting Entity or the Procuring Entity on the basis of which bids or proposals are submitted in accordance with this Law, and which include, as the case may be: instructions to bidders, technical specifications, maps, designs, terms of reference, work programmes, bills of quantities, contract conditions, forms of letters of guarantee, and evaluation criteria.
– Supplier, Contractor or Undertaker: Any actual or potential party to a procurement contract with the Requesting Entity, whether a natural or legal person. The term “Undertaker” includes, as the context requires, any natural or legal person supplying goods, executing works or providing services.
– Main Contractor: The contractor contracting with the Public Entity.
– Subcontractor: The classified and registered contractor who signs a contract with the Main Contractor to execute certain works of the project after approval by the Requesting Entity.
– Spot Investment Transaction: Day-to-day investment transactions undertaken by Public Entities within their competence which by their nature require an immediate decision, such as dealing in bonds and securities.
– Procurement, Procurement Process or Public Procurement Procedures: The procedures undertaken by any Procuring Entity in accordance with this Law to obtain the supply of goods, the performance of services or the execution of works, in accordance with one of the procurement methods provided for in this Law.
– Supply of Goods: Operations for the purchase of goods and commodities of every kind, and the services accompanying their supply.
– Works: The construction, reconstruction, restoration or renovation of buildings, structures or facilities, such as site preparation, excavation, installation of equipment or materials, finishing, operation and maintenance, as well as ancillary services accompanying construction, including soil testing, engineering and geological surveys, survey works, aerial photography and other services provided under the works contract. Facilities also include roads, bridges, tunnels, pavements, car parks, electricity and water stations and networks, sewers, drainage, airports, ports, waterways and water channels, land reclamation and railways.
– Services: Procurable items other than goods and works, comprising the benefits of things and persons that can be valued in money and may be the subject of dealings, including transport services.
– Request for Proposals for Services: The document used primarily to obtain services in accordance with this Law, which contains the terms of reference for the required services, a description of the procedures for submitting proposals, the conditions they must meet, and the evaluation criteria.
– Bid: An offer made by a supplier, contractor or undertaker at the request or announcement of a Public Entity, containing a technical, time and financial statement of the items to be contracted for (goods – works – ordinary services), in conformity with and fulfilment of the tendering documents, whatever the tendering method.
– Alternative Bid: Another bid that differs in technical specifications from the original bid submitted, for reasons beyond the bidder’s control, due to force majeure or the unavailability of the minimum number of manufacturers or suppliers, provided that it is not below the technical specifications put to tender and is consistent with the announced tender conditions.
– Pre-qualification Documents: All documents relating to pre-qualification, including the invitation to participate in pre-qualification and the pre-qualification requirements and criteria.
– Collective Procurement: Procurement procedures that the Ministry of Finance may undertake on behalf of several government entities. The term also includes the paper or electronic collective procurement catalogues issued by the Ministry of Finance for use by Procuring Entities, covering specific goods with defined specifications and fixed prices but without fixed quantities, on the basis of contracts concluded with suppliers.
– Electronic Practice: A method of procurement conducted in real time over the internet, used by government entities to select the winning bid, involving the use of electronic means whereby bidders submit, more than once and over several rounds, prices or values for measurable non-price elements of the tender.
– Framework Agreement: Any agreement between one or more Procuring Entities and one or more undertakers, the purpose of which is to establish the terms and conditions of contracts to be awarded during a given period, particularly with regard to prices and anticipated quantities, as the case may be.
– Small or Medium Enterprise: An economic enterprise accredited as a small or medium enterprise by the National Fund for the Care and Development of Small and Medium Enterprises.
– Collusion: Any arrangement between two or more parties, before or after the submission of bids, aimed at achieving an unlawful purpose, including unlawfully influencing the actions of another party, allocating procurement contracts among bidders, or fixing bid prices at artificial, non-competitive levels, with the intent of depriving the Requesting Entity of the benefits of free and open competition.
– Website: The official website of the Central Agency for Public Tenders on the internet, dedicated to publishing announcements and information on the public procurement system and other information pursuant to this Law and the Executive Regulations.
– Non-Algebraic Sum: For the purpose of calculating the percentage of variation orders, the sum of the absolute values of the variation orders, whether by way of increase or decrease, as provided for in State Audit Bureau Circular No. (2) of 1989.
– Local Product: Any product manufactured in the State of Kuwait.

* The definitions of “Small or Medium Enterprise” and “National Product” in Article (1) were amended by Law No. 74 of 2019. Text of the two definitions before amendment:

– Small or Medium Enterprise: An economic enterprise that employs a limited number of workers and whose capital does not exceed a specified amount, as provided for in Law No. (98) of 2013 on the National Fund for the Care and Development of Small and Medium Enterprises.

– National Product: Any product manufactured in the State of Kuwait, or of national origin in accordance with the provisions of Article Three of Law No. 58 of 1982 approving the Unified Economic Agreement between the GCC States, Law No. 5 of 2003 and Law No. 81 of 1995 referred to above.

* The definition of “Local Product” was added by Law No. 74 of 2019.

Chapter Two
Scope of Application of the Law

Article 2

First: Subject to the treaties and international and regional agreements in force in the State of Kuwait, the provisions of this Law shall apply to the regulation of the procurement of goods, works and services carried out for the account of Public Entities. Except in the cases provided for in this Law, Public Entities may not import goods, engage contractors to execute works, contract for the purchase or lease of things, or contract for the provision of services except through the Agency, provided that tendering and contracting are carried out in accordance with the provisions of this Law.
Second: The provisions of this Law shall apply to contracts for services for the import of radio and television programmes.
Third: Specialised committees shall be established in certain Public Entities to carry out the procurement of goods, works and services, and certain procurement operations of these entities shall be excluded as follows:
1- Defence, National Guard and Interior Affairs:
A decree shall be issued, upon the proposal of the Prime Minister, forming specialised committees for the procurement of military materials for each of the Ministry of Defence, the Ministry of Interior and the National Guard. The decree shall specify these materials, the formation of the committees, and their working mechanisms, procedures and oversight.
This exclusion shall also apply to contracts for military facilities.
2- Central Bank:
Tenders for the construction and maintenance of the Central Bank’s buildings shall fall within the competence of the Agency; all others shall be excluded from the Agency’s competence and shall be handled by the Bank’s Contracts Committee in accordance with instructions issued by the Governor of the Central Bank, subject to the oversight of the State Audit Bureau in accordance with its rules of competence, and in accordance with Law No. (32) of 1968 concerning Currency, the Central Bank of Kuwait and the Organisation of Banking Business, as amended.
3- Kuwait Petroleum Corporation and its wholly owned companies:
With respect to standard procurement (goods – works – services), the Agency shall be competent for procurement contracts executed within the State of Kuwait whose value exceeds five million Kuwaiti Dinars, in accordance with the provisions of this Law. A procurement unit shall be formed within Kuwait Petroleum Corporation, competent for contracts whose value does not exceed five million Kuwaiti Dinars, which shall observe the provisions of this Law in its procedures, provided that the minutes of the procurement contracts it conducts are referred to each of the Agency, the State Audit Bureau and the Ministry of Finance. This unit shall also be competent to set special conditions to facilitate the qualification of small and medium enterprises, in coordination with the National Fund for the Care and Development of Small and Medium Enterprises.
Subject to the provisions of Article (152) of the Constitution, the extraction, purchase and sale of oil and its derivatives, gas and petrochemical products and their transport, and the specialised services related to the drilling and maintenance of oil wells, shall be excluded from the provisions of this Law and shall fall within the competence of the procurement unit of Kuwait Petroleum Corporation, which shall observe the provisions of this Law in its procedures. The Executive Regulations shall regulate the provisions and procedures governing the unit’s exercise of its activity.
4- Spot investment transactions of public institutions and authorities:
Spot investment transactions carried out by public institutions and authorities in accordance with their respective competences shall be excluded from the competence of the Agency.
In all cases, the provisions of this Law and its Executive Regulations shall apply to matters not governed by a special provision concerning the work of each of these Public Entities.

* The first paragraph of Clause (3) was amended by Law No. 74 of 2019. Text of the paragraph before amendment:

3- Kuwait Petroleum Corporation and its wholly owned companies:

With respect to standard procurement (goods – works – services), the Agency shall be competent for procurement contracts executed within the State of Kuwait whose value exceeds five million Kuwaiti Dinars, in accordance with the provisions of this Law. A procurement unit shall be formed within Kuwait Petroleum Corporation, competent for contracts whose value does not exceed five million Kuwaiti Dinars, which shall observe the provisions of this Law in its procedures, provided that the minutes of the procurement contracts it conducts are referred to each of the Agency, the State Audit Bureau and the Ministry of Finance.

Subject to the provisions of Article (152) of the Constitution, the extraction, purchase and sale of oil and its derivatives, gas and petrochemical products and their transport, and the specialised services related to the drilling and maintenance of oil wells, shall be excluded from the provisions of this Law and shall fall within the competence of the procurement unit of Kuwait Petroleum Corporation, which shall observe the provisions of this Law in its procedures. The Executive Regulations shall regulate the provisions and procedures governing the unit’s exercise of its activity.

Part Two
Institutional Organisation of Public Procurement Bodies

Chapter One
Public Procurement Bodies at the Decentralised Level

Article 3

Procurement Sector in Public Entities
First: Procurement Unit in the Public Entity:
1- Without prejudice to the competences of the Central Agency for Public Tenders, the Public Entity shall be responsible for carrying out the procedures relating to the public procurement process, from its planning until the completion of the contract, as set out in this Law and its Executive Regulations.
2- The Public Entity shall establish an organisational unit to plan, prepare and implement the procurement operations of that entity in accordance with the provisions of this Law.
Second: Procurement Committee in the Public Entity:
The head of the Requesting Entity shall form a procurement committee of at least (five) members selected from among the entity’s employees having appropriate qualifications and experience, as determined by the Procurement Systems Department of the Ministry of Finance in this regard. The committee shall be competent to:
(a) Prepare invitations, announcements, proposed requests for proposals and other documents relating to procurement procedures.
(b) Invite public tenders, receive bids, decide on them and award tenders in cases falling within the procurement powers of the Requesting Entity.
(c) Study and evaluate bids and proposals and make recommendations thereon, to be submitted by the head of the competent entity to the Central Agency for Public Tenders.
(d) Propose contract documents.
(e) Perform any other duties or tasks assigned to it under the Executive Regulations or by the head of the Requesting Entity.

