Kuwait - Selling to the GovernmentKuwait - Selling to the Government
Tender Law No. 49 of 2016 regulates government tenders. The Central Agency for Public Tenders (CAPT), under the jurisdiction of the Council of Ministers, acts on behalf of most government ministries. It oversees public tenders that are valued at more than 75,000 KD (approximately $248,500). Under the law, foreign bidders can bid on public tenders without a local agent, however, an agent is needed for the execution phase. The law which went into effect in 2017 requires foreign bidders to purchase at least 30% of the materials from the local market, where available. The law favors local sourcing by mandating a 15 percent price preference for locally produced items. Bidders are selected based on scores against a specified point-based criterion. In addition, bidders can now file a grievance if they have an issue with the tendering process. Besides awarding contracts, CAPT invites companies to pre-qualify, and to attend pre-tender meetings. All CAPT announcements can be found at the website https://capt.gov.kw/en/, and are published weekly in Arabic in the official gazette, al-Kuwait al-Youm. An English translation of the gazette is available for subscription from a licensed vendor (Al-Abraj Translation & Publishing Co.).
Tenders are usually awarded on the basis of the lowest price once technical compliance has been established. Businesses should note that if a bidder wins a tender but then refuses to sign the contract, the concerned Ministry has the right to confiscate the bid bond as well as the performance bond, which may equal 5-10% of the contract’s value.
Many companies add 10-15% to the cost of the project to mitigate the potential risk of projects or losing the performance bond. Foreign companies cannot sell directly to the government nor can they participate in public tenders except through a local agent. In the oil sector, for instance, suppliers must be approved by an internal committee and placed on a list of “pre-approved” companies. For major projects, international companies are usually invited to pre-qualify.
There is a 10% price preference on public contracts in favor of Kuwaiti businesses. If a contracting officer or authority determines that a local company meets the technical specifications of the proposal, and even though the bid price may be higher (within 10%), the local company is awarded the contract. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Tenders are usually awarded on the basis of the lowest price once technical compliance has been established. Businesses should note that if a bidder wins a tender but then refuses to sign the contract, the concerned Ministry has the right to confiscate the bid bond as well as the performance bond, which may equal 5-10% of the contract’s value.
Many companies add 10-15% to the cost of the project to mitigate the potential risk of projects or losing the performance bond. Foreign companies cannot sell directly to the government nor can they participate in public tenders except through a local agent. In the oil sector, for instance, suppliers must be approved by an internal committee and placed on a list of “pre-approved” companies. For major projects, international companies are usually invited to pre-qualify.
There is a 10% price preference on public contracts in favor of Kuwaiti businesses. If a contracting officer or authority determines that a local company meets the technical specifications of the proposal, and even though the bid price may be higher (within 10%), the local company is awarded the contract. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.