Issuance of a decree amending the 'Public Tenders' Law

- Raising the maximum contracting threshold without the “Authority’s” approval to 1 million dinars

- Prohibiting the use of local agents or commission-based agents in all contracting procedures

- Excluding oil operations from the provisions of the law and raising the threshold for Kuwait Petroleum Corporation’s purchase contracts to 20 million dinars

- Prioritizing small and medium-sized enterprise (SME) owners if their prices do not exceed the lowest acceptable bid by more than 10%

- Establishing an appeals committee attached to the Council of Ministers, with decisions rendered within 30 days

- Removing representatives of “Planning,” “Labor,” and “Small Projects” from the Authority’s board of directors

The Official Gazette, “Kuwait Al-Yaum,” published on Sunday, the Law-Decree No. 94 of 2026, amending certain provisions of Law No. 49 of 2016 concerning public tenders.

The amendments include raising the financial threshold for contracts that public entities may conclude without the approval of the Central Authority for Public Tenders to 1 million dinars, reorganizing purchasing committees at Kuwait Petroleum Corporation (KPC) and its wholly owned subsidiaries, and establishing special conditions to facilitate the participation of small and medium-sized enterprises (SMEs) in tenders.

The amendments also cover classification rules for general contracting firms, prohibit the use of local agents or commission-based agents in contracting procedures, regulate the inspection of samples and bids in technical cases, grant priority in certain procurement processes to SME owners, and regulate appeals. Additionally, foreign contractors are required to purchase a percentage of products listed in the industrial catalog.

The decree includes the following articles:

Article One

The following texts replace the provisions of paragraphs (2/Third, Item 3, 5, 19/First Item, 26, 31, 39 (Items 1 and 2), 41 (Second Paragraph), 49 (Second Paragraph), 62, 62 bis, 78, 87) of Law No. 49 of 2016 referred to above:

Article (2/Third, Item 3)

3. Regarding procurement areas (goods, contracts, services), the Authority is competent for purchase contracts executed within the State of Kuwait exceeding 20 million Kuwaiti dinars, in accordance with the provisions of this Law. Purchasing committees shall be formed at Kuwait Petroleum Corporation and its wholly owned subsidiaries, competent for contracts with values below this threshold. The minutes of purchase contracts conducted by these committees shall be referred to the Authority, the Court of Accounts, and the Ministry of Finance. These committees are also responsible for establishing special conditions to facilitate the qualification of small and medium-sized enterprises, in coordination with the National Fund for the Support and Development of Small and Medium Enterprises.

The threshold mentioned in the preceding paragraph may be increased by a Council of Ministers’ decision, upon the proposal of the Board of Directors of Kuwait Petroleum Corporation.

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

The purchasing committees referred to 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, commitment, governance, fairness, equal opportunity, and avoidance of conflicts of interest, with the aim of optimizing the use of Kuwait Petroleum Corporation’s and its wholly owned subsidiaries’ funds. 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 has the authority to authorize the Authority or one of its wholly owned subsidiaries to purchase or import items, or to engage contractors to carry out works on an urgent basis, due to the nature of the required materials or works, or because of pressing or emergency circumstances, in accordance with the rules and procedures approved by the Council, without being bound by any existing rules or procedures. The Chairman of the Authority’s Board of Directors shall notify the Supreme Petroleum Council of contracts whose value reaches a specified threshold at the next subsequent meeting.

Article (5)

The Board of Directors of the Authority shall consist of:

A. Seven members appointed by decree upon 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 a full-time Vice-Chairman shall be appointed. The term of office of three members of the Board 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 who shall replace them, for a term of four years. The Council of Ministers shall determine their allowances, and their dismissal shall be by decree upon the proposal of the competent Minister.

Members must be Kuwaiti citizens of integrity, possessing expertise and specialization in engineering, oil, medical, and economic affairs, as well as in fields related to the Authority’s work. No person shall be eligible if a final judgment has been rendered against them for bankruptcy, or if they have been convicted of a felony or a crime involving moral turpitude or breach of trust.

B. A representative of the Office of Legal Opinions and Legislation.

C. A representative of the Ministry of Finance.

D. A representative of the government entity responsible for supervising the implementation of the tender, who shall not have the right to vote.

The selection of the representative from each of the entities mentioned in clauses (B), (C), and (D) shall be rotational, with a maximum term of two years for each representative.

The Board of Directors may avail itself of the expertise of individuals it deems suitable, whether from the concerned entity or from elsewhere, to clarify any matters directly related to its competencies. Such experts shall not have the right to vote.

Article (19 / Item One)

First: Public entities subject to the provisions of this Law may contract for any purpose stipulated in this Law without the Authority’s approval, using the appropriate method in accordance with circulars 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 (one million Kuwaiti Dinars).

Contracts under this provision for the same items or works shall not exceed this threshold during the fiscal year.

These entities may cooperate with the Procurement Systems Administration in this regard, in accordance with the rules and systems of centralized procurement administered by the said Administration.