Chapter Two
Bodies Competent for Public Procurement Affairs at the Central Level

Article 4

The Central Agency for Public Tenders
The Central Agency for Public Tenders is a public authority with legal personality and an annexed budget, attached to the Council of Ministers, and shall be competent for the following:
1) Inviting public tenders (and equivalent contracting methods), receiving bids, deciding on, awarding and cancelling them, extending and renewing administrative contracts, as well as variation orders, classification and supervision of qualification, and authorising Public Entities to contract by any contracting method in accordance with the procedures set out in this Law.
2) Subject to Law No. (5) of 1961 referred to above, the provisions of the preceding clause shall apply to contracts concluded within the State in respect of procurement works belonging to a Public Entity and located in a foreign country, whether the contracting party is Kuwaiti or foreign.
3) Any other competences provided for in this Law.

Article 5

The Agency’s Board of Directors
The Agency’s Board of Directors shall be composed of:
(a) (Seven) members named by decree upon the nomination of the Competent Minister and after the approval of the Council of Ministers, for a non-renewable term of four years. A full-time Chairman and Vice-Chairman shall be appointed from among them, provided that the term of three members of the first Board shall expire two years after appointment, and these shall not include the Chairman or the Vice-Chairman. A decree shall be issued specifying the members whose term expires and appointing their replacements for four years. The Council of Ministers shall determine their remuneration. They shall be relieved of office by decree upon the proposal of the Competent Minister.
Members must be Kuwaiti nationals of integrity, with experience and specialisation in engineering, oil, medical and economic affairs and in fields related to the Agency’s work, and must not have been the subject of a final judgment declaring them bankrupt or a conviction for a felony or a crime involving moral turpitude or dishonesty.
(b) A representative of the Fatwa and Legislation Department.
(c) A representative of the Ministry of Finance.
(d) A representative of the entity competent for planning affairs in the State.
(e) A representative of the Public Authority for Manpower.
(f) A representative of the government entity that will supervise the execution of the tender.
(g) A representative of the National Fund for the Care and Development of Small and Medium Enterprises.
The representative of each of the entities mentioned in Clauses (b, c, d, e, f, g) shall be selected on a rotating basis, for a maximum of two years for each entity’s representative.
The Board may seek the assistance of any experts it deems fit, whether from the Requesting Entity or elsewhere, to clarify any matters relating to the exercise of its competences, without such experts having the right to vote.

* Amended by Law No. 74 of 2019. Text of the Article before amendment:

The Agency’s Board of Directors

The Agency’s Board of Directors shall be composed of:

(a) (Seven) members named by decree upon the nomination of the Competent Minister and after the approval of the Council of Ministers, for a non-renewable term of four years. A full-time Chairman and Vice-Chairman shall be appointed from among them, provided that the term of three members of the first Board shall expire two years after appointment, and these shall not include the Chairman or the Vice-Chairman. A decree shall be issued specifying the members whose term expires and appointing their replacements for four years. The Council of Ministers shall determine their remuneration.

Members must be Kuwaiti nationals of integrity, with experience and specialisation in engineering, oil, medical and economic affairs and in fields related to the Agency’s work, and must not have been the subject of a final judgment declaring them bankrupt or a conviction for a felony or a crime involving moral turpitude or dishonesty.

(b) A representative of the Fatwa and Legislation Department.

(c) A representative of the Ministry of Finance.

(d) A representative of the entity competent for planning affairs in the State.

(e) A representative of the Public Authority for Manpower.

(f) A representative of the government entity that will supervise the execution of the tender.

The representative of each of the entities mentioned in Clauses (b), (c), (d), (e) and (f) shall be selected on a rotating basis, for a maximum of four years for each entity’s representative.

The Board may seek the assistance of any experts it deems fit, whether from the Requesting Entity or elsewhere, to clarify any matters relating to the exercise of its competences, without such experts having the right to vote.

Article 6

Validity of Board Meetings
The Board shall meet at the invitation of the Chairman, or of the Vice-Chairman in his absence. A meeting of the Board shall be valid only if attended by at least a majority of its members, including the Chairman or the Vice-Chairman, and if held at the premises of the Central Agency for Public Tenders.
Unless this Law provides for a special majority, the Board shall issue its decisions by a majority of its members, and the opinions of the other members shall be recorded in the minutes of the meeting. In the event of a tie, the side with which the Chairman voted shall prevail.
The Agency’s decisions shall be published in the Official Gazette, on the Website and through such other means of publication as the Agency may determine. The Executive Regulations shall set out the rules and period for publishing decisions.
If the Chairman of the Board is absent or temporarily unable to perform the duties of his office for any reason, and it is not possible or permissible for the Vice-Chairman to conduct the meeting, the Board shall, at its first subsequent meeting, assign one of its members to act as Chairman of the Board for that meeting.

Article 7

The Agency’s Technical Sector
The Agency shall form a technical sector comprising engineers, quantity surveyors and experts from various specialisations, each of whom shall have no less than ten years’ experience. It shall be competent for the following:
1- Setting technical criteria for classifying contractors and works undertakers according to their financial and technical capabilities.
2- Evaluating classification applications, determining the classification category of contractors, and submitting recommendations thereon to the Classification Committee for decision.
3- Studying and evaluating bids, or making technical recommendations to the Requesting Public Entity, at the request of the Board.
4- Studying the cost estimates of the tendered project and comparing them with the estimates of the Requesting Entity, at the request of the Board.
5- Studying requests for variation orders and submitting reports thereon to the Board for decision.
6- Any other competence provided for in this Law.
The technical sector may, with the approval of the Board, seek the assistance of technical or financial specialists or any experts it deems fit, whether from the Requesting Entity or elsewhere, to clarify any matters relating to the exercise of its competences where the tender so requires.

Article 8

Heads of the Agency’s Sectors
A Secretary-General of the Agency shall be appointed by decree to head all of its sectors, and shall have, in respect of employees, all the competences vested in an Undersecretary of a Ministry under the Civil Service Law and Regulation referred to above.
He shall be assisted by a number of Assistant Secretaries-General with specialisation and experience relating to the Agency’s work, who shall be appointed, and their grades determined, by decree. The Competent Minister shall determine the competences of each of them upon the proposal of the Secretary-General.

Chapter Three
The Procurement Systems Department of the Ministry of Finance

Article 9

The Procurement Systems Department of the Ministry of Finance shall, within the general framework of its functions and in accordance with the provisions of this Law, be competent to set procurement policies and systems and to monitor their application by Procuring Entities. Its functions in this regard shall include the following:
(a) Preparing public procurement policies and the systems required for them, and issuing directives, instructions, technical memoranda and guidance manuals for the implementation of this Law.
(b) Giving opinions on tender forms and on the drafting of model contracts, as well as on pre-qualification forms prepared by the competent entities.
(c) Collecting information on public procurement activities and monitoring the application of this Law and the Executive Regulations.
(d) Developing means to improve the functioning of the public procurement system, including the use of information and communication technology systems in procurement operations, and coordinating and cooperating with the entity competent to oversee information technology in establishing an official website on the internet as a portal for the public procurement system, to be used on a mandatory basis for publishing announcements and other information pursuant to this Law and the Executive Regulations.
(e) Preparing training programmes and other means of developing human and professional resources in the field of public procurement.
All Procuring Entities shall cooperate fully with the Procurement Systems Department and disclose to it any information they hold concerning any public procurement works or procedures, in order to enable the said Department to perform its functions.

Part Three
Procurement Procedures and Contracting Methods

Chapter One
General Provisions on Procurement Procedures

Article 10

Means of Communication and Use of Electronic Means in Procurement
1- All documents, notifications, decisions and other communications referred to in this Law shall be in writing, whether submitted or made by the Requesting Entity or the Board to any bidder or proposer, or by them to that entity.
2- Procuring Entities may use modern information and communication technology, including electronic means, to the greatest extent possible in carrying out procurement procedures under this Law and the Executive Regulations, in order to achieve greater competition and transparency in procurement.
3- When conducting procurement by electronic means, the Procuring Entity shall:
(a) Ensure that procurement procedures conducted using information technology systems and software, including those relating to the authentication of information, are generally available and interoperable with other information technology systems and software that are also generally available.
(b) Maintain the use of means that ensure the integrity of requests to participate in tenders and of bids, including means for determining the time of their receipt and preventing unlawful access to them.
4- An official website belonging to the Agency shall be established on the internet as a portal for information on all public procurement carried out through the Agency, and shall be the main source of such information. This Law, the Executive Regulations, the instructions, technical directives and other information relating to the procurement system shall be published on this website. All Procuring Entities and tendering entities shall publish announcements and other information relating to such operations on the said website.
5- Bids may be submitted by electronic means where this is provided for in the tender documents.

Article 11

Time Periods
Each Procuring Entity shall set the deadline for submitting bids for any procurement, applications for pre-qualification, or responses to any published invitation to express interest in participating in a limited tender, so as to allow sufficient time for bidders wishing to submit bids, qualification applications or proposals for services to review the announcement addressed to them and respond to it. The period required for this purpose shall be determined in accordance with the guidelines and minimum requirements set out in the Executive Regulations.

Article 12

Drawing Up Specifications
Technical specifications shall afford equal opportunities to bidders and shall not create unjustified obstacles to opening public procurement to competition.
The Executive Regulations shall set out the general rules and principles to be observed in drawing up technical specifications.

Chapter Two
Contracting Methods

Article 13

1- Without prejudice to the respective contracting competences of the Agency and the Requesting Entities in accordance with the provisions of this Law, contracting shall be by way of public tender, whether in a single stage or in two stages.
2- By way of exception, contracting may be carried out by one of the following methods by decision of the Board, based on a reasoned memorandum from the Requesting Entity:
(a) Limited tender, to which a number of technically and financially specialised suppliers or contractors registered with the Agency are invited.
(b) Public or limited practice (competitive negotiation or request for proposals), in which those specialised in the required purpose, or a number of them, are invited, each to submit, after being notified of the specified specifications, one or more financial offers in accordance with the conditions of the practice, in order to select the best offer.
(c) Direct order, by which the required purpose is obtained directly from the market by the Requesting Entity assigning the works or the supply of goods directly to the contractor or supplier.
(d) Collective procurement tenders, electronic practices and framework procurement agreements may be used according to the circumstances and context of the contract and in accordance with the provisions governing those methods in this Law and its Executive Regulations.
3- In no case may a public or limited tender be converted into a public or limited practice or into direct contracting.

