Decree Amending the Public Tenders Law

The Official Gazette, “Kuwait Al-Yawm,” published in its issue No. 1810 issued today, the Decree-Law No. 94 of 2026 amending certain provisions of Law No. 49 of 2016 concerning Public Tenders. The decree-law exempts all oil-related operations from the provisions of the law, regardless of their value, and raises the maximum contract value that public entities may conclude without approval from the Central Tenders Committee to one million dinars, to take effect three months after its publication in the Official Gazette. The text of the decree follows:

With regard to standard procurement cases (goods, works, and services), the Committee is competent for procurement contracts executed within the State of Kuwait whose value exceeds twenty million Kuwaiti dinars, in accordance with the provisions of this Law. Procurement committees shall be formed at Kuwait Petroleum Corporation (KPC) and its wholly owned subsidiaries, competent for contracts with values below that threshold. The minutes of procurement contracts concluded by these committees shall be referred to both the Central Tenders Committee, the Court of Audit, and the Ministry of Finance. Furthermore, these committees are tasked with establishing special conditions to facilitate the qualification of small and medium-sized enterprises (SMEs), in coordination with the National Fund for the Support and Development of Small and Medium Enterprises.

Subject to the provisions of Article 152 of the Constitution, all oil-related operations are exempted from the provisions of this Law, regardless of their value.

The aforementioned procurement committees shall carry out their activities, and appeals against their decisions shall be handled in accordance with the rules, procedures, and fees approved by the Board of Directors of Kuwait Petroleum Corporation, adhering to the principles of transparency, disclosure, compliance, governance, fairness, equal opportunity, and avoidance of conflicts of interest, with the aim of the optimal utilization of the funds of Kuwait Petroleum Corporation and its wholly owned subsidiaries. The provisions of this Law shall apply only to matters not covered by these rules and procedures, and in a manner consistent with them.

The Supreme Petroleum Council shall have the right to authorize the Corporation or one of its wholly owned subsidiaries to purchase or import goods, or to entrust contractors with carrying out works, on an urgent basis due to the nature of the required materials or works, or due to urgent or emergency circumstances, in accordance with the rules and procedures it approves, without being bound by any existing rules or procedures. The Chairman of the Corporation’s Board of Directors shall notify the Supreme Petroleum Council of contracts concluded under this arrangement at the first subsequent meeting.

A. Seven members shall be appointed by decree based on the nomination of the competent Minister and with the approval of the Council of Ministers, for a non-renewable term of four years. Among them, a full-time Chairman and Vice-Chairman shall be appointed. The term of three members of the Council formed for the first time shall expire after two years from the date of appointment, excluding the Chairman and Vice-Chairman. A decree shall be issued specifying which members’ terms expire and appointing their replacements for a term of four years. The Council of Ministers shall determine their allowances, and their dismissal shall be by decree based on the proposal of the competent Minister.

Members must be Kuwaiti nationals of integrity, possessing expertise and specialization in engineering, oil, medical, and economic affairs, and in fields related to the Committee’s work. No person who has been subject to a final judgment of bankruptcy, or a conviction for a felony or a crime involving moral turpitude or breach of trust, shall be eligible.

D. A representative of the government entity responsible for overseeing the implementation of the tender, without voting rights.

The selection of the representative for each of the entities mentioned in clauses (b), (c), and (d) shall be rotational, with a maximum term of two years for the entity’s representative.

The Board of Directors may enlist the assistance of experts, whether from the concerned entity or from elsewhere, to clarify any matters related to the exercise of its competencies, without granting them voting rights.

First: Public entities subject to the provisions of this Law may contract for any purpose stipulated herein, without prior approval from the Authority, through the appropriate method in accordance with directives issued by the Ministry of Finance, based on the needs of the concerned entity, provided that the contract value does not exceed 1,000,000 Kuwaiti Dinars.

Contracting for the same categories or works exceeding this threshold within the same fiscal year is prohibited.

