Ban Tenders and Government Contracts with Any Company Under Security Review
A committee comprising government ministries and entities has been tasked with establishing unified mechanisms to exclude entities with security concerns from government tenders and contracts to ensure the safety of public funds.
Translated by Qiyas from الراي — Original source
- Whether the scope of the restriction will be limited to the entity itself or will extend to partners, directors, board members, beneficial owners, and authorized signatories?
- A unified verification mechanism for entities before awarding them a tender or contract.
- A committee comprising representatives from the Ministries of Commerce and Industry, Interior, Finance, Fatwa and Legislation, Municipality, Public Tenders, and Public Authority for Manpower, to develop a comprehensive vision for the implementation mechanism.
- Harmonizing procedures and standards to ensure consistency across different authorities.
- Ensuring clarity and transparency when dealing with restricted cases.
- Defining the observations and restrictions that lead to inclusion on the “blacklist.”
- Clarifying cases of total and temporary exclusion, as well as the duration of the ban.
- Outlining procedures for lifting the restriction and cases where the effect of the measure ceases once the underlying cause is removed.
- Ensuring safeguards that protect public funds and the integrity of procedures.
Do individuals and companies subject to security restrictions or observations related to fraud and other criminal acts that tarnish honor have the right to contract with government entities, whether by obtaining tenders, contracts, or any other agreements?
The answer, emerging from extensive government discussions recently opened on this issue, clearly concluded with consensus on a central principle: “No, they do not have the right.” Authorities have been directed to establish mechanisms that prohibit any company or commercial entity subject to security observations and restrictions—which may affect the flow of work or public funds—from contracting with any government entity or obtaining tenders or contracts.
However, what is the appropriate framework for implementing this government directive? What is the duration of such exclusion? In light of some penalized entities establishing new companies under different names to circumvent their exclusion from tenders during the penalty period, will the anticipated ban apply only to the parent entity that committed the offense warranting the restriction, or will the measure extend to partners and directors by including their names in a list of persons barred from government contracting?
Legally and procedurally, officials from the Ministry of Commerce and Industry have been tasked, in coordination with officials from the Ministry of Interior, Ministry of Finance, Fatwa and Legislation Administration, Kuwait Municipality, Central Tenders Board, and Public Authority for Manpower, to study and establish the appropriate controls and mechanism for excluding currently listed companies or those to be listed in the future on the “blacklist,” and preventing them from contracting with government entities, whenever the observations or restrictions could affect the flow of work or protect the state’s public funds.
This directive to the Ministries of Commerce, Interior, and Finance, along with the Fatwa and Legislation Administration, Kuwait Municipality, Central Tenders Board, and Public Authority for Manpower, is part of a broader government effort to coordinate with relevant state authorities to regulate government contracting procedures and reach a unified, integrated operational mechanism agreed upon and approved by all concerned government and security entities.
Practically, this coordination ensures harmonization of procedures and standards, prevents inconsistent application across different authorities, and achieves clarity and transparency when dealing with cases excluded from government contracts.
1. Defining the nature and type of security observations or restrictions that lead to the prohibition or exclusion of a company, institution, or commercial entity from contracting with government entities.
3. Determining the cases that result in total or temporary exclusion from tenders, contracts, or government agreements, and the duration during which such exclusion applies.
4. Establishing a unified mechanism to verify the status of a company or commercial entity before entering into any government contract, awarding a tender, or concluding a contract.
It is planned to solicit the views of all relevant parties specified in the committee established for this purpose, in order to present appropriate recommendations to the Council of Ministers. These recommendations will support the implementation of a measure prohibiting government entities from contracting with any company or commercial entity that raises security concerns or restrictions, which could affect the continuity of work or public funds, while emphasizing that there will be no leniency in pursuing measures that safeguard the state’s rights.
Sources clarified that the government directive in this regard stressed firmness in implementing the measure and avoiding any obstacles that might hinder its comprehensive application. Those concerned, each within their respective jurisdictions, will take the necessary steps to establish an appropriate framework for the mechanism, including ensuring that companies banned under this principle are not allowed to participate in any new tenders until they have been cleared by the competent authorities.