Article 14

Contracting by Public Tender
Contracting for the purposes provided for in this Law shall be by way of a domestic public tender, to which invitations are made within Kuwait, or an international public tender, announced both in Kuwait and abroad. The announcement shall be made in the Official Gazette in Arabic, and in at least one foreign language in the case of an international tender, and other widely circulated media may be added. The announcement shall also be made on the Website.
All tenders shall be subject to the principles of publicity, equal opportunity and free competition in accordance with the procedures set out in this Law and its Executive Regulations.

Article 15

Stages of Contracting by Public Tender
First: A public tender may be conducted in a single stage, with technical and financial offers or with a financial offer only, depending on the requirements of the contract concerned. It may, in appropriate cases, be preceded by pre-qualification procedures.
Second: A public tender may be conducted in two stages where it is not practically possible to define fully the technical and contractual aspects of the procurement in order to obtain competitive bids.
In the first stage, the tender documents should set out the purpose, the expected performance, the broad outlines of the specifications and other characteristics required of the equipment or works, and the qualifications required to perform the contract. Bidders shall be invited to submit technical proposals on the basis of these documents.
Third: At the end of the first stage, the entity competent for the tender shall reject proposals that do not meet the essential requirements, the minimum performance or the condition relating to completing the performance of the contract within a specified time, and which cannot be changed to meet them, or which contain weaknesses rendering them substantially non-compliant with the tender conditions.
In the second stage, the Procuring Entity shall invite the bidders whose technical proposals were not rejected to submit their final bids including prices.
Fourth: The tender procedures set out in this Law shall apply to two-stage tender procedures to the extent that they do not conflict with the provisions of this Article.

Article 16

Contracting by Limited Tender
1) Contracting shall be by way of limited tender for contracts which by their nature require participation to be restricted to particular suppliers, contractors, technicians or experts specialised in technical and financial matters, whether in Kuwait or abroad, provided that they meet the conditions of technical and financial competence and good reputation. Their names shall be included in a list prepared by the Requesting Entity from among the suppliers registered with, or contractors accredited by, the Agency for this purpose, after their qualification where necessary, and this shall be announced in the Official Gazette together with the bases and criteria on which the Requesting Entity relied in selecting and qualifying them. This list shall be submitted to the Board for approval, rejection or amendment. Any interested party whose name does not appear on the list may file a grievance with the Board against the decision of exclusion in order to be included in it.
2) The announcement of a limited tender shall be published at least (30) thirty days before the tender documents are issued to the announced bidders, so as to give others qualified for such a tender the opportunity to request to be included in the competition for the tender. The Procuring Entity shall announce its decision before the date set for the tender. The announcement shall also specify the deadline and the means by which other bidders may request to participate in the tender.
Apart from the foregoing, all provisions governing public tenders shall apply to limited tenders.

Article 17

Contracting by Public Practice (Competitive Negotiation or Request for Proposals)
Contracting by way of public practice shall be by decision of the Board, based on a reasoned memorandum from the Requesting Entity, owing to the nature of the goods or works or to circumstances of urgency requiring them to be carried out or purchased by way of practice, in accordance with the conditions laid down by the Executive Regulations, without prejudice to the nature and procedures of practice.

Article 18

Contracting by the Requesting Entity by Limited Practice or Direct Order with the Agency’s Authorisation
First: The Requesting Entity may itself carry out procurement by way of limited practice or direct order, provided that it obtains authorisation to do so from the Agency on the basis of a reasoned written request. The Board’s decision on such a request shall be issued by a two-thirds majority of the members present, in the following cases:
1- Goods that are manufactured, imported or available only from particular entities or persons, or where there is a sole undertaker having the technical ability and resources to provide the required procurement, or having an exclusive right to produce the goods, execute the works or perform the services required, and for which there is no suitable alternative.
2- Goods whose nature, or the purpose for which they are obtained, requires that they be selected or purchased at their places of production.
3- Technical works which by their nature require that they be performed by particular technicians, specialists or experts.
4- To obtain additional quantities of certain goods from their original supplier, or additional equipment or services from the original undertaker who provided them, so that such additional goods, equipment or services partially replace goods or services, or where the required procurement is found in the collective procurement catalogues.
5- Existing equipment, or for its increase and expansion.
6- Where the required works can be obtained from the products, goods, works or services of an entity with social objectives, including any entity marketing for persons with special needs, or a national non-profit public benefit association, or from small and medium enterprises.
Second: Where the Procuring Entity wishes to use the direct procurement method on the basis of any of the preceding clauses, it shall prepare in writing a description of its needs and any special requirements as to the quality and quantity of the required procurement and the terms and time of delivery, and shall request the supplier or undertaker to submit a written offer. It may enter into negotiations with the proposer.
In all cases, the contract shall be in writing.

* Clause (6) was amended by Law No. 74 of 2019. Text of the Clause before amendment:

6- Where the required goods can be obtained from the products of an entity with social objectives, including any entity marketing the products of persons with special needs, or where the goods are the products of a national non-profit public benefit association or the products of small and medium enterprises sponsored by the State.

Article 19

Contracting by the Requesting Entity without the Agency’s Authorisation
First: Public Entities subject to the provisions of this Law may contract for any of the purposes provided for in this Law without the Agency’s authorisation, by the appropriate method in accordance with the circulars issued by the Ministry of Finance in coordination with the National Fund for the Care and Development of Small and Medium Enterprises, according to the needs of the Requesting Entity, if the value of the contract does not exceed KWD 75,000 (seventy-five thousand Kuwaiti Dinars).

Contracting in this manner for the same goods or works may not exceed this threshold during the financial year.
In doing so, they may cooperate with the Procurement Systems Department in accordance with the rules and systems of collective procurement carried out by the said Department.
In applying the provisions of the preceding paragraph, a single transaction may not be split into several transactions with the intent of reducing its value to a level that removes it from the competence of the Agency. The Requesting Entity shall provide the Ministry of Finance with periodic reports every six months on contracts concluded within this threshold.
The said contract value shall be reviewed every five years by decision of the Council of Ministers, with a view to increasing it by a maximum of 20% where necessary.
Second: In cases of extreme necessity, the Board shall take account of the urgency and decide immediately on the request of the Requesting Entity for emergency works where the value of the required works exceeds the said legal threshold. The entity shall promptly notify the Agency of the preliminary procedures it has undertaken, attaching the documents and justifications that gave rise to them. Cases of extreme necessity are as follows:
1) Cases of extreme urgency, provided that this arises from circumstances that the Procuring Entity could not have foreseen and does not result from prior delay on its part, or is not beyond its control.
2) In the event of a disaster giving rise to an urgent need for goods, works or services which makes it impractical to use any of the other procurement methods because of the time that using those methods would take.

* The first paragraph was amended by Law No. 74 of 2019. Text of the paragraph before amendment:

First: Public Entities subject to the provisions of this Law may contract for any of the purposes provided for in this Law without the Agency’s authorisation, by the appropriate method and in accordance with the circulars issued by the Ministry of Finance, according to the needs of the Requesting Entity, if the value of the contract does not exceed KWD 75,000 (seventy-five thousand Kuwaiti Dinars).

Chapter Three
Other Procurement Methods

Article 20

Collective Procurement Tenders
The Procurement Systems Department shall, on the basis of instructions issued by the Ministry of Finance to Public Entities, work to meet the needs of these entities for commonly used goods, works and services, on the basis of the information collected by the Ministry of Finance on such goods, services and works, with a view to inviting collective tenders for the benefit of the Public Entities using them. The procedures specified in this Law and the Executive Regulations shall be followed in inviting and awarding such tenders.

Article 21

Use of the Collective Procurement Catalogue
The Ministry of Finance shall collect information on standard and commonly used goods, services and public works of Public Entities, standardise the specifications of these goods, services and works, and request individual price offers for the said items of goods, services and works, valid for the period specified by the Department in the request for offers. These prices shall be included in the procurement catalogue which it prepares and makes available to the Requesting Entity. These entities may, in accordance with the instructions issued by the Department, make direct purchases on the basis of the specifications and prices contained in this catalogue.

Article 22

Electronic Practice
Electronic practice may be used to purchase ready-made goods readily available in the market, standard small works or small non-consultancy services. These procedures shall apply to the price and to other criteria for evaluating offers and their characteristics whose quantity is measurable arithmetically, and which can be re-evaluated and the new values re-ranked within an electronic environment and reviewed using an electronic device applying automatic evaluation methods.
The Executive Regulations shall set out the rules governing this contracting method.

Article 23

Framework Procurement Agreements
The Procuring Entity may conclude framework procurement agreements in either of the following two cases:
(a) Where there is a need to contract repeatedly to obtain goods or services or to execute small works.
(b) Where the Procuring Entity expects, owing to the nature of any goods, services or works required, that the need to purchase them urgently will arise in the future.
The various materials, services or works must not be listed in the collective procurement catalogue issued by the Ministry of Finance under Article (21) of this Law.
The Executive Regulations shall set out the rules and procedures for contracting under framework procurement agreements.

Part Four
Selection of the Contracting Party and Qualification of Bidders

Chapter One

Article 24

Lists and Registration
The Agency’s General Secretariat shall register the suppliers, contractors, undertakers and technicians classified with the Agency in lists that it prepares for this purpose. Any person registered in these lists must meet the conditions provided for in this Law and its Executive Regulations.
It shall also maintain a register recording the names of persons prohibited from dealing with any Public Entity, whether the prohibition is by provision of law or by administrative decisions issued in application of its provisions. Contracting with persons entered in this register is prohibited. The Agency shall publish these registers by way of internal bulletins and on the Agency’s Website.
The Executive Regulations shall set out the procedures and time limits for submitting registration applications and for their approval by the Board, and the procedures for filing grievances against the decisions issued thereon.

