Law No. (12) of 2020
Concerning
Contracts and Warehouse
Management in the Government of Dubai[1]
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We, Mohammed
bin Rashid Al Maktoum, Ruler of Dubai,
After
perusal of:
Federal Law
No. (5)
of 1985 Issuing
the Civil Code of the United Arab Emirates and its
amendments;
Federal
Law
No. (1) of 2006 Concerning Electronic
Transactions and e-Commerce;
Federal
Decree No. (55) of 2002 Concerning the Economic Agreement between the Gulf
Cooperation Council Countries;
Law No. (5) of 1995 Establishing the Department of
Finance;
Law No. (6) of 1997 Concerning Contracts of Government
Departments in the Emirate of Dubai and its amendments;
Law No. (3) of 2003 Establishing the Executive Council of the Emirate
of Dubai;
Law No. (12) of 2004 Concerning the Dubai International
Financial Centre Courts and its amendments;
Law No. (23) of 2009 Concerning the Mohammed bin Rashid
Establishment for Small and Medium-sized
Enterprises
Development and its amendments;
Law No. (6) of 2011 Regulating Participation of the
Private Sector in Electricity and Water Production in the Emirate of Dubai;
Law No. (13)
of 2011 Regulating the Conduct of Economic Activities in the Emirate of Dubai
and its amendments;
Law No. (22)
of 2015 Regulating Partnership between the Public Sector and the Private Sector
in the Emirate of Dubai;
Law No. (26)
of 2015 Regulating Data Dissemination and Exchange in the Emirate of Dubai;
Law
No. (30) of 2015 Establishing the Smart Dubai Government Establishment;
Law
No. (1)
of 2016 Concerning the Financial Regulations of the Government of Dubai;
Law
No. (13) of 2016 Concerning the Judicial Authorities in the Emirate of Dubai;
Law
No. (4) of 2018 Establishing the Financial Audit Authority; and
Decree No.
(24) of 2007 Forming the Supreme Fiscal Committee in the Emirate of Dubai and
its amendments,
Do hereby issue this Law.
This Law
will be cited as "Law No. (12) of 2020
Concerning Contracts and Warehouse Management
in
the Emirate
of Dubai".
The
following words and expressions, wherever mentioned in this Law, will have the
meaning indicated opposite each of them unless the context implies otherwise:
|
UAE: |
The United Arab Emirates. |
|
Emirate: |
The Emirate of Dubai. |
|
Ruler: |
His Highness the Ruler of
Dubai. |
|
Government: |
The Government of Dubai. |
|
Executive Council: |
The Executive Council of the
Emirate of Dubai. |
|
SFC: |
The Supreme Fiscal Committee
formed pursuant to the above-mentioned Decree No. (24) of 2007. |
|
DOF: |
The Department of Finance. |
|
SDGE: |
The Smart Dubai
Government Establishment. |
|
Government Entity: |
Any of the Government
departments, public agencies or corporations, Government councils or
authorities, or other entities affiliated to the Government. |
|
Director General: |
The director general of a
Government Entity or any other officer holding a similar position. |
|
Competent Authority: |
A Person authorised pursuant to
the provisions of this Law to select the appropriate Procurement Method or Method
of Disposal of Assets, and
to conclude Contracts. |
|
Concerned Unit: |
The organisational unit(s)
responsible for the management of Purchases and for Inventory Management
within a Government Entity. |
|
Contract: |
A paper or electronic agreement
concluded by a Government Entity with a Supplier to provide that entity with Purchases it
needs; or an
agreement concluded by a Government Entity with others to dispose of the Assets of
that entity, in accordance with the provisions of this Law and the
resolutions issued in pursuance hereof. |
|
Procurement: |
The process of supplying a Government Entity with Purchases it
needs through a Procurement Method. |
|
Purchases: |
The works, materials, services,
and the like, needed by a Government Entity. |
|
Assets: |
The movable and immovable
property, and material and moral rights, that are held, managed, operated, or actually controlled by a Government
Entity.
