Selling to the Government
State procurement is regulated by the 2015 Law on State Procurement and several amendments, and applies to ministries, state agencies and companies and enterprises in which the state holds more than 50% of the shares. In 2014 the law was amended to allow vendors from member countries of the Eurasian Economic Union to participate in public procurement tenders on equal terms with domestic suppliers. Kazakhstan has not acceded to the WTO’s Agreement on Government Procurement, though the Government of Kazakhstan did notify the WTO in November 2019 of its intent to begin negotiations to accede to the Agreement.
The latest amendments to the law include a clear definition of “dumping price” to avoid underpricing, introduction of a complaints’ register, requirements to exclude non-financially sound suppliers and offshore zone registered companies, measures to prevent unfair advantage by obtaining access to competitor information and changes to the principles for making single source procurements.
The procurement system in Kazakhstan is highly decentralized with different government agencies and companies managing specific procurement projects. The Ministry of Finance develops procurement policies, and the Committee for Public Procurement is responsible for enforcing the laws and regulations on public procurement. The state procurement process is implemented through mandatory tenders announced by government agencies. Newspapers designated by the Committee for Public Procurement publish the tender opportunities.
To facilitate the procurement process, the government created an e-procurement portal (https://egov.kz/cms/en/articles/procurement_portal). The State procurement website (available only in Kazakh and Russian) was launched in 2008 and the E-finance Center (website is in Kazakh, Russian and English) was assigned as the sole operator in electronic state procurement. Kazakhstan’s state procurement regulations seek to provide international standards of transparency and public accountability. However, what appears in print and what happens in practice can be very different. Short deadlines for tenders (suggesting a preselected supplier), lack of transparency in business dealings and nonpayment issues remain a challenge. The regulations often favor domestic suppliers over foreign companies. Lucrative opportunities do exist, however, and American companies have had success bidding on projects in Kazakhstan. U.S. companies are advised to approach any government tender deliberately. Companies are advised to seek payment guarantees and be wary of payment-after-service arrangements.
U.S. companies bidding on government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center, coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Financing of Projects
Large infrastructure projects in Kazakhstan are often financed through multilateral development banks such as the Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), and the World Bank, as well as through the Development Bank of Kazakhstan. Commercial financing, such as bank loans and private equity, is also used.