Article 25

The Classification Committee and its Competences
A committee shall be formed by decision of the Central Agency for Public Tenders to classify public works undertakers, composed of:
1- A member of the Board elected by the members of the Board, who shall chair the Classification Committee.
2- A representative of the Ministry of Electricity and Water.
3- A representative of the Ministry of Public Works.
4- A representative of the Public Authority for Housing Welfare.
5- A representative of Kuwait Petroleum Corporation.
6- A representative of the Ministry of Finance.
7- A representative of the Communication and Information Technology Regulatory Authority.
8- A representative of the National Fund for the Care and Development of Small and Medium Enterprises.
None of them shall be of a grade lower than Assistant Undersecretary. The Classification Committee may seek the assistance in its work of such technicians and experts from the various State bodies as it deems fit. The Classification Committee shall be re-formed every three years, and the Agency shall appoint a secretary for this Committee.

* Clause (8) was added by Law No. 74 of 2019.

Article 26

The Classification Committee shall classify public works undertakers into four categories according to their financial and technical capabilities. The Central Agency shall set special conditions to facilitate the entry of owners of small and medium enterprises into the fourth category. The Executive Regulations of this Law shall set out the time limits for submitting applications, the procedures for registration and classification, the conditions for each, the classification categories, their consideration, and the time limits and procedures for filing grievances against the decisions issued thereon. Classification shall be reviewed periodically. Classification does not dispense with the qualification procedures for bidders, and the Requesting Entity shall take such procedures to ensure that the bidders are qualified to perform the contract.

* Amended by Law No. 74 of 2019. Text of the Article before amendment:

The Classification Committee shall classify public works undertakers into four categories according to their financial and technical capabilities. The Executive Regulations of this Law shall set out the time limits for submitting applications, the procedures for registration and classification, the conditions for each, the classification categories, their consideration, and the time limits and procedures for filing grievances against the decisions issued thereon. Classification shall be reviewed periodically. Classification does not dispense with the qualification procedures for bidders, and the Requesting Entity shall take such procedures to ensure that the bidders are qualified to perform the contract.

Government entities shall provide the Agency with final completion reports on contracts concluded through the Agency.

Article 27

The Classification Committee shall register the contractor in the category consistent with its financial and technical standing and its previous works. It shall issue its decision within one month of the submission of the classification application, and any application on which no decision is issued by the Classification Committee within this period shall be deemed rejected. The Classification Committee shall notify the applicant of its decision within one week of its issuance. The applicant may file a grievance with the Classification Committee against a classification decision refusing its registration or classifying it in a lower category than that requested, within two weeks of the date of being notified of the decision.
If the Committee rejects its request, the applicant may file a grievance with the Board within one week of the date of being notified, and the Board’s decision shall be final.

Article 28

A bidder, unless it is a first-category contractor, shall not be permitted to contract for public works whose total value exceeds the maximum limit licensed for it, nor may tenders be awarded to it whose value, when added to the works remaining with it at the time of opening the envelopes, exceeds the maximum limit in total.

Article 29

A single person or a group of persons acting together may not register under more than one name upon classification, or submit more than one bid in a tender, except for alternative bids where the tender conditions permit their submission.
However, a person holding interests in companies that are separate from one another, each company being independent in its legal personality, finances, engineers, employees and general administrative apparatus, may, upon classification, register himself and register each of his independent companies.
The bid of a bidder violating this Article shall be deemed void by operation of law.

Article 30

A contractor may, one year after its classification, request the Classification Committee to reconsider the category to which it belongs and to upgrade it to a higher category.
The period required to move from the second category to the first category shall be at least five years.

Chapter Two

Article 31

General Conditions of the Contracting Party
Subject to Law No. (1) of 2016 and Law No. (116) of 2013 referred to above, and to the provisions of the relevant international agreements, any person submitting a bid in public or limited tenders, or in cases of practice and direct contracting, must meet the following:
First: Be an individual or a company registered in the Commercial Register.
Second: Be registered in the register of suppliers or contractors, or as the nature of the tender, practice or direct contracting requires. Where the bidder is foreign, the provisions of Clause First of this Article and the provisions of Article (23) of Decree-Law No. (68) of 1980 referred to above shall not apply to the bidder.

* Amended by Law No. 1 of 2024.

Chapter Three

Article 32

Pre-qualification
A bidder shall not be considered qualified to be awarded the tender, or to participate in the tender where bidders are pre-qualified, unless it meets the conditions stipulated in the tender documents or within the pre-qualification requirements. The Executive Regulations shall set out the rules and procedures for qualification.

Part Five
Invitation to Tender and Submission of Bids

Chapter One
Competences of the Requesting Entity

Article 33

Government entities shall prepare and publish their binding annual plans for supply, works and services contracts, and shall prepare a schedule of the tenders and pre-qualifications they will invite, at least (90) ninety days before inviting them, together with a summary of the tender or pre-qualification. Accordingly, contracting for the purpose of exhausting budgetary appropriations is prohibited, and contracting in the last month of the financial year is prohibited except in exceptional cases required by the necessities of work and with the approval of the Minister supervising the competent government entity.

Article 34

Before inviting tenders for contracting, the entity shall obtain the necessary approvals and licences relating to the subject of the contract from the relevant authorities in accordance with the laws and decisions so providing.
The Agency shall verify that these are in place before announcing the request for contracting.

Article 35

The Agency shall, at the request of the Requesting Entity, announce the tender (and equivalent procedures) in the Official Gazette and on its Website. The Agency shall determine the appropriate period for submitting bids, running from the date of the announcement in the Official Gazette. The shortest possible validity period of bids after their opening shall be set, such period not to exceed (90) ninety days. The announcement shall state the date set for depositing bids (closing date), their validity period, the goods or works to be supplied or executed, the price of a copy of the tender document, and the place where bids are to be submitted (the Agency’s premises).

Article 36

Based on the annual plans announced by the Requesting Entities, contracting shall be within the limits of the actual needs necessary for the conduct of work or production, on the basis of realistic and objective studies prepared by the Requesting Entity, taking into account stock levels, past historical requirement rates and consumption rates and allowances. Contracting for goods of which similar types, or substitutes that serve the purpose, are held in stores is not permitted unless they are actually allocated, or held in reserve, for use by any entity. The competent entity shall use automated stock-control systems for this purpose.
Before inviting tenders, the Requesting Entity shall demonstrate the availability of the allocated budgetary appropriations and ensure the availability of the funding needed to pay the value of interim payment certificates on their legally prescribed dates. The Agency shall verify their availability before announcing the request for tender.

Article 37

Before inviting tenders, goods shall be divided into homogeneous groups, taking into account the classification and coding manual for commodity stocks as determined by the standards and metrology authority accredited by the Public Authority for Industry in the State of Kuwait. To ensure equal opportunities, reference to the type, description or number in the lists of suppliers or of those classified by name shall be avoided, and no particular brand, or specifications that apply to special or distinctive models, may be mentioned, failing which the procedure shall be void.
Nor may the minimum number of classified manufacturers or suppliers be less than three manufacturers or suppliers.
This shall not apply where required by the circumstances of supplying spare parts or specific operating requirements, or any materials or goods whose nature or circumstances of supply so require.
In the event of a violation, any interested party may object and file a grievance in accordance with the rules set out in this Law.

Chapter Two
Announcement of the Invitation to Tender, to Submit Proposals or to Apply for Pre-qualification

Article 38

The announcement of the invitation to tender, to submit proposals or to apply for pre-qualification shall be published in the Official Gazette and on the Agency’s Website not less than (30) thirty days before the set date. The announcement shall also specify the deadline. In addition, the announcement may be published in a periodical trade publication or in appropriate technical or professional journals. The Executive Regulations shall specify the cases in which publishing announcements over the internet on the public procurement website shall be deemed to satisfy the publication requirements provided for in this Law, and shall also specify the content and particulars of the invitation to pre-qualify or to participate in a public tender, as well as the cases in which publication must be made in at least one foreign language in addition to Arabic.

Chapter Three
Tender Documents and Bid Particulars

Article 39

1) Before inviting public tenders for the supply of goods or for works, and after the final designs have been prepared and the design works separated from the construction works, the Requesting Entity shall prepare the tender documents and set detailed specifications for each item or for the performance of each work, the scope of the procurement, and the time and place set for performing the contract, as well as the bid evaluation criteria. It shall also set out the necessary instructions to contractors, the drawings and the precise bills of quantities showing the individual items, and the price schedules. International standard specifications and government supply specifications shall be observed in this regard.
2) The Executive Regulations shall specify the cases in which fees are charged for providing the tender documents to those wishing to participate, which fees shall reflect only the cost of copying and distributing the tender documents. Owners of small and medium enterprises shall be exempt from these fees.
3) Where tenders are invited on the basis of technical and financial offers, the documents shall include the complete and clear technical requirements for this type of tender, as well as the bases and criteria of evaluation according to which the financial offers will be compared, the procedures to be followed in performing the contract, and the penalties that may be imposed in the event of breach of the provisions of the contract or delay in its performance.
4) Where tenders are invited on the basis of samples, their weight, size or volume shall be specified, and for goods to be supplied in containers, the type, capacity and specifications of such containers shall be stated.
Tenders shall be invited on the basis of the Requesting Entity’s model samples in cases where it is not possible to describe the subject of the contract precisely, and in such case a model may be sold to bidders.
In works contracts, the preparation of the necessary technical drawings shall be included.
The tender form and the conditions of contract shall include the guarantees, the agencies in contracting and other general conditions.
5) All bidders participating in the procurement procedures shall be informed without delay of any amendments to or clarifications of the pre-qualification documents or tender documents, so as to give bidders the opportunity to take such amendments or clarifications into account when preparing their pre-qualification applications or bids. Where giving bidders such opportunity so requires, the Requesting Entity shall postpone the deadline for submitting pre-qualification applications or bids. Any amendment to the tender documents or postponement of the deadline for submitting bids shall be announced immediately through all means of publication and announcement adopted by the Agency.
6) The Executive Regulations shall set out the procedures and conditions for inviting public and limited tenders and practices and for submitting bids, and the rules for publishing all of the above using information and communication technology.

* Clause (2) was amended by Law No. 74 of 2019. Text of the Clause before amendment:

2) The Executive Regulations shall specify the cases in which fees are charged for providing the tender documents to those wishing to participate, which fees shall reflect only the cost of copying and distributing the tender documents.