These include, without limitation, land, buildings, vehicles,
machinery, equipment, systems, software, patents, and copyrights. |
|
Inventory Management: |
This includes, without
limitation, all processes and procedures related to the efficient and
effective planning, designing, provision, recording, preservation, allocation,
use, operation, maintenance, protection, and Disposal of Assets. |
|
Disposal of Assets: |
Disposition by a Government Entity of its
Assets through sale, lease, or any other revenue-generating method; or through recycling,
destruction, or donation of the same, in accordance with the provisions of this Law and
the resolutions issued in pursuance hereof. |
|
Procurement Method: |
This
includes any
public tender, limited tender, direct agreement, negotiation, or competitive tender, whose
conditions, rules, and procedures are stipulated in this Law and the
resolutions issued in pursuance hereof. |
|
Method of Disposal of Assets: |
This
includes any auction, negotiation, or direct agreement, whose conditions, rules, and
procedures are stipulated in this Law and the resolutions issued in pursuance
hereof. |
|
Supplier: |
A Person with whom a Government
Entity contracts, in accordance with the provisions of this Law, to provide Purchases it needs. This includes civil contractors, suppliers of
materials,
and service providers. |
|
Consultant: |
A Person with whom a Government
Entity enters
into a Contract to
supervise the project subject of that Contract. |
|
Bid: |
A paper or electronic document
that is submitted by a
Person with whom a Government Entity wishes to contract in accordance with
the provisions of this Law and the resolutions issued in pursuance hereof;
and that states the prices and the technical, financial, and contractual
specifications and conditions offered by that Person in respect of the relevant Procurement or Disposal of
Assets. |
|
Award Letter: |
A paper or electronic notice
addressed by a Government Entity to a winning bidder informing him
of the acceptance of his Bid. |
|
Bid Bond: |
The guarantee provided by a Person wishing to enter
into a
Contract
with a Government Entity, in accordance with this Law and the resolutions
issued in pursuance hereof, to prove the seriousness of his intent to enter into that Contract. |
|
Performance Bond: |
The guarantee provided in
favour of a
Government Entity by a
Person contracting
with that
entity, in accordance with this Law and the resolutions issued in pursuance
hereof, to
ensure the
performance of his obligations under the Contract. |
|
Variation Order: |
An
order issued by
a Government Entity to a Supplier to change or modify the quantities,
specifications, design, or terms of delivery
of Purchases; or to change or modify the
dates or method of performance of the Contract, in accordance with the rules
and procedures stipulated in this Law. |
|
Purchase Request: |
A paper or electronic document
that contains the standards related to the quantities, types, and specifications of the
materials, services, or
works to be procured; and any other technical, financial, or contractual
requirements that must be complied with when conducting Procurement. |
|
Purchase Order: |
A paper or electronic document
issued by a Concerned Unit to a Supplier, based on which the Purchases needed
by the Government Entity are
provided. This
document contains the specifications and prices of the Purchases and the Concerned Unit’s approval of the Bid submitted by the
Supplier based on the details of the Purchase Request and
submitted Bids. |
|
Commencement Order: |
A paper or electronic document
issued by a Concerned Unit to a Supplier to commence the performance of the Contract. |
|
Inventory Planning: |
A plan prepared by a Government
Entity to specify the materials it needs, on an
annual basis, in
its estimated budget for the relevant Financial
Year. |
|
Initial Receipt: |
The temporary receipt of the
Purchases procured for
a Government Entity, in accordance with the provisions of this Law, in
preparation for completing the Final Receipt procedures. |
|
Final Receipt: |
The final receipt of the
Purchases procured for
a Government Entity, in
accordance with the provisions of this Law. |
|
Electronic System: |
The Government central
electronic system for the management of Contracts and inventory, including
its subsystems and programmes. |
|
Committee: |
Any of the committees formed,
as the case may be, in a
Government Entity pursuant to the provisions of this Law; or any other specialised committee formed within the Government Entity as mandated
by the nature of its business. |
|
Person: |
A natural person or a public or
private legal person. |
This Law
aims
to:
1.
develop a modern and up-to-date framework that establishes
the rules, procedures, and methods for procuring the Purchases needed
by Government Entities, in line with the
vision of the Emirate, the present and future
policies and orientations
of the Government, and the relevant international best practices;
2.
develop an effective system that enables Government
Entities to achieve the highest levels of quality, efficiency, and
effectiveness in procuring their Purchases and managing their warehouses;
3.
encourage the joint procurement of Purchases for
Government Entities to ensure cost effectiveness and efficiency of the same;
4. achieve
the highest level of cost-efficiency in procuring Purchases at fair
and competitive
prices;
5.
