The Role Of Tender And Bid Committees According To A Recent Amendment To The Executive Regulations Of The Tender Law

• Published date: 20 January 2023
• Subject Matter: Finance and Banking, Government, Public Sector, Financial Services, Constitutional & Administrative Law, Government Contracts, Procurement & PPP
• Law Firm: Sultan Al-Abdulla & Partners
• Author: Mohamed Fouad and Rana ElBashir

An amendment to the provisions of the Executive Regulations of Law No. 24 of 2015 Regulating Tenders and Bids ("Tender Law") has been published in the August 4, 2022 volume of the Official Gazette. The Executive Regulations were amended by virtue of Council of Ministers Decision No. 11 of 2022 ("Amendment"). According to the Amendment, the term "settlement agreement" is defined as a final, written agreement between a governmental department and a contracting party to settle the financial and contractual rights and obligations of each contracting party after terminating or concluding a contract that is subject to the Tender Law. Under the Amendment, settlement agreements must be reviewed by the in-house Tenders and Bids Committee ("Tender Committee") of a government entity. To better understand the impact of the Amendment, we set out below the key differences between the roles of the Tender Committee and the Compensation and Claims Committee¹ ("CCC") with respect to settling contractual claims.

Each governmental entity has its own Tender Committee. A Tender Committee is responsible for conducting tenders in accordance with the provisions of the Tender Law and its Executive Regulations. It must consist of 5-7 members who are generally employees of the relevant government entity. Its function is, among others, to review settlement agreements with contractors, provided that these settlement agreements do not include contractor compensation/damages.

On the other hand, the CCC is a single committee that operates under the Ministry of Finance and has members from various governmental authorities and ministries. It is mandated to review and eventually pass recommendations to the Minister of Finance regarding compensation claims submitted against government bodies, with a particular focus on compensation claims by those entities for delays in the performance of their obligations arising from contracting, supply and service contracts.

Article 1 of the Amendment replaces Article 11 of the Executive Regulations with the following text:

"The [Tender] Committee's Competence is as follows:

...

6. Examining the requests for the settlement of contracts submitted by the Competent Department² and expressing its opinion thereon, provided that it does not contain a claim for compensation by the contractor.

Requests for settlements shall be submitted to the [...