Fatwa and Legislation Department Hosts Seminar on New Tender Law During Cultural Season

As part of the second legal season of Fatwa and Legislation, the Fatwa and Legislation Department organized a dialogue seminar titled “The New Public Tenders Law: A Legal Reading of the Targeted Amendments and Their Impact on Government Contracting Procedures” at its headquarters. The event was attended by Essam Al-Marzouq, Chairman of the Board of Directors of the Central Tenders Committee; Meshal Al-Qahhas, Assistant Undersecretary for Support Services at the Ministry of Finance; Dr. Najlaa Al-Ghaith, Deputy Undersecretary for the Fatwa Sector and Head of the Fatwa and Legislation Department; and Alaa Al-Saqqaf, Acting Director of Legal Affairs at Kuwait Petroleum Corporation.

In his remarks, Al-Marzouq confirmed that the threshold for tenders submitted to the Central Tenders Committee had been raised to one million dinars, up from 75,000 dinars. This amendment was introduced because a significant proportion—approximately 50 percent—of previous tenders were valued at 75,000 dinars. These tenders were of an operational and repetitive nature, not requiring the continuous intervention of the Central Tenders Committee or its Board of Directors. The decision aims to alleviate administrative burdens and allow greater focus on strategic and vital projects, while affirming that government entities possess the financial and administrative readiness to handle this threshold.

Al-Marzouq emphasized that the initiative to review procedures began in 2019, when the Council of Ministers directed the formation of a committee chaired by the Minister of State for Economic Affairs to examine government contracting procedures and accelerate the documentation cycle. The committee included representatives from several key government entities, including the Ministries of Finance, Public Works, Electricity and Water, and the Oil Sector, as well as a representative from the General Secretariat of the Central Tenders Committee. It produced numerous recommendations and legislative proposals to facilitate and simplify procedures, and to coordinate work among government entities.

He noted that the law addressed the separation of design and construction in a dedicated article. He explained that in traditional projects or simple infrastructure, these phases can be separated. However, in complex projects such as power plants and oil sector facilities, the contractor is required to provide “preliminary engineering and design” and execute the entire project based on that. The law also introduced exceptional flexibility, allowing entities that wish to combine design and construction to submit justifications and obtain approval for such an approach.

Regarding local content, Al-Marzouq clarified that provisions related to local content had been reviewed and refined to ensure a clear preference for national products over foreign or non-local ones. He added that coordination had been conducted with relevant authorities, such as the Ministry of Industry, to establish precise ratios and controls that support local industry and products.

He further stated that although previous laws supported small and medium-sized enterprises (SMEs), the new amendments introduced controls granting them specific channels and preferences in tenders, in compliance with general laws and without contradiction. The entry of SMEs into government projects will also be regulated. He confirmed that the Appeals Committee’s operations have been organized to serve as the body reviewing companies’ appeals against Board of Directors’ decisions. Companies have been granted the right to refer to the Appeals Committee if they deem a Board decision unjustified, with the committee’s authority to either uphold or annul such decisions clearly defined.

Regarding the local agent file, Al-Marzouq stated that an extensive discussion was raised about its abolition and whether it would cause certain issues for government entities, such as the Ministry of Health and other ministries, whose nature of work requires the presence of an authorized agent or commission agent. The amendment ultimately granted the competent minister, such as the Minister of Finance or the relevant minister, the authority to establish the controls and rules governing exceptions or cases where a local agent is required.

For her part, Dr. Najlaa Al-Ghaith said they found positive aspects in the law, including the part concerning the Petroleum Authority regarding the lifting of the threshold. This is a very important issue, as it allowed government entities to operate within the framework of simplifying procedures and to adopt contracting and awarding measures while reducing the documentary cycle. However, on the other hand, we must bear in mind that purchasing committees in government entities are currently tasked with organizing their work and establishing controls to ensure the integrity of the implemented procedures.

Al-Ghaith pointed out that another positive aspect of the law is the inclusion of a provision regarding the periodic re-evaluation of the classification of general contracting companies. This will compel companies to raise their standards to meet the authority’s requirements. She emphasized that the issue of separating or combining design and construction works is important in itself, as it can enhance operational efficiency and strengthen governance in project implementation. She added that the law granted an exception to be determined by the government entity according to the nature of the projects.

Regarding the temporal scope of the law’s application, she affirmed that this rule, known as the direct effect of the new law or the issue of conflict between the previous and subsequent laws, was settled in Article 179 of the Constitution and Article 3 of the Civil Code. Legally, the general principle is that laws are not retroactive, as the legislator always strives to ensure the stability of transactions and apply justice to parties dealing under an existing law, to avoid confusion in transactions. She clarified that the new law will apply immediately and directly to legal facts occurring under it, whether in their formation, in producing their effects, or in their termination.

