Global Government Contracting: Middle East
Identifying Procurement Opportunities. Delivering Procurement Needs.Procurement information for jurisdictions in Africa, the Americas, Asia-Pacific, Europe and the Middle East in respect of:
- how to find procurement opportunities;
- the structure of procurement laws and key content; and
- in-country resources and relevant publications.
Country Contact
Mohamed Toorani,
Partner, DLA Piper
Government Procurement
Where are government tenders advertised? Are there any different sources for government announcements of 'green' contracting opportunities?
All public tenders, with a value above BHD10,000 (approx. USD26,000) must be advertised on the Kingdom of Bahrain Tender Board website here.
In addition, it is mandatory by law to advertise all public tenders in at least one local daily newspaper.
Tenders with a value exceeding BHD1,000,000 (approx. USD2,600,000) must also be published in the Official Gazette.
Are there any requirements for bidders to be established in the jurisdiction in order to bid or execute a contract with the procuring entity?
Tenders are allocated as ‘local tenders’ or ‘international tenders’.
A local tender is limited to companies that are already established in Bahrain.
An international tender allows the participation of both local and international companies (both registered and unregistered in Bahrain), provided that the unregistered companies register in the jurisdiction within 30 days of being awarded the tender.
Is there any requirement for 'local content'?
Whilst there are currently no express requirements for local content in bidding, it is worth noting that in practice, certain tenders may require local content (e.g. employment quotas relating to the local workforce) as part of the technical assessment.
In addition, should a company be awarded a tender and they are required to establish legal presence in Bahrain, certain Bahrainization requirements may be applicable to them.
The Legal Procurement Framework
What is the applicable procurement legislation?
- Legislative Decree No. 36 of 2002 With Respect to Regulating Government Tenders and Purchases;
- Decree No. 37 of 2002 With Respect to Promulgating the Implementing Regulations of the Law Regulating Government Tenders and Purchases;
- Decision No. 1 of 2020 Concerning the Prequalification of Suppliers and Contractors;
- Decision No. 1 of 2017 Concerning Fees for Purchasing Tender Documents and the Value of Prequalification Documents;
- Decision No. 1 of 2015 Concerning the Tender Procedures;
- Decision No. 1 of 2010 Concerning the Criteria for the Comparison of Bids;
- Decision No. 3 of 2004 Concerning the Terms and Conditions for Bid Bonds and Performance Bonds; and
- Bahrain Decision No. 30 of 2022 On the Issuance of the Public Private Partnerships Guide.
Has your country ratified the WTO Government Procurement Agreement (GPA), or any bilateral trade agreement with Government Procurement commitments?
No.
If so, how do these international trade agreements interact with the domestic procurement legislation?
Not applicable.
What types of procuring entity need to comply with the procurement legislation?
The provisions of Legislative Decree No. 36 of 2002 With Respect to Regulating Government Tenders and Purchases apply to all ministries, organisations, public institutions, municipalities and government authorities which have an independent or supplementary budget and companies that are fully owned by the government, Consultative Council and House of Representatives.
That said, it is not applicable to the Bahrain Defence Force, the Public Security Forces and the National Guard.
Which types of contracts are covered?
Contracts for goods, services and construction which are over BHD10,000 (approx. USD26,500).
Are there any exemptions to competitive bidding?
There is an exception where a ‘limited tender’ can be issued.
This includes tenders where:
- the goods, construction or services are not available because of their highly sensitive nature except with a limited number of suppliers, contractors, consultants, technical personnel or experts, whether in Bahrain or abroad;
- the goods, construction or services are of a small value and it would not proportionate to expend the necessary time and cost for review and evaluation of a large number of bids with a small value; and / or
- where the purchase is from a limited number of suppliers, contractors, consultants, technical personnel or experts and is necessary for strengthening the national economy especially those supporting the balance of payments or foreign exchange reserves.
In these circumstances, the invitation to bid will be limited to only the suppliers or contractors engaged in the type of business applicable to the tender.
Are there any proposals to amend the applicable procurement legislation?
No.
Key procurement resources
Tender Board - Kingdom of Bahrain
Country Contact
Mehdi Al Lawati
Partner, Al Lawati Law
Government Procurement
Where are government tenders advertised? Are there any different sources for government announcements of 'green' contracting opportunities?
Under Royal Decree 36/2008 (Tender Law), which applies to all administrative offices of the state, public authorities and organizations and companies that are independent corporate bodies owned fully by the government (with the exception of security and defence offices or any other government organizations excluded by any other law) tenders are required to be published in a widely circulated English and Arabic newspaper in time for the date set for providing the supplies, executing the works or providing the necessary services in a manner that permits retendering when required.
Tenders may also be published through electronic means such as in social media and at the Oman Tender Board portal or at the relevant entity’s website in English and Arabic.
In addition, under the Tender Law, tenders with a value exceeding RO500,000 must be published in the Official Gazette of the Sultanate of Oman. The Official Gazette, is issued by the Omani Ministry of Justice and Legal Affairs, in Arabic on a weekly basis (every Sunday) and can be found here.