These entities may cooperate with the Procurement Systems Administration in this regard, in accordance with the rules and regulations governing the centralized procurement conducted by the said Administration.

In applying the provisions of the preceding paragraph, splitting a single contract into multiple smaller contracts with the intent of reducing its value below the threshold subject to the Authority’s jurisdiction is prohibited. The concerned entity shall provide the Ministry of Finance with periodic reports every six months detailing contracts concluded within the aforementioned threshold.

The value of the aforementioned contract shall be reviewed by a decision of the Council of Ministers, either increased or decreased, based on a recommendation from the Authority.

Classification does not exempt the concerned entity from prequalification procedures for bidders. The concerned entity must undertake these procedures to ensure that bidders are qualified to execute the contract.

Subject to Law No. (1) of 2016 and Law No. (116) of 2013, as well as relevant international agreements, the following conditions apply to any party submitting a bid in open or limited tenders, or in cases of direct contracting:

If the bidder is foreign, the provisions of Item One of this Article and the provisions of Article (23) of the aforementioned Law-Decree No. (68) of 1980 shall not apply to them, in accordance with the rules specified in the Executive Regulations.

The use of local agents or commission agents in all contracting procedures is prohibited, in accordance with the rules approved by the Council of Ministers upon the proposal of the competent Minister, after coordination with relevant entities.

1. Before issuing tenders for the supply of goods or construction works in an open tender, and after preparing final designs and separating design works from construction works unless the nature of the works dictates otherwise, the concerned entity must prepare the tender documents. It must provide detailed specifications for each item or service, the scope of the procurement, the specified time and place for contract execution, and the criteria for evaluating bids. Additionally, it must issue necessary instructions to contractors, along with precise drawings, bills of quantities detailing item breakdowns, and price schedules. In doing so, international standard specifications and government supply specifications shall be observed.

2. The Executive Regulations shall determine the cases in which fees are charged for providing tender documents to interested parties.

The Authority may delegate any suitable personnel within the Authority to examine samples from a technical perspective regarding submitted bids, assess their compliance with announced conditions, and verify the availability of technical sufficiency conditions. The Authority may seek the opinion of experts it deems appropriate, and the relevant specialists shall submit reports on their findings and recommendations to the Authority.

The envelopes shall be returned to the Authority, which may delegate any suitable personnel within the Authority to provide an opinion when necessary. Financial envelopes for such bids shall not be opened until the technical recommendation regarding them has been received. Financial envelopes for bids that are technically unacceptable shall be returned to their owners unopened.

Subject to international and regional agreements ratified by the State of Kuwait, the Council of Ministers shall determine the competent Minister or the relevant public entity responsible for issuing decisions regulating the provisions concerning products granted priority in public entity procurements.

The Council or the competent purchasing authority shall award contracts to bids submitted by small and medium-sized enterprise (SME) owners, provided that such bids comply with the specifications and conditions, and the prices offered do not exceed 10% of the lowest acceptable bid.

A bidder shall not combine the priority granted to products under the provisions of Article 62 with the priority of contract award stipulated in the preceding paragraph within the same tender. In such cases, the Council shall determine the award based on whichever consideration it deems appropriate.

The Executive Regulations shall specify the conditions and controls for the participation of SME owners in purchasing processes governed by the provisions of this Law.

A Committee for Appeals against Council decisions shall be established, attached to the Council of Ministers. It shall consist of five members who are specialized legal, financial, and technical experts, appointed by decree based on the nomination of the competent Minister, for a non-renewable term of three years.

Any interested party may appeal to the Appeals Committee against Council decisions within seven working days from the date of their publication or notification to the interested parties, whichever is earlier.

The Committee shall examine the submitted appeal, rule on it, and issue a reasoned decision, without taking any further steps in the contract award process, within a period not exceeding thirty days from the date the appeal is submitted to it. If the appeal is accepted, the documents shall be returned to the Council to complete the procedures and conduct its affairs in accordance with its legally mandated powers, while adhering to the Committee’s decision. The Authority shall be notified thereof for implementation.

