Introduction to Public Procurement Framework
Corporate Commercial / Iraq
Aro OmarSenior Associate,Corporate Commercial
Shangar HusseinIntern,Corporate Commercial
Iraq's procurement rules are set out in a formal legal framework that sets out how public sector procurement must be handled. The main guidelines are contained in two key documents: the Coalition Provisional Authority Order No. 87 of 2004 and the Ministry of Planning Instruction No. 2 of 2014. These documents provide the legal and procedural rules that govern public procurement for different government departments and agencies.
The framework specifies several designated procurement methods, each tailored to different procurement objectives and conditions. Some of the key contracting methods include (non-exhaustive):
Public Tenders: Open to all eligible bidders and used for its inclusiveness.
Limited Tenders: Restricted to a pre-selected group of bidders based on specific criteria.
Direct Invitation: Used under conditions requiring a high level of confidentiality or urgency.
Direct Contracting: Employed when specialized services or products are necessary and available from limited sources.
Each method follows a prescribed set of procedures intended to ensure transparency and fairness while accommodating the specific needs of various public sector projects.
The regulations establish roles for several committees that oversee the procurement processes, including but not limited to:
Bid Opening and Analysis Committees: These committees are responsible for the initial and final stages of the procurement process, which involve the opening and analysis of bids.
Central Committees: These bodies review decisions made during the procurement process to ensure compliance with the regulatory framework and appropriateness in the selection of bids.These committees are involved in maintaining procedural integrity and adherence to regulatory standards throughout the procurement process.
These committees are involved in maintaining procedural integrity and adherence to regulatory standards throughout the procurement process.
Not all procurement activities fall strictly within the standard processes. The regulations provide exemptions for special cases such as:
Foreign Financed Projects: Projects that involve foreign funding might bypass some standard procurement protocols.
Security-related Acquisitions: Items related to national security may require a different approach to maintain confidentiality and urgency.
These exemptions allow for flexibility in the procurement process for special government projects that meet one or more of the conditions above.
The framework outlines explicit procedures for addressing breaches of contracts (awarded to winning bidders), putting remedies and penalties in place to handle non-compliance post-award.These include (but are not limited to):
Penalties: Financial or other penalties for non-compliance, aimed at deterring breaches.
Enforcement Actions: Steps that can be taken to enforce compliance, including the cancellation of contracts or legal actions.
These measures are designed to uphold the terms of contracts and ensure that procurement activities are conducted responsibly.
The subsidiary regulations issued under Instructions No. 2 of 2014 provide detailed guidelines on various aspects of the public procurement process in Iraq, with at least twenty specific regulations addressing different procedural elements.
These regulations include directives on preparing bid instructions, which outline the necessary content for bid submissions and ensure uniformity in what is required from all bidders. They also cover bid invitation procedures that detail the announcement and submission processes for bids, and stipulate the formalities for drafting award contracts. This includes what must be included in contracts to meet regulatory requirements.
Additionally, the regulations discuss the handling of financial transactions, such as the opening of letters of credit for public contracts, which are essential for maintaining financial oversight. They set forth conditions for work suspension and the procedures for resuming projects, which are relevant for managing project timelines and contract compliance.
Other areas, amongst many, addressed include the preparation of bills of quantity and estimated costs, crucial for project budgeting, and the treatment of contract breaches, outlining the steps to be taken when contractual obligations are not met.
Overall, these regulations intend to form a structured set of rules that govern the public procurement process, providing a framework that public bodies and bidders must follow to ensure adherence to legal and procedural standards.
Overall, Iraq’s procurement regulations provide a detailed framework that guides the public sector in conducting procurement activities. This framework is designed not only to facilitate efficient and effective procurement but also to ensure that such activities are conducted within a regulated and controlled environment. The detailed stipulations and procedural guidelines help standardize procurement practices across various governmental entities.
At Al-Tamimi & Company, we have an acute understanding and extensive experience in public procurement regulations and public projects in Iraq. We can help ensure that you meet all relevant regulatory and procedural requirements. Please reach out should you require guidance in this area.
Overall, Iraq’s procurement regulations provide a detailed framework that guides the public sector in conducting procurement activities.
For further information,please contact Aro Omar and Shangar Hussein.
Published in February 2025