promote integrity and transparency, and uphold the
principles of equal treatment and equal
opportunities among
the Suppliers providing Purchases;
6. provide a legal framework for
automation of the Procurement and Inventory Management processes at Government Entities in line with the Government’s vision for the adoption of smart transformation in managing all Government business and
activities;
7. standardise
the rules and procedures for concluding Contracts and for the efficient and effective Inventory Management within the Government, through governance of the procurement of Purchases, Disposal of
Assets, and
Inventory Management; and
8. preserve, and
efficiently and effectively manage, Government Assets.
a. This Law applies
to:
1.
all the Contracts concluded or renewed by
Government Entities after
the effective date of this Law; and the management by these entities of their
inventory;
and
2. the Contracts concluded by Government Entities
before the effective date of this Law in respect of any matter not provided for in these
Contracts or in the law under which they have been concluded.
b.
This Law does
not apply to the following Government Entities, projects, and
Contracts:
1.
any Government Entity which is established, or whose
business is
regulated, under legislation that stipulates that its Contracts and Inventory Management
be governed by special regulations;
2.
any Contract, project, Purchases, or Government Entity which is
exempted from compliance with the provisions of this Law pursuant to a
resolution of the Chairman
of the Executive Council or his authorised representative; and
3.
any Partnership Agreement which is governed by the
above-mentioned Law No. (6) of 2011 or Law No.
(22) of 2015.
All
Government Entities governed by this
Law must, in procuring their Purchases, disposing of their Assets, or managing their warehouses, comply
with the provisions of this Law and the resolutions issued in pursuance hereof, and with the provisions of the Procurement templates and policies adopted by the DOF. Any disposition undertaken in breach of these provisions will be voidable where
the public interest so requires.
For the
purposes of this Law, the DOF will, in coordination with the concerned Government
Entities, have the duties and powers to:
1.
prepare a manual for governance
of Purchases, Disposal of Assets, and
Inventory Management, in line with
the provisions of this Law and the resolutions issued in pursuance hereof;
2. develop
the policies
related to uniform Procurement, fixed prices,
and any other method that ensures efficiency of the joint procurement of
Purchases,
namely materials and services, for Government Entities; and conclude the relevant Contracts;
3. prepare a guidelines manual on the Disposal of Assets by
Government Entities, whether with or without consideration;
4.
prepare guiding templates for the general conditions of Contracts.
Government Entities may use their own
templates, provided that these
templates do not
conflict with the guiding templates developed by the DOF;
and
5.
perform any other duties
required for the achievement of the objectives of this Law.
For the purposes of this Law, the SDGE will, in coordination with Government
Entities, create, operate, maintain, update, and supervise the Electronic
System; and follow up compliance by Government Entities with the rules for using this system.
For the purposes of this Law, the Concerned
Unit will, in
coordination with the competent organisational units within the Government Entity, have the duties and powers to:
1. develop, in accordance with the relevant international best
practices, the standards for the procurement of Purchases and Disposal of Assets of the
Government Entity; and submit the same to the Director General for approval;
2. develop the plans required for
Inventory Management within the Government Entity, and
submit the same to the Director General for approval;
3. analyse and categorise the
requested Purchases in terms of quality and price;
4.
propose the appropriate Procurement Methods and
Methods of Disposal of Assets, and obtain the Competent Authority’s approval of these methods;
5.
procure Purchases and secure after-sale services at
the best prices and with the best specifications;
6.
provide the necessary
Data
on the requested Purchases
or the Assets to be
disposed of;
7.
classify Suppliers,
follow up their
performance,
and prepare periodic reports on their performance of the Contracts
concluded with them;
and submit the same to the Competent Authority;
8.
register Suppliers
on, or strike them off, the relevant records and rolls maintained by the Government
Entity; and coordinate with the SDGE to
update the Electronic System accordingly;
9.
submit to the Competent Authority recommendations on imposing penalties and
measures against Suppliers
who fail to perform the Contracts concluded with them;
10. prepare
the documents related to Procurement and Disposal of Assets, and
draft the relevant Contracts, in
accordance with this Law, the
resolutions issued in pursuance hereof, and the relevant templates approved by the DOF;
11. follow
the pre-contract
procedures in respect of concluding Contracts
of
Procurement and Disposal of Assets;
12. provide
administrative and technical support to the Committees formed within the Government Entity
pursuant to the provisions of this Law;
13. follow up the performance of
Contracts, Purchase Orders, and Commencement Orders;
14. implement the Electronic System and
supervise the entry
of information
and Data therein
through the relevant process prescribed by the DOF;
15. create and update a database of
all Purchases; categorise these Purchases based on their nature; and link the
database to the Inventory Planning systems;
16. plan and supervise
Inventory
Management, and submit the relevant
recommendations to the
Director General; and
17. perform
any other duties assigned to it under this Law and the resolutions issued in pursuance
hereof, or assigned to it by the Director General or the Committees formed pursuant to this Law.