The Executive Regulations shall organize the rules and procedures for the Committee’s work, the submission, examination, and ruling on appeals, notification of the appellant and the Authority of its decision, and the circumstances under which appeal fees are refunded. In all cases, the Committee may suspend the purchasing process pending a final ruling on the appeal.

Without prejudice to the legal provisions regarding direct foreign capital investment, the competent authority shall monitor compliance by foreign or local contractors with the obligation to purchase no less than 30% of the products listed in the Industrial Catalog issued by the Public Authority for Industry.

If such products are unavailable, they may be purchased from local suppliers registered in the Authority’s supplier lists, provided that this is substantiated by receipts certified by the entities from which the purchases were made.

Furthermore, the competent authority shall monitor compliance by foreign contractors with the obligation to subcontract no less than 30% of the contracted works awarded to them to local contractors registered in the Authority’s contractor classification lists across various categories. Of this portion, 10% shall be allocated to SME owners, depending on the nature of the contract or the contractors registered and classified by the Kuwait Municipality, Kuwait Petroleum Corporation, and its subsidiaries, subject to obtaining approval from the authority supervising the contract’s execution. These percentages may be increased or decreased by a Cabinet Council decision upon a proposal from the Authority.

Oil Operations: All technical operations related to the exploration, production, processing, and export of oil and gas. This includes, in particular, all operations and stages necessary for the exploration and prospecting of oil and gas, field development, drilling and maintenance of hydrocarbon wells, and the production, processing, storage, transportation, loading, shipping, sale, and purchase of oil and gas, their derivatives, chemical materials, petrochemical products and their derivatives and by-products, including all operational and specialized services associated therewith.

2. Any provision in other legislations that conflicts with the final paragraph of Article 31, as replaced by this Law-Decree, is hereby repealed.

3. The provisions of Article One of this Law-Decree shall not apply to purchasing processes announced prior to its entry into force, except for Articles 62 and 62 bis.

The Board of Directors of the Central Authority for Public Tenders shall continue to operate in its current composition until the expiration of its term, as stipulated by the entry into force of this Law-Decree. The composition of the subsequent Board of Directors shall be subject to the provisions of Article (5), as amended by Article One of this Law-Decree.

The Ministers shall each, within their respective jurisdictions, implement this Law-Decree, which shall enter into force three months after its publication in the Official Gazette.

The following is the text of the explanatory memorandum for the Decree:

Law No. 49 of 2016 concerning Public Tenders was issued to regulate procurement and tendering processes conducted by government entities, within a framework of transparency, equality, and equal opportunity among competitors, in accordance with established provisions.

However, the practical application of certain provisions of the aforementioned Public Tenders Law revealed a number of difficulties and practical issues, which had negative repercussions on the implementation of the Law as intended.

In light of the above, and given the Emiri Order dated May 10, 2024, which stipulated in Article (4) that laws shall be issued by Law-Decrees, this Law-Decree was prepared. Comprising five articles, it aims to simplify procedures, address the difficulties and issues arising from practical realities, and enhance the flexibility of relevant entities in dealing with actual circumstances. This seeks to serve the interests of work and ensure that public tender procedures are executed with speed, efficiency, transparency, fairness, and justice.

Article One of the Law-Decree addressed the amendment of certain articles of the aforementioned Law No. 49 of 2016, as follows:

Clause (3) of Article (2/Third) was amended by raising the financial threshold for contracts under the purview of the Purchasing Committees of the Kuwait Petroleum Corporation (KPC) and its wholly-owned subsidiaries. This threshold may be further increased by a Cabinet Council decision, upon the proposal of the KPC Board of Directors.