Any tender subject to the Public and Private Partnership Law (PPP Law), which applies to partnerships between the public and private sectors, is required to be published on MOF website here.
'green' contracting opportunities are treated in the same manner as mentioned above, with no differentiation from other government procurements or tenders.
Are there any requirements for bidders to be established in the jurisdiction in order to bid or execute a contract with the procuring entity?
Bidders are not legally required to be established in Oman in order to submit a bid. However, under the PPP Law, a successful foreign bidder must set up an SPV in Oman to carry out the project, as this SPV is essential for executing and being a party to the PPP contract.
Whilst the PPP Law allows the SPV to be entirely foreign-owned, it restricts any changes to the SPV's legal structure, capital reduction, share sale or mortgage, alterations in partner shares, mergers, divisions, acquisitions, adding new partners, or ownership transfer through sale or assignment, without prior written consent from the public counterpart. Moreover, mortgaging the shares of the project company for non-financial reasons is strictly prohibited.
Is there any requirement for 'local content'?
Under Royal Decree 53/2023 (Labour Law), which applies to all employers in Oman, bidders must comply with applicable obligations to nationalise the work force under the Omanisation policies set by the Minister under Ministerial Resolutions issued over time for each sector. Omanisation seeks to promote the training, development and nationalisation of the workforce by replacing foreign employees with trained Oman nationals.
Although it is a general requirement, there is an acknowledged understanding between the project owner (the government) and contractors that due to the nature of some jobs, there might be a personnel or talent shortage. In such cases, unskilled workers may be needed for these tasks, or specific projects might require specialized technical skills. The project owner is normally amenable to employing foreign workers for these roles. However, the government consistently advocates for ‘In-Country Value’, whether in terms of recruitment or the procurement of materials.
The Legal Procurement Framework
What is the applicable procurement legislation?
Oman’s Tender Law (Royal Decree No. 36/2008 and its implementation regulations, Oman Ministerial Decision No. 29/2010).
Oman’s PPP Law (Royal Decree No. 52/2019 and its implementation regulations, Oman Ministerial Decision No. 3/2020).
Oman's energy sector is regulated under the Electricity Sector Law (Royal Decree No. 78/2004).
Please see below for when these procurement laws apply.
Has your country ratified the WTO Government Procurement Agreement (GPA), or any bilateral trade agreement with Government Procurement commitments?
Oman has not ratified the WTO GPA. However, it enjoys observer status in the Committee on Government Procurement and is in the processes of acceding to the WTO GPA.
Oman is a party to the United States-Oman Free Trade Agreement which contains provisions that guarantee U.S. suppliers non-discriminatory treatment in, and fair, transparent and predictable access to, the procurements conducted by Oman government entities covered by the Free Trade Agreement.
If so, how do these international trade agreements interact with the domestic procurement legislation?
The Oman government has approved the United States-Oman Free Trade Agreement by Royal Decree; therefore, the Free Trade Agreement should have the same force as domestic law. In this regard, under both the Tender Law and the PPP Law, there are carve outs for government entities governed under specific legislation.
What types of procuring entity need to comply with the procurement legislation?
The PPP Law enables government bodies to enter into arrangements with the private sector in relation to infrastructure and public utility projects. The Law applies only to those projects which have an economic or social importance in line with the Sultanate’s strategy.
Which types of contracts are covered?
In general, procurements for contracts with the administrative offices of the state, public authorities and organizations and companies that are independent corporate bodies owned fully by the government, are governed under Oman’s Tender Law except for contracts related to (i) the security and defense departments of the government, (ii) the units which apply the Tender Law related to the financial system of the Diwan of Royal Court, and (iii) any other government entity excluded by the provisions of any other law. One example is article 2 of Royal Decree 60/2013 (Amending Certain Provisions of the Tender Law) which prescribes that, once a wholly-owned government entity has drawn up its internal procurement regulations, its projects will be procured in accordance with such internal procurement regulations and the Tender Law will no longer be applicable.
The procurement of PPP contracts with government entities related to infrastructure and public utilities projects is governed under Oman’s PPP Law provided that the contract has economic or social benefits and is consistent with Oman’s strategy and development plan.
Are there any exemptions to competitive bidding?
Yes, the Tender Law specifies that there is an exemption where it is not possible to follow a competitive procurement in circumstances where a single bid is received which: (i) is compliant with the terms and conditions of the RFP; (ii) is affordable in terms of price; and (iii) it would be in the public interest not to re-tender.
Under the PPP Law, a single bid, or a bid that exceeds the benchmark costs, may also be accepted by a decision of the Minister of Finance based on the recommendation of Ministry of Finance if the same circumstances under the Tender Law are satisfied except that instead of an affordable price, the bid value does not exceed 20% of the benchmark costs.
Are there any proposals to amend the applicable procurement legislation?
No, not that we are aware of.
Key procurement resources
Please see the legislation listed in the commentary above.