Chapter Four
Submission and Confidentiality of Bids

Article 40

1) The bid shall be submitted in writing and signed on the official tender documents issued to the bidders, which may not be transferred to others.
2) Bids shall be returned completed and complete in all respects in accordance with the conditions set out in the tender documents, and the bidder shall not make any amendment to the tender documents.
3) The documents shall be placed in the official envelopes designated for them, which shall be securely sealed. Torn, damaged or defaced envelopes shall not be accepted. If the official tender envelope is damaged, defaced or lost, the bidder shall obtain another envelope in its place in which to submit the bid, subject to Clause Four of this Article.
4) No bid received after the deadline for submitting bids may be accepted.
5) No bid bearing any mark or sign may be accepted.
6) Electronic means may be used to complete all or some of the foregoing procedures, provided that they satisfy all the foregoing conditions and requirements, where appropriate to the subject of the tender.
Any bid that violates the provisions of Clauses (2) and (3) shall be void, unless the members of the Board unanimously decide to accept it for considerations relating to the public interest.
The Executive Regulations shall set out the rules and procedures for the delivery and receipt of tender documents.

Article 41

Submission of Samples
Where the tender documents require samples of goods or items to be submitted, the bid shall not be acceptable unless accompanied by the required samples.
The Board may instruct the Agency’s technical sector to examine the samples in the submitted bids from a technical standpoint and their conformity with the announced conditions, and to verify that the conditions of technical competence are met. The Administration may seek the opinion of such experts as it deems fit. The technical sector shall submit reports on the results of its examinations and its recommendations to the Agency’s Board.
The Executive Regulations shall set out the conditions and procedures for the delivery and examination of samples.

Article 42

Confidentiality of Documents
All bid documents shall be confidential until the date of opening the envelopes and deciding on them. All staff of the Procuring Entity shall maintain such confidentiality and shall not disclose the particulars of any bid or any act of the tender. This obligation shall apply to anyone who has had access to these documents or to any tender procedure by virtue of his position. Any person responsible for breaching the confidentiality of a bid shall be subject to disciplinary accountability, without prejudice to any measure provided for in any other law.

Chapter Five
Technical and Financial Offer Documents

Article 43

The tendering conditions for tenders requiring a technical offer and a financial offer shall stipulate that bids be submitted in two sealed envelopes, one for the technical offer and the other for the financial offer.
The Executive Regulations shall specify the particulars, contents and attachments of the technical envelope and of the financial envelope separately.

Chapter Six
Pre-bid Meeting

Article 44

Where the Procuring Entity decides to hold a clarification session regarding any tender or practice, the announcement of the session shall include the date and place of the session, so that it may be attended by those who have purchased the tender or practice document and wish to attend.
The Requesting Entity shall circulate the replies immediately to all bidders without disclosing the source of the enquiry.
The Executive Regulations shall set out the rules and procedures for the pre-bid meeting.

Chapter Seven
Bid Bond

Article 45

Submission of the Bid Bond
The bid shall be accompanied by the bid bond. Where the tender is under the two-envelope (technical and financial offer) system, the bidder shall attach to its technical bid the bid bond stipulated in the announced tender conditions. This bond shall be in the form of a certified cheque or a letter of guarantee from a bank accredited in the State of Kuwait, issued in the name of the bidder in favour of the Agency, and not subject to any restriction or condition. Bids not accompanied by this bond shall be disregarded, even if technically acceptable.
The bond shall remain valid for the validity period of the bid.
The Executive Regulations shall set out the conditions and arrangements relating to the bid bond and the procedures to be followed in respect of it.

Chapter Eight
Provisions on the Validity of Bids

Article 46

Bid Validity Period
The bid shall remain in force and irrevocable from the time of its submission until the end of its validity period, and no amendment to prices shall be considered after the submission of the bid.
The tender shall be awarded and the contract signed within a period not exceeding three months from the date of expiry of the bid submission period.
If the Board is unable to decide on the bids within the period set for their validity, it shall request the bidders to accept the extension of the validity of their bids for a further period not exceeding an equal period, by way of a letter addressed by each of them to the Board agreeing to the extension and renewing the period of the bid bond. The bid of any bidder who does not accept the extension of its validity period shall be excluded.

Article 47

Submission of Alternative Bids
If the tender permits the submission of alternative bids and the bidder wishes to submit one or more alternative bids, it shall obtain another set of the official tender documents for each alternative bid submitted, and shall write clearly on each set of these documents that it constitutes an alternative bid.
The bid of a bidder violating this Article shall be deemed void by operation of law.

Part Six
Procedures for Deciding on the Tender and Signing the Contract

Chapter One

Article 48

Opening of Envelopes
Bid envelopes shall be opened at the time and place specified in the tender documents, in a public session attended by the bidders or their representatives, and broadcast live on the Agency’s Website.
The Executive Regulations shall specify the date, place and procedures for opening the envelopes.

Article 49

Referral of Technical Bids and Reasons for their Exclusion
The Agency shall refer the technical bid envelopes to the Requesting Entity to study them and submit its recommendation thereon to the Agency within (30) thirty days of the date of referral. The Requesting Entity may, in the case of major and technically complex projects, request the extension of this period up to a maximum of (60) sixty days, for reasons accepted by the Agency.
The envelopes shall be returned, and the Board may seek the opinion of the Agency’s technical sector where necessary. The financial envelopes of these offers shall not be opened until the technical recommendation thereon has been received. The financial envelopes of technically unacceptable offers shall be returned unopened to their owners.
The Requesting Entity shall state in sufficient detail the deficiencies and departures from the conditions and specifications in the bids which, upon study, are found to be technically unacceptable.

Article 50

Examination of the Technical Offer and of Samples
The Board may decide to refer the technical offers of acceptable bids to a special technical committee formed by it for this purpose. The technical committee shall study them alone or jointly with the Requesting Entity, as the Board deems fit.
In the case of the supply of goods requiring technical examination to verify their suitability, samples shall be submitted for examination and the result of the examination shall be presented to the Board at the session set for deciding on the tender.
A period of time, specified by the Executive Regulations, shall be allowed to elapse for accepting or excluding technical offers, which shall be published on the Agency’s Website, all in accordance with the rules set out in the Executive Regulations.

Article 51

Opening of Financial Envelopes
Bidders whose offers are technically acceptable shall be notified of the date and place of the session for opening the financial envelopes.
The Board shall meet at the date and place specified in the Executive Regulations to open the financial envelopes, and shall open the envelopes directly following the same procedures provided for in the Executive Regulations for opening the technical envelopes, after verifying the integrity of the financial envelopes and the presence of the bid number and the Agency’s seal previously affixed to each envelope at the technical envelope opening session.

Article 52

Announcement of Price Tabulation Sheets
The Agency shall announce the tender price tabulation sheets by electronic means and by any other means enabling the competitors to view them. The Executive Regulations shall set out the period of announcement and any other details.

Article 53

Evaluation Bases and Criteria for Comparing Bids
1- The Board shall, upon the proposal of the Requesting Entity, approve the system for determining the criteria on the basis of which bids are compared, provided that such criteria are objective and, where possible, quantifiable. Cost shall be the principal criterion in comparing offers.
2- In contracts whose technical nature requires offers to be evaluated by a points system, the tender documents shall include the elements and bases of evaluation. In this case, the evaluation points and the minimum technical acceptance threshold shall be determined before the technical envelopes are opened, and the bids shall be ranked by dividing the financial value of each bid by the total technical points it obtained. These conditions may not be amended after the tender has been invited.
3- The technical sector of the Requesting Entity shall calculate the cost of the technical offers and compare and rank them after unifying the bases of comparison in financial terms, by assigning a monetary value to non-price elements, provided that the conditions booklet discloses these elements, the most important of which are the conditions for providing warranty, maintenance, spare parts and operating requirements, payment and delivery terms, and other non-price elements affecting the determination of the comparative financial value of bids according to the circumstances and nature of the subject of the contract. It shall submit its recommendation on the award to the Board for decision.
4- Where necessary, and before deciding on the bid, the Board shall be guided by the most recent prices previously dealt with locally or abroad and by market prices, and by any other elements it considers useful in showing the extent to which the value of the bids is high or low.
It shall also be guided by comparing the quantities submitted in the tender with the average quantities in contracts approved in previous tenders.
The Executive Regulations shall specify the main evaluation elements that must be included in the conditions booklet.

Chapter Two
Re-tendering or Cancellation of the Tender

Article 54

Sole Bid
The Board may accept a sole bid if it conforms to the conditions and is reasonable in price. A bid shall also be deemed a sole bid if other bids that do not conform to the conditions were submitted with it.
Nevertheless, the Board may, with the approval of two-thirds of its members present, re-invite the tender if there are reasons warranting this.

Article 55

Cancellation of the Tender
The tender may be cancelled, before it is decided upon, by a reasoned decision of the Agency’s Board by a two-thirds majority of its members on the basis of a reasoned letter from the Requesting Entity, and cancellation shall be by reasoned decision of the Requesting Entity where it conducts the procedures itself, in the following cases:
1- If all the bids are accompanied by substantial reservations.
2- If the value of the lowest bid exceeds the estimated value of the contract or exceeds the amount of the budgetary appropriations available to fund the procurement contract, guided by the most recent prevailing market prices.
3- If all the bids submitted are substantially non-compliant with the conditions set out in the tender documents.
4- If the subject of the contract (goods – services – works) is no longer needed, such that there is no interest in continuing the procedures.
5- If collusion between bidders or parties connected with the tender is proven.
6- If the winning bidder withdraws and it is not possible or appropriate to re-award the tender to the next bidder.
7- If a serious deficiency or error is discovered in the tender documents such that there is no longer any point in continuing the procedures.
The rejection of all bids and the reasons for it shall be recorded in the procurement proceedings record.
All participants in the tender shall be informed of its cancellation as soon as possible, and the amounts paid for purchasing the tender documents shall be refunded to them.
All cancellation decisions shall be published in all the means of publication in which the tender was announced and on the Agency’s Website.