She added that the effects of acts or procedures carried out under a previous law will remain governed by the law under which the contracts were concluded, unless it concerns public order. She explained that the amendment, according to Law Decree No. 94/2026, stipulated in Article 5 that it will be implemented three months after its publication in the Official Gazette, which will be in late December next year, and will enter into force from that date, not from its issuance or publication date.

She added that according to Article 3 of the amendment decree, procedures carried out in tenders will not be subject to the provisions of the new law; those processes will remain governed by the provisions of the previous law. However, the law introduced a caveat, stating that except for two articles, I believe Articles 62 and 62 bis, which relate to the priority of products and the issue of small and medium-sized enterprises, the entry into force will be immediate.

She clarified that there is a very important, stable rule regarding winning bidders: a party is not considered a contractor until the date of signing the contract. Therefore, awarding the tender or announcing it falls under preliminary procedures that do not bind the administrative authority to make a final decision. She noted that the executive regulations, as far as she knows, are prepared in our sector by the Legal Affairs and Legislation department, and they expedite their preparation. The executive regulation is considered supplementary legislation to the original law; therefore, its application is linked to the original legislation.

It is crucial to understand that the regulation establishes practical procedural rules without introducing any new rulings or amending existing legislation. It does not include any suspension or repeal, nor does it regulate matters not already covered by the Basic Law; it merely defines procedures, clarifying that the regulation sets the course, corrects erroneous procedures, and directs them properly.

For his part, Meshal Al-Qahhas confirmed that the Ministry of Finance is working to update Circular No. 5 of 2000 regarding the procurement systems of government entities, to align with the new provisions and amendments to the Law. He emphasized that the aim is to create a conducive environment within government entities that accelerates the implementation of the law without obstacles. He noted that tenders, practices, and direct procurement are means, not ends, and the primary objective is to enable government entities to deliver their services to citizens and advance development projects.

Al-Qahhas pointed to a proposal regarding price quotations, suggesting they be capped at 25,000 Kuwaiti dinars, with mandatory publication on the website and consideration of price inflation. In practice, this ranges between 25,000 and 250,000 dinars, according to internal procedures of government entities. Internal tenders, meanwhile, start from 250,000 dinars up to one million dinars, conducted as internal tenders according to the procedures of the Minister or the head of the entity, with publication in Al-Kuwait Al-Youm newspaper and the website. For public tenders, any amount exceeding one million dinars requires the approval of the head of the entity and official publication. He stressed that these ceilings are still under review, study, and consultation with all government entities, and will not be finalized until the opinions of all parties are considered.

He added that the procurement plan is one of the most important provisions of the new amendment. Each government entity discloses its future plan and needs in advance. The procurement plan helps consolidate the entity’s requests into a single contract with a primary supplier, rather than dispersing requests and varying prices throughout the year (such as office supplies and recurring purchases), thereby ensuring price efficiency and compliance. It also allows domestic and foreign private sectors to gain prior knowledge of projects and equipment before they are launched, making companies ready and prepared for immediate participation and preventing delays in contracts and documentation cycles.

For her part, Acting Director of Legal Affairs at Kuwait Petroleum Corporation (KPC), Alaa Al-Saqqaf, stated that the Corporation has a commercial and economic character and represents the lifeblood of state revenues. In the state’s journey toward economic and commercial progress, most current legislation aligns with this development.

She emphasized that petroleum and oil operations are fundamentally defined by the legislator as fully exempt from the jurisdiction of the Tenders Law. They are entirely subject to the mechanisms and rules established internally by KPC, through the approval of these regulations by the KPC Board of Directors. Consequently, any oil-related operations are fully exempt and subject to these internal regulations.

She noted that the legislator has paid attention to the oil sector since 1980, clarifying that oil operations are fully exempt from the Tenders Law and are instead subject to KPC regulations. Standard contracts, however, are subject to the Central Tenders Committee, particularly because they are of a highly precise technical, economic, and commercial nature.

It noted that the new amendment grants the Kuwait Petroleum Corporation (KPC) the authority to establish systems determined by its board of directors, without being bound by the Public Tenders Law. It added that the corporation has committees tasked with drafting contracting regulations, with a view to submitting them for the necessary approvals. The KPC and its subsidiaries have two committees: the Internal Procurement Committee and the Higher Procurement Committee, which is formed by the corporation’s board of directors and is responsible for reviewing appeals. The amendment to the KPC Law subjects the corporation to subsequent oversight by the Court of Audit.