In applying the provisions of the preceding paragraph, a single contract shall not be split into multiple contracts with the intent of reducing its value to avoid falling under the Authority’s jurisdiction. The concerned entity shall provide the Ministry of Finance with periodic reports every six months regarding contracts concluded within the aforementioned threshold.

The Council of Ministers may, by decision, increase or decrease the aforementioned contract value based on a recommendation from the Council.

Article (26)

The Classification Committee shall classify general contracting contractors into four categories based on their financial and technical capabilities. The Authority shall establish special conditions to facilitate the entry of small and medium-sized project owners into the fourth category.

The classification shall be periodically re-evaluated according to the bases and criteria established by the Classification Committee.

The Executive Regulations of this Law shall specify the deadlines and procedures for submitting registration and classification applications, the conditions for each, the classification categories, the review process, and the deadlines and procedures for appealing decisions issued regarding them.

The classification does not exempt tenderers from qualification procedures, and the concerned authority must undertake such procedures to ensure that tenderers are qualified to execute the contract.

Article (31)

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

First: The bidder, whether an individual or a company, must be registered in the Commercial Register.

Second: The bidder must be registered in the register of suppliers or contractors, depending on the nature of the tender, direct contracting, or direct procurement.

If the bidder is a foreign entity, the provisions of Item (1) of this Article and the provisions of Article (23) of Decree-Law No. (68) of 1980, referred to above, shall not apply to them, in accordance with the rules specified in the Executive Regulations.

The use of a local agent or a commission agent 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 authorities.

Article (39)

1. Before offering 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 requires otherwise, the concerned authority shall prepare the tender documents and set out detailed specifications for each item or the performance of each work, the scope of the procurement process, the specified time and place for contract execution, and the criteria for evaluating bids. It shall also issue necessary instructions to contractors, along with precise drawings and bills of quantities detailing item breakdowns and price schedules, while adhering to international standard specifications and government department specifications.

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

Article (41 / Paragraph Two)

The Council may appoint any suitable person within the Authority to examine samples from a technical perspective regarding submitted bids and their compliance with announced conditions, as well as to verify the availability of technical adequacy conditions. The Council may seek the opinion of experts it deems appropriate, and the relevant specialist shall submit reports on the results of their research and recommendations to the Council.

Article (49 / Paragraph Two)

The envelopes shall be returned to the Authority, and the Council may appoint any suitable person within the Authority to provide an opinion when required. Financial envelopes for these bids shall not be opened until the technical recommendation regarding them is received. Financial envelopes for rejected technical bids shall be returned to their owners unopened.

Article (62)

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 authority responsible for issuing a decision regarding the regulation of provisions for products granted priority in public sector procurements.

Article (62 bis)

The Council or the competent procurement authority shall award contracts to bids submitted by owners of small and medium-sized enterprises, provided they comply with specifications and conditions, and the offered prices do not exceed 10% of the lowest accepted bid.

A bidder shall not combine the priority granted to products under the provisions of Article (62) with the award priority granted under the preceding paragraph in 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 owners of small and medium-sized enterprises in procurement processes governed by the provisions of this Law.

Article (78)

A Complaints Committee shall be established to review decisions of the Council, attached to the Council of Ministers. It shall consist of five members, being specialized legal, financial, and technical experts, appointed by decree upon nomination by the competent Minister, for a non-renewable term of three years.

Any interested party may file a complaint with the Complaints Committee against decisions of the Council within seven working days from the date of their publication or notification to the interested parties, whichever is earlier.

The Authority shall promptly provide the Committee, upon request, with all documents and information related to the complaint submitted to the Committee.

The Committee shall examine the complaint submitted to it, rule on it, and issue a reasoned decision, without taking any awarding procedures, within a period not exceeding thirty days from the date the complaint is submitted to it. In case the complaint is accepted, the files shall be returned to the Council to complete the procedures and its affairs in accordance with the authority prescribed by law, taking into account the Committee’s decision, and the Authority shall be notified of what has been implemented.

The Executive Regulations shall govern the rules and procedures for the Committee’s work, the filing, examination, and ruling on complaints, notification of the complainant and the Authority of its decision, and the circumstances under which complaint fees are refunded. In all cases, the Committee may suspend the procurement procedures until a decision is rendered on the complaint.

Article 87

Subject to the legal provisions regarding direct foreign capital investment, the competent authority shall monitor compliance by the foreign or local contractor 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 evidenced by official receipts from the suppliers from whom the purchases were made.

Furthermore, the competent authority shall monitor compliance by the foreign contractor with the obligation to assign no less than 30% of the contracted works awarded to it to local contractors registered in the Authority’s contractor classification lists across various categories. Of this percentage, 10% shall be reserved for small and medium-sized enterprise owners, depending on the nature of the contract or the contractors registered and classified with the Kuwait Municipality, the Kuwait Petroleum Corporation, and its subsidiaries, after obtaining approval from the authority supervising the implementation of the contract. This percentage may be increased or decreased by a decision of the Council of Ministers upon the proposal of the Authority.