Chapter Three
Award Procedures

Article 56

General Provisions
1- In cases not requiring technical examination, the Agency shall immediately award the tender to the lowest-priced bid that conforms to the requirements of the tender documents, in accordance with the rules and procedures set out in the Executive Regulations.
2- In tenders with technical and financial offers requiring highly complex technology, a high engineering standard, precise technical specifications and high cost, the tender shall be awarded to the bidder who has met the technical conditions and whose bid is the lowest in cost, after the bids have been evaluated in all technical and financial respects. In this case, the Board shall disclose the result of the decision on the technical bid after the technical evaluation process has been fully completed. Any person aggrieved by the evaluation decision may file a grievance against it in accordance with the provisions of this Law, where applicable.

Article 57

Pricing and Correction of Errors
All bids shall be priced in the Official Currency unless the tender documents provide otherwise. The total price stated in the form of bid is the price adopted by the Board, regardless of any figures that may appear in the general summary or elsewhere in the tender documents and regardless of any errors made by the bidder in calculating its total price, and the bidder shall not be permitted to make any amendment to this price after submitting its bid. If the arithmetical error exceeds 5% of the total price, the bid shall be excluded unless the Board decides, by unanimous vote of the members present, to accept it for considerations relating to the public interest.
If the amount written in figures differs from the amount written in words, the Board shall adopt the lower amount. If, upon checking any bid, it is found that the unit prices and breakdowns do not match the total price, the total price shall prevail, unless the error in it is an excess over the sum of the unit prices and breakdowns, in which case the correct sum shall be relied upon.
The Executive Regulations shall set out the rules and procedures for pricing.

Article 58

Abnormally Low Bids
The tender shall be awarded to the bidder who submitted the lowest total price if its bid is consistent with the requirements of the tender documents. Nevertheless, the Board may, by a decision issued by a two-thirds majority of its members present, award the tender to a bidder who submitted a higher total price if the prices of the lowest bidders are substantially low and fall by an unjustified percentage below the estimated value of the tender budget approved by the Requesting Entity.
The Board shall be guided by the most recent prices previously dealt with locally or abroad and by market prices, and shall record in its minutes the measures it has taken to ascertain market prices.
Before rejecting the lowest bid, a written request shall be addressed to the lowest bidder or to the best low bidders, one after the other if necessary, to explain the details of the components of the bid considered relevant to its low price.
The Executive Regulations shall set out the rules and procedures for such review.

Article 59

Multiple Similar Tenders
Where several similar tenders are invited for the same Requesting Entity and their documents provide that no more than one tender may be awarded to a single bidder, the subsequent bidders shall be accepted to execute the tenders at the lowest price submitted in those bids.
The Requesting Entity shall, as far as possible, invite these tenders in groups and at different intervals. The decision to exclude bids and award the tender shall state the reasons on which it is based.

Article 60

Price Balancing
If, upon checking, some unit prices are found to be excessively high or low, the Board, or whomever it delegates for this purpose, shall adjust them with the winning bidder before awarding the tender to it, within the limits of the total price of the tender, on the basis of a reasoned memorandum from the Requesting Entity.
If the bidder does not accept the adjustment or refuses to correct an obvious arithmetical error in its bid, the Board may, by reasoned decision, exclude its bid and consider it to have withdrawn, in which case its bid bond shall be forfeited and the tender awarded to the next-ranked bidder, provided that the latter meets all the conditions for award, unless there is a reason in light of which the tender is to be cancelled or re-invited.

Article 61

Division of the Tender
If the prices of two or more bids are equal and the tender is divisible, the Board may divide the announced quantities among the bidders with equal bids, provided that they agree and that the interest of the work is not harmed.
Where the tender is not divisible and the prices of the offers are equal, lots shall be drawn among them.

* Amended by Law No. 74 of 2019. Text of the Article before amendment:

Division of the Tender and Consideration for Small and Medium Enterprises

If the prices of two or more bids are equal and the tender is divisible, the Board may divide the announced quantities among the bidders with equal bids, provided that they agree and that the interest of the work is not harmed.

Where the tender is not divisible and the prices of the offers are equal, lots shall be drawn among them.

The Executive Regulations shall set out rules for granting preference to bids submitted by owners of small or medium enterprises, if any, where they conform to the conditions and specifications.

Article 62

Local Product Preference
Taking into account the international and regional agreements concluded with the State of Kuwait and the application of the principle of reciprocity, priority in the procurement of Public Entities shall be given as follows:
1- In supply tenders, or their equivalent, the Board or the Requesting Entity shall award to the offer of a local product where it conforms to the specifications and conditions and the prices offered do not exceed the lowest prices offered for similar imported products by more than 20%.
2- The products referred to in the preceding clause must conform to the specifications of the authorities competent to set and approve the standards and specifications applicable in the State of Kuwait; failing these, the approved GCC standards and specifications shall apply; and failing these, international specifications.
After the tender has been awarded, the local product on the basis of which the award was made may not be replaced by an imported product except with the approval of the Board.

* Amended by Law No. 74 of 2019. Text of the Article before amendment:

National Product Preference

Taking into account the international and regional agreements concluded with the State of Kuwait and the application of the principle of reciprocity, priority in the procurement of Public Entities shall be given to the national product.

In supply tenders, or their equivalent, the Board or the Requesting Entity shall award to the offer of a national product where it conforms to the specifications and conditions and the prices offered do not exceed the lowest prices offered for similar imported products by a percentage specified by the Executive Regulations and in accordance with the decisions issued in this regard.

The products referred to in the preceding paragraph must conform to the specifications of the GCC Standardization Organization approved by the purchasing State, or the specifications applicable in the State, if any; failing any of these, international specifications shall apply.

After the tender has been awarded, the national product on the basis of which the award was made may not be replaced by an imported product except with the approval of the Board.

Article 62 bis

The Board or the Procuring Entity shall award to bids submitted by owners of small or medium enterprises where they conform to the specifications and conditions and the prices offered do not exceed the lowest acceptable bid by more than (20%).

* Added by Law No. 74 of 2019.

Article 63

Notification of the Relevant Entities and the Winning Bidder of the Result of the Tender

The Agency shall notify the Requesting Entity of the result of the tender, and the Requesting Entity shall reply with its comments on the award within a period not exceeding ten days from the date of receiving the notification.
After the State Audit Bureau has approved the award, the Agency shall notify the winning bidder in writing, with acknowledgement of receipt, of the acceptance of its bid and the award of the tender to it within one week, and a copy of this letter shall be sent to the Requesting Entity.
The decision shall be published in the Official Gazette and on the Agency’s Website immediately upon its issuance.
The Executive Regulations shall set out the rules and procedures for notification.

Article 64

Withdrawal from Contracting
The award of the tender and the notification of the winning bidder thereof shall not give rise to any right for it against the State in the event of withdrawal from contracting by a reasoned decision of the Agency’s Board, on its own initiative after obtaining the opinion of the Requesting Entity, or on the basis of a reasoned memorandum from that entity. In both cases, the decision shall be issued by a two-thirds majority of its members, in accordance with the provisions of this Law. The winning bidder shall be considered a contracting party only from the date of signing the contract.

Chapter Four
Performance Bond

Article 65

Submission of the Performance Bond
The Requesting Entity shall notify the winning bidder to submit the performance bond ten days after the award. If it does not submit it within one month from the date of notification, it may be considered to have withdrawn, unless the Requesting Entity decides to extend the time limit for a further equal period, once only.
The performance bond shall be in the form of a letter of guarantee from a bank accredited in the State of Kuwait, issued in the name of the winning bidder in favour of the Requesting Entity, not subject to any conditions or reservations, and valid from the time of its issuance until three months after the expiry of the contract performance period, unless the tender conditions provide for a longer period. The value of the performance bond shall be a percentage of the total contract value determined by the Executive Regulations and stated in the tender documents.
The performance bond shall secure the performance of the contract and shall be returned immediately upon completion of performance without request, unless it is due to cover any rights of the Public Entity arising from the performance of the contract.
The Requesting Entity shall provide the Agency with a report confirming the completion of the contract and any penalties imposed accordingly on contractors and suppliers, if any.
The Executive Regulations shall set out the conditions and arrangements relating to the performance bond and the procedures to be followed in respect of it.

Article 66

Forfeiture of the Bid Bond
If the winning bidder fails to sign the contract within the time set for it, or to submit the performance bond, or withdraws for any other reason at any stage of the tender, it shall forfeit its bid bond, in addition to any other penalty imposed by the Board in accordance with the provisions of this Law.

Article 67

Performance of the Contract before Provision of the Bond
The performance bond shall not be provided if the successful bidder supplies all the items awarded to it for supply and the Requesting Entity finally accepts them within the time limit set for providing the performance bond.

Article 68

Failure to Sign the Contract
The Public Entity owning the project shall request the winning bidder to attend to sign the contract within (30) thirty days from the date of submitting the performance bond.
If it does not come forward to sign the contract within this time limit without acceptable reasons, it shall be considered to have withdrawn and shall forfeit the performance bond, unless the Requesting Entity decides to renew the time limit for an equal period if the delay is attributable to it or for an excuse it accepts.
This is without prejudice to the right of the winning bidder to compensation for damage suffered after submitting the performance bond if the delay in signing and performing the contract is unjustified or attributable to an error on the part of the Requesting Entity.

Article 69

Return of the Bid Bond
When the bidder to whom the tender is awarded submits the performance bond and signs the contract, the bid bond it provided shall be returned to it, and the bid bonds of the bidders to whom the tender was not awarded shall also be returned to them.

Article 70

Forfeiture of the Performance Bond after Contracting
In all cases of termination of the contract, and in the case of its performance at the contracting party’s expense owing to its gross errors, the performance bond shall become the property of the Requesting Entity, which may also deduct the penalties due to it under the contract and the value of any loss it suffers from any amounts due or becoming due to the contracting party with it. If these are insufficient, it shall deduct them from the contracting party’s entitlements with any other government entity, whatever the cause of entitlement, without the need to take any judicial proceedings, all without prejudice to its right to have recourse against the contracting party before the courts for any rights it has been unable to recover administratively.

Article 71

Subcontracting
1- The contractor may contract with a subcontractor to whom it entrusts part of its obligations relating to the performance of the contract, in accordance with the competences provided for in the tender instruments, after obtaining the prior written approval of the Requesting Entity for each subcontract separately.
2- Subcontracting shall not limit the responsibility of the original contractor for the performance of the contract, and subcontracting shall be conditional upon the subcontractor being qualified to perform the same obligations incumbent upon the original contractor under the original contract with the Public Entity.

