Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Malta occasionally borrows from Multilateral Development Banks, such as the European Investment Bank (EIB), to finance some public projects. However, it finances most public projects through local and EU funding and public-private partnerships.
Government purchases of capital equipment and supplies play an important role in the country’s commercial environment. Malta is a member of the EU and adheres to the GATT Procurement Code. The Department of Contracts, which falls under the Ministry of Finance, publishes tenders for government purchases and ensures adherence to stated conditions. Normally, the Ministry that requests the goods/services in the tender has a final say in the award.
International obligations under the WTO Government Procurement Agreement (GPA) and EU-wide legislation under the EU Public Procurement Directives govern public procurement in Europe. U.S.-based companies may bid on public tenders covered by the GPA, while European subsidiaries of U.S. companies may bid on all public procurement contracts covered by the EU Directives in the European Union.
The EU directives on public procurement have recently been revised, and new legislation on concession has also been adopted. Member States were required to transpose the provisions of the new directives by April 16, 2016. The four relevant directives are:
- Directive 2014/24/EU (replacing Directive 2004/18/EC) on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts applies to the general sector;
- Directive 2014/25/EU (replacing Directive 2004/17/EC) coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors;
- Directive 2009/81/EC on defense and sensitive security procurement, setting Community rules for the procurement of arms, munitions and war material (plus related works and services) for defense purposes, and the procurement of sensitive supplies, works and services for non-military security purposes; and
- Directive 2014/23/EU on the award of concession contract. A concession contract (either for the delivery of works or services) is conducted between a public authority and a private enterprise that give the right to the company to build infrastructure (e.g. highways) and operate businesses that would normally fall within the jurisdiction of the public authority.
The EU has “remedies” directives imposing common standards for all EU Member States to abide by in case bidders identify discriminatory public procurement practices. Electronic versions of the procurement documentation must be available through an internet URL immediately on publication of the Official Journal of the European Union (OJEU) contract notice. Full electronic communication (with some exceptions) became mandatory for public contracts since October 2018. Central purchasing bodies also must publish their contracts and tenders and requests for tenders since April 2017.
Electronic invoicing (e-invoicing) was introduced in the third quarter of 2018 in accordance with Directive 2014/55/EU, which makes receipt and processing of electronic invoices in public procurement obligatory. The European Committee for Standardization (CEN) is developing standards for e-invoicing.
There are restrictions on U.S. suppliers in the EU utilities sector, both in the EU Utilities Directive and in EU coverage of the GPA Article 85 of Directive 2014/25 allows EU contracting authorities to either reject non-EU bids where the proportion of goods originating in non-EU countries exceeds 50 percent or give preference to the EU bid if prices are equivalent (meaning within a three percent margin). Moreover, the Directive allows EU contracting authorities to retain the right to suspend or restrict the award of service contracts in third countries where no reciprocal access is granted.
There are also restrictions in the EU coverage of the GPA that apply specifically to U.S.-based companies. U.S. companies may not bid on works and services contracts procured by sub-central public contracting authorities in the following sectors:
- Water sector
- Airport services
- Urban transport sector as described above and railways in general
- Dredging services and procurement related to shipbuilding
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
U.S. exporters selling to the Maltese government should expect payment several months after delivery. It is standard practice for the government to pay successful bidders more than 60 days following the delivery of the supply of goods or services, and 150 days in the case of medicines. In addition, EU-funded bids require the supplier to lodge a bid bond; non-EU funded tenders valued over $240,000 also require a bid bond. Although foreign companies can bid on Maltese government tenders directly, it is advisable to appoint a local agent to complete the bid process.
Multilateral Development Banks and Financing Government Sales.
Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks (PDF). The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.
Learn more by contacting the MDBs applicable for Malta: