Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
The Qatari government is the biggest end user of a wide range of products and services. In November 2015, the Amir issued a new procurement law No. 24/2015, which was enacted in June 2016. The law disbanded the Central Tendering Committee (which was the mechanism used under Law No. 26/2005) and created a Government Procurement Department within the Ministry of Finance which has oversight of most government tenders. The new department also created a website to consolidate all tenders and provide relevant information to interested bidders, facilitating the process for overseas investors. The law aimed to promote a fair, transparent, simple, and speedy tendering process, permitting each regulated government entity to create its own tender committee, whose members must include representatives from the Ministry of Finance and the Diwan Audit Bureau.
Bid and performance bonds are required in the form of unconditional bank guarantees with a local bank or certified local bank checks. The standard bid bond is 5% and performance bond is 10% of the contract. However, the above rate can be larger for certain projects. Foreign architectural, contracting, and engineering firms are not required to have a local presence for the bid process. However, by the time a contract is ready to be signed, participating foreign firms may need to have satisfied local establishment requirements. It is important to note that the government ministry requesting the bid has the right, during the contract period, to increase or decrease the required services, materials, or deliverables, after the committee’s approval.
Government contracts may include arbitration clauses. Unless stated otherwise in the contract, disputes emanating from government contracts will be subject to arbitration in Qatar. U.S. firms are advised, whenever possible, to reserve the right to appeal local arbitration decisions abroad.
Foreign and local contractors are usually paid 20% of the contract awarded to them against unconditional bank guarantees. Further payments are made according to a standard payment schedule based on the progress of the project. It should be noted that the payment schedule almost always authorizes the government to retain portions of payments due until after the completion and acceptance of the project. Foreign and local contractors may experience delayed payments, which do not accrue interest, usually due to bureaucratic red tape.
Arabic is the official language in Qatar, though English is widely used. Bids should be in Arabic unless the tender document specifically indicates that English is required or accepted. Specifications generally conform with British/European and, in recent years, U.S. standards.
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.
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 by borrowing from the Multilateral Development Banks (MDB). Please refer to the Project Financing Section in Trade and Project Financing for more information. View more information on working with Commerce liaisons at the MDBs.
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.