Article 72

Withdrawal of the Winning Bidder
If the winning bidder withdraws, the Agency shall, on the basis of a reasoned request from the Requesting Entity, consider cancelling the tender, re-inviting it or awarding it to the next-lowest bidder, and the withdrawing bidder shall be penalised by forfeiture of the bid bond. If it withdraws more than twice, Article (85), paragraphs (b) and (c), of this Law shall apply to it.

Article 73

Publication of Decisions
The Agency shall announce the reasons for decisions on award, cancellation or exclusion of bids in the Official Gazette and on the Agency’s Website.

Part Seven

Article 74

Variation Orders
The Requesting Entity may not issue variation orders in respect of contracts tendered under the provisions of this Law whose non-algebraic sum of values, whether by way of increase or decrease, exceeds (5%) five per cent of the total contract value, except with the approval of the Agency’s Board of the request within a period not exceeding one month from the date of its submission. Approval shall be issued on the basis of a reasoned memorandum from the Requesting Entity accompanied by the opinion of the entity supervising the execution, if any.

Article 75

Adjustment of Contract Prices
Contract prices may not be adjusted, upwards or downwards, in the event of a change in the prices of the main materials included in the tender items whose prices are determined internationally, except in accordance with a formula stipulated in the documents and in the concluded contract, and the matter shall be submitted to the Board to approve the adjustments made.
The Board shall be guided by the international price indices for these materials or by the decisions issued by the official authorities of the State setting their prices.

Article 76

Financial Appropriation for Variation Orders

In all cases where variation orders are issued in accordance with the two preceding Articles, a financial appropriation must be available to the Requesting Entity.

Part Eight
Consideration of Complaints and Grievances

First: Complaints

Article 77

Complaint Procedures and Decisions Thereon
The procedures for submitting and deciding on complaints shall be as follows:
1- Any bidder that has suffered loss or damage as a result of a breach by any Procuring Entity or tendering entity of any obligation imposed on it under the provisions of this Law or the Executive Regulations issued pursuant to it may, in accordance with the provisions of this Law, submit a complaint at any stage of the procurement procedures requesting a review of the action complained of, or of the failure to take action where the damage results from such failure.
2- Any interested party may, until the closing of bid submission, submit a complaint to the Procuring Entity concerning any deficiency in the preparation of the technical tender documents or their general conditions that undermines the rules of equality, fairness and equal opportunity. The Procuring Entity shall decide on the complaint within (7) seven working days of its submission, record its decision in the minutes of the meeting and notify the complainant of it in writing immediately upon its issuance.
The said entity shall take the necessary action to avoid errors if their occurrence is proven, and to correct and ensure the integrity of the tender procedures.
3- Where the matter relates to procurement procedures that have not yet resulted in a procurement contract, or where the procurement contract resulting from them has not yet entered into force, the complaint shall be submitted to the head of the Requesting Entity if those procurement procedures fall entirely within its competence, or to the Chairman of the Agency if the procedures were issued by one of its committees or by the Agency itself.
4- The complaint shall be submitted in writing, and the head of the Procuring Entity shall not consider the complaint unless it is submitted within (7) seven days from the date of publication of the decision or action complained of, or from the date of notification of the interested parties thereof, whichever is earlier.
5- Once the complaint has been submitted, the head of the Procuring Entity, the Board or the Agency’s committees, according to their competence over the matter, may suspend the procurement procedures and, within (7) seven working days after the date of submission of the complaint, issue a written decision thereon stating the reasons on which the decision is based.
6- If the decision is in favour of the complainant, upholding its complaint, the decision shall set out the necessary corrective measures to be taken by the Requesting Entity or by the Board, each within its competence, and the measures necessary to ensure the integrity of the tender procedures.
7- Any decision on the complaint shall be recorded in the procurement proceedings record.
8- Complaints against decisions issued by the Agency shall be submitted to the Board for decision.
9- The Executive Regulations shall regulate the procedures for submitting and deciding on complaints in accordance with the provisions of this Law.

Second: Grievances

Article 78

A Grievances Committee for grievances against the decisions of the Board shall be established and attached to the Council of Ministers, composed of five members who are specialised legal, financial and technical experts, named by decree, upon the nomination of the Competent Minister, for a non-renewable term of three years.
The Committee shall study the grievances submitted to it, decide on them and issue a binding decision on the grievance within seven working days of its submission to it, and the Agency shall be notified of the decision for implementation.
Any interested party may file a grievance with the Grievances Committee against the decisions of the Board within seven working days from the date of their publication or of the notification of the interested parties thereof, whichever is earlier.
The Agency shall provide the Committee with the documents and information relating to the grievance before the Committee immediately upon the Committee’s request.
The Executive Regulations shall regulate the procedures for submitting, studying and deciding on grievances, notifying the grievant and the Agency of the Committee’s decision, and the cases in which grievance fees are refunded, in accordance with the provisions of this Law.

* Amended by Law No. 74 of 2019. Text of the Article before amendment:

A Grievances Committee attached to the Council of Ministers shall be established by decision of the Council of Ministers. It shall consist of (five) members and shall be formed of specialised legal, financial and technical experts. The term of membership of the Committee shall be three years, non-renewable. It shall be competent to consider the grievances submitted to it. Where a grievance is upheld, the decision shall set out the necessary corrective measures, and the Committee shall notify the Chairman of the Agency of it within seven days from the date of referral of the grievance to it.

Any interested party may file a grievance with the Grievances Committee against the decisions of the Board within seven working days from the date of their publication or of the notification of the interested parties thereof, whichever is earlier.

The Executive Regulations shall regulate the procedures for submitting and deciding on grievances and notifying the grievant thereof, in accordance with the provisions of this Law.

Article 79

Judicial Jurisdiction and Litigation Procedures
The General Assembly of the Court of First Instance shall designate one or more chambers of the Administrative Circuit to have jurisdiction over cases relating to public tenders (and equivalent procedures) among public procurement operations, and the administrative disputes related to them or arising from them.
One or more specialised circuits shall be constituted at the Court of Appeal to hear appeals against judgments issued by the Administrative Circuit referred to in the first paragraph, and their judgments shall be final and not subject to challenge by any means of challenge.
The Court of First Instance shall assign one or more judges to rule on an interim basis, without prejudice to the merits of the right, in urgent matters relating to the cases and disputes referred to in the first paragraph, as well as interim enforcement disputes, and the issuance of orders on petitions, interim orders and payment orders relating to them.
The Civil and Commercial Procedures Law and the laws supplementing it shall apply to actions brought under the provisions of this Law, in respect of matters for which no special provision is made herein.

Article 80

By way of exception to the rules on the service of judicial documents provided for in the Civil and Commercial Procedures Law, judicial documents relating to the civil, commercial and administrative disputes provided for in this Law may be served by fax or e-mail.
The Minister of Justice shall, in coordination with the Communication and Information Technology Regulatory Authority, issue a decision setting out the conditions and rules for regulating the service procedures, the types of devices and software used to effect such service, the forms and format of summonses and notifications and replies to them, and the method of paying the judicial fees prescribed for them. Violation of the provisions of this Article shall entail nullity.

Article 81

By way of exception to the provisions of Articles (49, 59 and 91) of the Civil and Commercial Procedures Law, the following shall apply:
1- At the request of the defendant, the court shall rule that the action be deemed void if the defendant has not been summoned to appear within (30) thirty days from the date of filing the statement of claim with the Court Registry, where this is attributable to the act of the plaintiff.
2- If neither the plaintiff nor the defendant attends the first hearing or any other hearing, the court shall rule on the action; otherwise it shall order it struck off the roll, after verifying the validity of service. The court shall order the action struck off the roll if both parties attend and agree to strike it off. If the plaintiff or appellant fails to attend for the second time, the court shall, instead of striking off the action, deem it void. If the absent party attends before the end of the hearing, the striking off shall be deemed not to have occurred.
3- The court shall rule that the action be deemed void if the parties do not attend after its resumption, or if neither party serves notice on the other to resume the action within (30) thirty days of its being struck off. The period of striking off shall be included in calculating this time limit if repeated, even if not consecutive. The time limit shall be deemed observed only if the notice reaches the opposing party before its expiry.
4- The action may be stayed by agreement of the parties not to proceed with it for a period not exceeding (60) sixty days from the date on which the court approves their agreement. Such a stay shall have no effect on any mandatory time limit set by law for taking a procedural step.
If neither party gives notice to resume the action within the (15) fifteen days following the expiry of the period, whatever the duration of the stay, the plaintiff shall be deemed to have abandoned its action and the appellant to have abandoned its appeal.

Part Nine
Prevention of Conflicts of Interest, Accountability and Penalties

Chapter One

Article 82

Prevention of Conflicts of Interest

The Executive Regulations shall include a system and rules for preventing conflicts of interest, binding on all those participating in taking decisions concerning the competences of the Agency or matters falling directly within the competences of the Requesting Entities, which the Agency shall publish on its Website and through other available means of publication. These Regulations shall in particular include the following:
1- Requiring Board members, Agency employees, employees of the Requesting Public Entities and any person participating in tender works to refrain from participating in any of the procedures if he has a direct or indirect interest in the operation put to tender. A direct interest means that the member or person, his spouse or any of his relatives up to the second degree is a bidder in the tender, owns a share in a bidder, or is a member of the board of directors, an employee, an agent or a sponsor of the bidding entity.
2- The same prohibition shall apply to contracts concluded by way of practice or direct order.
In the event of a violation, in addition to disciplinary accountability by the entity to which the violator belongs, the contract shall be voidable if the tender was awarded to the said bid, and the violator shall be liable to compensate for the damage suffered by the Requesting Entity or third parties as a result of the voiding of the contract.