Furthermore, the Purchasing Unit at the Kuwait Petroleum Corporation and its wholly-owned subsidiaries was replaced by Purchasing Committees. These committees shall conduct their work in accordance with the rules and procedures approved by the Board of Directors of the Corporation. The amendment also mandated that the aforementioned rules and procedures adhere to the principles of transparency, disclosure, compliance, governance, fairness, equal opportunity, and avoidance of conflicts of interest. A new provision was introduced stipulating that the provisions of the Public Tenders Law shall apply only to matters not covered by those rules and procedures, and in a manner that does not conflict with them. Additionally, the amendment authorized the Supreme Petroleum Council to permit the Kuwait Petroleum Corporation or one of its wholly-owned subsidiaries to urgently purchase or import items, or to instruct contractors to carry out works on an urgent basis.

Article No. (5) was also amended regarding the composition of the Board of Directors of the Authority. The membership of representatives from the State Planning Authority, the Public Authority for Manpower, and the National Fund for Small and Medium Enterprises Development and Care was abolished. Furthermore, Clause (d) of the same article, concerning the representative of the government entity responsible for supervising the implementation of the tender, was amended to stipulate that their participation in the Authority’s Board of Directors shall be without voting rights.

Finally, Clause (First) of Article No. (19) was amended to raise the maximum contract value that public entities may conclude without the Authority’s approval to 1 million Kuwaiti Dinars. The contract value shall be subject to review by a Cabinet Council decision to allow greater flexibility in adjusting this value, either upward or downward, based on a recommendation from the Authority’s Board of Directors. The reference to coordination with the National Fund for Small and Medium Enterprises Development and Care, previously included in this article, was deleted.

Article 31 prohibits the use of local agents or commission-based agents in all contracting procedures, in accordance with the rules determined by the Council of Ministers upon the proposal of the competent minister, after coordination with relevant authorities.

The amendment addressed items (1) and (2) of Article 39, separating design works from construction works and permitting their combination on an exceptional basis when the nature of the works so requires. It also abolished the exemption for small and medium-sized enterprise (SME) owners from tender document fees.

Furthermore, Articles 41 (Paragraph 2) and 49 (Paragraph 2) were amended by replacing the phrase “whichever he deems appropriate” with “the technical sector.”

Article 62 was amended to assign the authority to determine products granted priority in procurement processes to the Council of Ministers, by entrusting the minister responsible for economic and industrial policies or the relevant public authority with issuing a decision specifying products prioritized in government procurement. The amendment also addressed Article 62 bis, establishing that tenders be awarded to SME owners provided they meet the required conditions and specifications, and their offered prices do not exceed 10% of the lowest acceptable bid. It further stipulated that the priority granted to products under Article 62 bis cannot be combined with the priority granted under Article 62 in the same tender. The executive regulations shall specify the conditions and controls for SME participation in procurement processes.

Article 78 was amended to reorganize the Appeals Committee. The executive regulations shall govern the committee’s operational rules and procedures, including the submission, review, and adjudication of appeals, notification of the appellant and the authority of its decision, and cases for refunding appeal fees. In all cases, the committee may suspend procurement procedures pending the resolution of the appeal.

Article 87 was amended to obligate contractors to purchase no less than 30% of the products listed in the Industrial Catalog issued by the General Authority for Industry.

Article 2 of the Decree-Law added a definition for oil operations. Article 3 repealed Article 7 concerning the technical sector and abolished any provision conflicting with the final paragraph of the substituted Article 31 in other legislations. The provisions of Article 1 of this Decree-Law do not apply to procurement processes announced prior to its entry into force, except for Articles 62 and 62 bis.

Article 4 of the Decree-Law stipulated that the Board of Directors of the Central Authority for Public Tenders shall continue in its current composition until the expiration of its term upon the decree-law’s entry into force, and that the subsequent board’s composition shall be subject to the provisions of the substituted Article 5 under Article 1 of this Decree-Law.

Finally, Article 5 obligated each minister, within their respective competence, to implement its provisions, with effect three months after its publication in the Official Gazette.