Qatar Tender Law; the general rules governing Government Projects
Dispute Resolution / Qatar
The State of Qatar has made noticeable progress recently in promoting transparency and equity in public tenders. The first significant development were the amendments of the Qatar Tender Law implementing regulations that were issued in 2022.
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The State of Qatar has made noticeable progress recently in promoting transparency and equity in public tenders. The first significant development were the amendments of the Qatar Tender Law implementing regulations that were issued in 2022. Further, the Shura Council approved in June 2024 a draft law amending certain provisions of the Qatar Tender Law. This amendment is still not issued nor published in the official gazette (at the time of drafting this article) but is expected to be issued soon.
In addition, over the last couple of years the Qatari Public Prosecution has made several announcements with respect to referring a number of individuals (including public officials) to the court for allegedly violating the Qatar Tender Law and the Qatar Penal Code.
The last announcement by the Qatari Public Prosecution was made in July 2024 mentioning the referral of eight accused individuals, including a department manager at a public entity, on charges of bribery, intentional damage to public funds, abuse of position and money laundering. As per the announcement, the violations, if proven, would lead to jeopardising the freedom and integrity of tenders and auctions in Qatar. 1
This new legislation and the Public Prosecutor’s announcements confirm the importance of complying with the Qatar Tender Law by all concerned parties including companies bidding for any public project.
Within this article, we highlight the tendering methods and other key points to be taken into consideration by companies in accordance with the current Qatar Tender Law and other related laws.
The Qatar Tender Law (Law No. 24 of 2015 issuing the Tenders and Bids Regulatory) and its implementing regulations (No. 16 of 2019) specify the methods that can be followed for supplying products or services to public entities. It comprises 6 methods.
The Qatar Tender Law applies to all projects in Qatar which include supplying products or services to public entities, unless a certain public entity is exempted by the Qatar Tender Law itself or by a decision issued by the Prime Minister based on a recommendation of the Ministry of Finance. Examples of the entities exempted by the Qatar Tender Law are the Armed Forces and QatarEnergy (formerly Qatar Petroleum).
Each public entity or group of entities [which is proposing to implement a tender process] should have a Tender Committee. The Tender Committee is mainly responsible for approving and conducting Public Tenders or any of the other methods provided by the law. In addition, the Tender Committee is responsible for obtaining any necessary approvals from the concerned minister for each tender method after providing the needed recommendation to the minister, and concluding the contract or agreement with the supplier or service provider which won the tender.
Below a brief clarification of the 6 methods to enter into contracts with public entities under the Qatar Tender Law.
Public Tenders: Public Tenders are the main and default method for concluding contracts related to supplying products or services to public entities. The other 5 methods are used only in exceptional cases under certain conditions.
The Qatar Tender Law and the implementing regulations provide detailed measures which must be followed under this method to protect the interests of the public entity as well as the public funds, with the focus on promoting transparency and equity in all contracts.
Two- Phase tender: This method is used when it is challenging for the concerned public entity to prepare the needed detailed technical specifications for the products or services subject to the tender.
Within the first phase of the Two-Phase tender, the concerned public entity announces a request to submit initial bids without setting prices. The preliminary bids should include technical proposals clarifying the suggested technical specifications, as well as the qualifications of the bidders.
The second phase of the Two-Phase tender includes announcing the determined technical specifications of the tender to the entities that were accepted in the first phase.
Restricted tender: This method is used in cases where the nature of the tender requires the invitation to be restricted to specific suppliers or service providers listed in specific lists prepared by the concerned public entity for this purpose, including cases where complex or highly specialized services are needed.
Similar to the Two-Phase tender, this method also has two stages; prequalification stage which is announced prior to the tender by the concerned public entity, and a tender stage after completing the prequalification stage.
Contracting by practice: This is one of the methods used for urgent tenders, when such urgency does not allow the public entity to follow the process of a public tender. This method is also used in cases where a Public Tender was announced without receiving any acceptable bids, and the urgency does not allow announcing another Public Tender.
Despite being more practical, this urgent method is still subject to certain conditions, including the approval of the concerned Minister or head of the concerned public entity based on a recommendation by the Tender Committee. In addition, the public entity must negotiate the supply of the needed products or services with at least three bidders, selecting one of the three.
Competition: This exceptional method can be followed in cases where the required services involve making studies or preparing designs, outlines, stereographs, or other technical works necessary for a specific project.
Direct agreement: This is also one of the methods used for urgent needs, when such urgency does not allow the public entity to follow the process of a Public Tender.
This exception requires the approval of the head of the concerned public entity based on a recommendation from the Tender Committee. This method applies in certain cases including emergencies, urgency or if the needed products or services are available only with a single provider.
The Qatar Tender Law does not specify penalties for violating its rules. However, the law provides for administrative measures that can be taken against violating contractors, such as terminating the contract or black-listing the contractor temporarily or permanently. The criminal penalties are determined mainly in accordance with the Penal Code. The most common crimes which are directly linked to violations of the Qatar Tender Law are bribery, intentional damage to public funds (by for example increasing prices, providing unneeded supplies, and preventing other traders from competing which prevented reaching to better deals with other suppliers), abuse of position and money laundering.
It is generally understood that offering and paying sums of money and/or benefits to a public official in exchange for violating the freedom and integrity of tenders or facilitating any unlawful gain constitutes bribery. However, Article 142 of the Penal Code specifies that accepting sums of money and/or benefits by a public official after committing an act (or abstaining from doing an act) as a reward from the person benefitting from the act, even without any prior agreement between the two parties, also establishes a crime of bribery. This crime is punishable by imprisonment for a period not exceeding 7 years and a fine not exceeding 15 thousand Qatari Riyals.
Public Tenders may be the most common and transparent tendering method. This may practically reduce the risk of unintentionally breaching the Public Tender Law by any bidding company. Bidding for any tender or contract under any of the five exceptional tendering methods requires more attention by companies to ensure compliance with the Qatar Tender Law and other laws in Qatar.
Offering any gifts to public officials, including stationery and hospitality should be carefully considered, especially in terms of value to comply with the law and acceptable practice in Qatar whether before, during, or even after participating in any tendering method.
If in doubt, it is always recommended to seek legal advice.
For further information,please contact Diana Abu Al Adel.
Published in December 2024
