Discusses the legal requirements for selling to the host government, including whether the government has agreed to abide by the WTO Government Procurement Agreement or is a party to a government procurement chapter in a U.S. FTA. Specifies areas where there are opportunities.
For any types of government procurement project, U.S. firms must have a legal presence in the UAE and acquire their goods and services on a prequalified basis individually with the various government departments for procurement tenders. It is possible for bids to be sole sourced or to be awarded to select, pre-qualified contractors rather than to be competed via public tender at the discretion of the relevant governmental party, generally in the case of urgent need. Federal purchases are administered through the respective federal offices located in Abu Dhabi and/or Dubai. At an emirate level, purchases for goods and services are done directly by the institution depending on its needs.
For most civilian purchases, government entities prefer to deal with firms registered in the UAE, or in their particular emirate, and will favor local products over imports. Federal Law No. 2 of 2014 gives preference to Emirati entrepreneurs, and is designed to help Emirati small-and-medium-sized businesses secure more business.
Only when goods or services of desired quality are not available locally will the procurement authority seek outside sources. The government continues to limit direct procurements and requiring companies to make the arrangements for a local presence. Invitations to participate in government procurement tenders are usually sent only to the pre-qualified companies, and some are advertised in newspapers.
In-Country Value (ICV)
As part of its efforts to grow and diversify its economy through nurturing local and international partnerships and opportunities, improving knowledge transfer and creating job opportunities for UAE nationals in the private sector, the UAE has implemented an In-Country Value (ICV) system when evaluating commercial bids and inviting companies to participate in government-issued tenders. The Abu Dhabi National Oil Company (ADNOC) has launched its own ICV program in 2018, mandating all suppliers are declare their ICV scores for consideration on tenders (ICV Certificate). ADNOC requires an annual third-party verification of the numbers of the ICV Certificate to be conducted. Senior-level officials have signaled ADNOC’s ICV pilot program could be expanded across additional sectors, after purportedly retaining $4.9 billion in Abu Dhabi’s coffers in 2018.
Competition in the public sector is very strong. Aside from large military procurement projects, governments in the UAE invest heavily in infrastructure projects, such as roads, power generation and distribution systems, desalination facilities, sewage systems, public housing, recreational facilities, hospitals and other medical facilities and services, schools, national security projects, athletic facilities, refineries and other hydrocarbon facilities, airports, and government buildings.
The UAE partner of the U.S. company is usually responsible for registering the U.S. product or service with the UAE government. The following documents are usually required for the registration:
- Ministry of Economy Certificate
- Reference List
- Last 3 years audited bank statement
- ISO, or other relevant, certifications
- Quality and HSE manuals
- Questionnaire that will be provided by the U.S. company
Though the English language is widely used in the UAE, the ability to communicate in Arabic is mandatory when communicating with the government.