Article Two

The following definition is added to Article (1) of Law No. 49 of 2016, referred to above:

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

Article Three

1. Article (7) of Law No. 49 of 2016, referred to above, is repealed.

2. Any provision in other legislations that contradicts the provisions of the last paragraph of Article (31), as replaced by this Law-Decree, is also repealed.

3. The provisions of Article One of this Law-Decree shall not apply to procurement processes announced prior to its entry into force, except for Articles No. (62) and (62 bis).

Article Four

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

Article Five

Ministers are to implement this Decree-Law within their respective areas of competence, and it shall enter into force three months after its publication in the Official Gazette.

Explanatory Memorandum

The Explanatory Memorandum clarified that Law No. 49 of 2016 concerning Public Tenders was issued to regulate the procurement and tendering processes conducted by government entities within a framework of transparency, equality, and equal opportunity among competitors. However, the practical application of certain provisions revealed difficulties and issues that negatively impacted the smooth progress of work as intended.

It indicated that the amendments aimed to facilitate procedures for public entities and their counterparties, enhance the flexibility of concerned entities in dealing with practical realities, and ensure the execution of public tender procedures with speed, efficiency, transparency, fairness, and equal opportunity.

It pointed out the amendment of Article (2), third paragraph, item 3, by raising the financial threshold for contracts under the purview of the Purchasing Committees of the Kuwait Petroleum Corporation and its wholly-owned subsidiaries. This threshold may be increased by a Cabinet decision based on a proposal from the Corporation’s Board of Directors. The role of the Purchasing Unit was replaced by Purchasing Committees, which shall operate in accordance with the rules and procedures approved by the Board of Directors, while adhering to the principles of transparency, disclosure, compliance, governance, fairness, equal opportunity, and avoidance of conflicts of interest.

The amendment also authorized the Supreme Council of Petroleum to permit the Kuwait Petroleum Corporation or one of its wholly-owned subsidiaries to purchase or import items, or to assign urgent works to contractors due to the nature of the required materials or works, or due to urgent or emergency circumstances.

The amendments included Article (5) concerning the formation of the Authority’s Board of Directors, by removing the membership of representatives from the competent authorities for planning affairs in the State, the Public Authority for Manpower, and the National Fund for Supporting and Developing Small and Medium Enterprises. Additionally, the item related to the representative of the government entity supervising the execution of the tender was amended to stipulate that he shall not have the right to vote.

The amendments also raised the maximum contract value that public entities may conclude without the Authority’s approval to one million dinars, while deleting the reference to coordination with the National Fund for Supporting and Developing Small and Medium Enterprises.

The Memorandum added that Article (26) was amended regarding the classification of general contracting contractors, by adding a provision requiring periodic re-evaluation of classification according to the bases and criteria established by the Classification Committee.

The amendments prohibited the use of local agents or commission agents in all contracting procedures, in accordance with rules approved by the Cabinet based on a proposal from the competent Minister, after coordination with relevant entities.

The amendment also addressed the separation of design works from construction works whenever the nature of the works so requires, and permitted combining them when the nature of the works dictates otherwise. Furthermore, the phrase “small and medium projects” was replaced with “owners of small and medium projects” in tender documents.

The amendments covered Articles (41) and (49) by replacing the phrase “as deemed appropriate” with “the technical sector.” Additionally, the amendment of Article (62) assigned the authority to determine products granted priority in procurement processes to the Cabinet, by entrusting the Minister responsible for economic and industrial policies or the concerned public entity to issue a decision specifying those products.

The amendment of Article (62 bis) permitted awarding tenders to owners of small and medium projects when their bids comply with the conditions and specifications, and the offered prices do not exceed 10% of the lowest accepted bid. It also stipulated that priority for products and priority for awarding in the same tender cannot be combined.

The amendment of Article 78 also reorganized the Appeals Committee, its rules and procedures for submitting, reviewing, and ruling on appeals, as well as notifying the appellant and the Authority of its decision. It authorized the Committee to suspend procurement procedures pending a ruling on the appeal.

The memorandum clarified that Article 87 was amended to oblige contractors to purchase no less than 30% of the products listed in the Industrial Catalog issued by the Public Authority for Industry.

Article Two added a definition of oil operations, while Article Three repealed Article 7 concerning the technical sector and any provision conflicting with the final paragraph of the replaced Article 31. It stipulated that the provisions of Article One would not apply to procurement processes announced prior to the entry into force of the Decree-Law, except for Articles 62 and 62 bis.

Article Four provided for the continuation of the Central Authority for Public Tenders’ Board of Directors in its current composition until the expiration of its term, with the subsequent Board subject to the new provisions. Article Five stipulated that the Decree-Law would take effect three months after its publication in the Official Gazette.