Chapter Two
Accountability of Employees of Public Entities

Article 83

First: Without prejudice to the competence of the State Audit Bureau in this regard, Public Entities subject to the provisions of this Law shall immediately refer for investigation any negligence or default discovered by them in the preparation of tender or practice documents and any resulting unjustified variation orders, as well as cases of inaction in the award procedures and the conclusion of the contract with the winning bidder, or the commission of any act in violation of the provisions of this Law.
Referral for investigation shall be at the request of the Requesting Entity, which shall issue an opinion or recommendation on the matter, either to close it or to impose a disciplinary penalty on the person responsible, within a maximum of (30) thirty days from the date on which it became aware of the violation, and shall notify the Agency of the opinion or recommendation issued in this regard within two weeks of its issuance, for the necessary action to be taken.
The investigation may also be conducted at the request of the Agency.
Second: The Agency shall decide on the request of the Requesting Entity and notify it of its decision within a maximum period of (15) fifteen working days from the date of receiving the tender papers (and equivalent) and all related documents, records, data and clarifications, complete and in full. This time limit shall begin to run only from the date of receipt of any new papers, data or clarifications that the Agency may request within (7) seven working days and considers necessary and required for deciding the matter.
The Agency may, on its own responsibility and in accordance with the provisions of this Law, decide on the matter without being bound by the opinion or recommendation of the Requesting Entity, provided that the decision in this case is issued by a two-thirds majority of the members of the Board.

Chapter Three
Required Conduct of Bidders

Article 84

Bidders and undertakers shall at all times comply with their obligations under this Law, the Executive Regulations, the procurement contracts to which they are party and any other rules applicable to their conduct and activities relating to public procurement.
In all cases, any action taken in violation of the provisions of this Law and its Executive Regulations shall be void, with liability to compensate the Requesting Entity or third parties for the damage resulting from such violation.
The Executive Regulations shall set out the provisions and rules on the required conduct of bidders, as well as the measures to be taken in cases of violation.

Chapter Four
Penalties

Article 85

(1) The penalties that the Board may impose on contractors, suppliers or service undertakers are:
(a) Warning.
(b) Downgrading of category.
(c) Removal from the register and debarment from participation for a period not exceeding (5) five years, or permanent removal from the register.
These penalties are without prejudice to the contractual rights of the contracting Requesting Entity under the terms of the contract.
(2) The contractor, supplier or undertaker shall be summoned by registered letter on the basis of a decision of the Agency or a request from the Requesting Entity.
The penalty shall be imposed after summoning the contractor, supplier or undertaker, hearing its statements and examining its defence. If it refuses to appear before the Board after being summoned by registered letter, the Board may issue its decision in its absence.
(3) A bidder against which a penalty decision has been issued may file a grievance against that decision with the Grievances Committee within (30) thirty days from the date of its issuance. The Executive Regulations shall set out the procedures for filing and deciding on the grievance.
(4) Any contracting company that has defaulted in performing the contract, or has not performed it as required, shall be debarred from entering a subsequent tender until the disputed tender has been settled.
The Agency shall circulate the penalties it imposes to the relevant entities.

Part Ten
Model Contract

Article 86

Model Contract
The Agency, in cooperation with the Ministry of Finance and the Fatwa and Legislation Department, shall draw up written model contracts containing the booklets and conditions under which contracts are to be performed, consisting of a General Conditions Booklet and a Special Conditions Booklet:
First: General Conditions Booklet: The model General Conditions Booklets shall set out the administrative and technical requirements applicable to all supply, works or services contracts.
This booklet shall in particular specify the method of calculating prices and applying price review conditions, as well as the method of granting, calculating and making payments and settling the price of transactions in accordance with the accounting systems applicable in the State of Kuwait.
Second: Special Conditions Booklet: The model Special Conditions Booklets shall set out the conditions relating to each contract, and shall include a reference to all the rules, provisions, procedures and conditions provided for in this Law and its Executive Regulations.
The Special Conditions Booklet shall in particular include:
1) The method of concluding the contract.
2) An express reference to the articles of the Law and the Executive Regulations as part of the contract in respect of matters for which no special provision is made.
3) The subject of the contract, with reference to the place of execution of the works.
4) Identification of the documents included in the contract in order of priority.
5) The price, taking into account the requirements relating to the determination of prices.
6) The conditions of acceptance and delivery.
7) The conditions of payment in accordance with the regulatory provisions.
8) The conditions for termination of the contract.
9) The penalties to be imposed on the contracting party.
10) Fines of all kinds, their maximum limits, provisions and gradation.

Part Eleven
Final Provisions

Article 87

Preference for Local and National Products, Local Contractors and Small and Medium Enterprises
Without prejudice to the provisions prescribed by law with respect to direct investment of foreign capital, the Public Entity shall monitor the commitment of the foreign or local contractor to purchase not less than 20% of local products and 10% of the products and services of small and medium enterprises.
If these are not available, they may be purchased from local suppliers registered in the Agency’s supplier classification lists, provided that this is evidenced by receipts certified by the entities from which the purchase was made.
It shall also monitor the commitment of the foreign contractor to assign not less than 30% of the works awarded to it to local contractors registered in the Agency’s contractor classification lists in the various categories, of which 10% shall be allocated to owners of small and medium enterprises, according to the nature of the works, or to contractors registered and classified with Kuwait Municipality or with Kuwait Petroleum Corporation and its subsidiaries, after obtaining the approval of the entity supervising the execution of the works.
The provisions of the preceding paragraph shall apply to the local contractor where the works of the contract allow part of its works to be assigned to a subcontractor.
These percentages may be increased or decreased by decision of the Council of Ministers upon the proposal of the Agency.

* Amended by Law No. 74 of 2019. Text of the Article before amendment:

Preference for National Industry and Local Contractors

Without prejudice to the provisions prescribed by law with respect to direct investment of foreign capital, the Public Entity shall monitor the commitment of the foreign contractor to purchase not less than 30% of national industries. If these are not available, they may be purchased from local suppliers registered in the Agency’s supplier classification lists, provided that this is evidenced by receipts certified by the entities from which the purchase was made. These percentages may be increased or decreased by decision of the Council of Ministers upon the proposal of the Agency.

It shall also monitor the commitment of the foreign contractor to assign not less than 30% of the works awarded to it to local contractors registered in the Agency’s contractor classification lists in the various categories, according to the nature of the works, or to contractors registered and classified with Kuwait Municipality, after obtaining the approval of the entity supervising the execution of the works. This percentage may be increased or decreased by decision of the Council of Ministers upon the proposal of the Agency.

Article 88

Advance Planning of Tenders
The Public Entity shall prepare a schedule of the tenders and pre-qualifications it will invite, at least (90) ninety days before inviting them, together with a summary of each such tender or pre-qualification. The Executive Regulations shall regulate the rules for publishing these schedules.
Where this is not possible, the period for pre-qualification or for pricing the tender shall be not less than (90) ninety days from the date of its announcement and offering for purchase.

Article 89

Fees
1- The fees to be collected for the services provided by the Agency, and the charges for requests submitted to it for the provision of tender documents to those wishing to participate, as well as the method of determining such fees, which shall reflect only the cost of copying and distributing the tender documents, shall be determined by decision of the Competent Minister upon the proposal of the Agency’s Board.
2- Fees for grievance applications under the provisions of this Law shall be determined by decision of the Competent Minister. The grievant shall be entitled to a refund of this fee if its grievance is accepted in form and in substance.

Article 90

Agreements between Public Entities
Agreements between entities to which the provisions of this Law apply shall be concluded with the approval of the Ministers to whom the Requesting Entities report, without being subject, substantively or procedurally, to the Public Tenders Law or to the Agency.

Article 91

Executive Regulations and Ministry of Finance Instructions
1- The Executive Regulations of this Law shall be issued by decree upon the proposal of the Competent Minister in coordination with the Minister of Finance, within (6) six months from the date of its publication in the Official Gazette.
2- The Ministry of Finance shall issue its instructions to Public Entities with respect to procurement operations of all kinds, in a manner not inconsistent with the articles of this Law and its Executive Regulations.

Article 92

Transitional Provision for Employees
Employees working for the Central Tenders Committee at the time this Law enters into force shall be transferred to the Central Agency for Public Tenders with their grades and their specialised and supervisory titles. They shall be placed in equivalent grades once the new organisational structure of the Agency has been established, while preserving, as a minimum, their right to the salaries, remuneration and benefits of their previous positions.

Article 93

Transparency and Disclosure of Information
1- In addition to the publication of this Law and the Executive Regulations in the Official Gazette in accordance with the applicable provisions, this Law and the Executive Regulations shall also be published on the official public procurement portal on the internet, and the public shall be given the opportunity to view the instructions, directives and guidance circulars relating to the application of this Law and the Executive Regulations by publishing them on the said official portal immediately upon their issuance.
2- The entity competent for the tender shall announce immediately, in the manner determined by the Executive Regulations, the award of every procurement contract whose award the Executive Regulations require to be published. The announcement shall include the name and address of the winning bidder, the value of the contract and any other information as determined by the Executive Regulations, and shall be published on the official portal on the internet.
3- The Procuring Entity, according to its competence to award any tender, shall inform any unsuccessful bidder, at its request, in writing of the reasons why its bid, pre-qualification application or any offer submitted by it was unsuccessful, within (10) ten working days from the date of its request.
4- The Agency and the Requesting Entity, each according to its competence, shall prepare a brief summary of the procurement proceedings in accordance with the information specified in the Executive Regulations.
5- Public Entities shall provide the Agency with information on companies that default in performance during the term of the contract, and, after the expiry of each contract, with a report setting out the serious violations that caused damage to the work or to public funds or to which the provisions of Article (85) of this Law were applied, for the Agency to study.

Article 94

Every provision inconsistent with the provisions of this Law shall be repealed, unless there is a special provision, with effect from the date on which this Law comes into force, and Law No. (37) of 1964 referred to above is hereby repealed.
Contracting procedures that began under the repealed law and were not completed by the date on which this Law comes into force shall continue to be carried out in accordance with the provisions of Law No. 37 of 1964 referred to above until such procedures are completed.

Article 95

The existing classification shall continue to apply until contractors have been classified and suppliers registered, provided that the period does not exceed six months from the date of formation of the Board in accordance with the provisions of this Law.

Article 96

This Law shall come into force six months from the date of its publication in the Official Gazette, except for Article Five on the formation of the Agency’s Board of Directors and Article Ninety-One on the preparation of the Executive Regulations, which shall come into force with immediate effect from the date of publication of the Law.

Article 97

The Prime Minister and the Ministers, each within his competence, shall implement this Law.

Issued on 20 July 2016 and published in the Official Gazette Kuwait Al-Youm on 31 July 2016.