Procurement and Disposal of Assets will be conducted in accordance with the steps prescribed in the relevant
resolution of the Director General. These steps must include the following:
1.
The Concerned Unit will, in
coordination with the competent organisational units within the Government Entity, draft a
memorandum containing
its relevant recommendations on the Procurement or Disposal of
Assets;
and will submit the same to the Competent Authority.
2.
The Competent Authority will
review the memorandum drafted by the Concerned Unit and
give the relevant
directives as it deems appropriate, including
referring the
matter to the competent Committee.
3.
The competent Committee will
consider the matter and perform the duties vested in it in respect of the Procurement
or Disposal of Assets, and will submit the
relevant recommendations to the Competent Authority to determine the
Procurement Method or Method of
Disposal of
Assets.
4.
The decision of the Competent
Authority will be referred to the competent
Committee to proceed with the Procurement or
Disposal of Assets in accordance with the provisions of this Law.
5.
The competent
Committee will, in accordance with the provisions of this Law, determine the
winning bidder;
and will submit the
relevant recommendations to the Competent Authority to approve the award
decision and conclude the Contract.
6.
Upon approval of the Award Letter by the Competent
Authority and conclusion of the Contract, the
competent
Committee will follow up the performance
of the Contract by the
Concerned Unit in accordance with the provisions of
this Law.
a.
The Concerned Unit will, in coordination with the
competent organisational units within the
Government Entity,
prepare the documents related to Procurement or
Disposal of Assets, as the
case may be. These documents must include:
1. the detailed specifications of
the requested Purchases or detailed description of the Assets to be disposed of;
2. the conditions of Procurement or
Disposal of Assets; and
3. the general and particular conditions of the Contract and its
appendices.
b. Neither the Concerned Unit nor
any of the Government Entity’s employees may, in the course of preparing the
documents referred
to in
paragraph (a) of this Article, disclose any information or Data that may undermine the interests of the Government Entity, the proper
management of the Public Funds, or
the principle of fair competition among bidders.
a. In establishing the specifications related to Procurement or Disposal
of Assets, the Concerned Unit must, in coordination with the
competent organisational units within the
Government Entity:
1.
clearly and accurately determine
the nature, description, quantity, and type of the requested Purchases or the Assets to be disposed of;
2.
clearly and accurately determine all technical
specifications of the requested Purchases;
3.
determine the
specifications related to performance and operational requirements;
4.
approve the technical
specifications based on the recognised international Procurement standards, and
in line with the needs of the Government Entity; and
5.
avoid referring to a
specific trademark, trade name,
patent, copyright,
design, type, source, or Supplier unless the public interest requires otherwise.
b.
Notwithstanding the
provisions of paragraph (a) of this Article, where the technical specifications related to Procurement or
Disposal of Assets cannot be developed by the Concerned Unit, this unit may:
1.
seek the assistance of an
external Consultant
to develop
or assist in developing
the specifications. This Consultant must be selected and contracted in
accordance with the provisions of this Law and the resolutions issued in
pursuance hereof, and must not have any direct or indirect interest in the
requested Purchases. Priority must be given to UAE
national Consultants; and
2.
determine the
general requirements relating to the Purchases,
and invite bidders to propose the specifications that meet the needs of the Government
Entity.
a. A
Central
Register of Suppliers will be created within the Electronic System. This
register will be managed, supervised, and regularly updated by the SDGE.
Government Entities will enter the Data specified in paragraph (b) of this
Article in the Electronic System.
b.
The form and categories of the Central Register of
Suppliers, and the Data that must be entered therein,
will be determined
pursuant to a resolution of the Chief Executive Officer of the
SDGE. This register must contain the following
essential Data:
1.
the names, addresses, and names of legal
representatives of Suppliers;
2.
the legal form, commercial
licence
details, and names of legal representatives of Suppliers, in case of companies and corporations:
3.
the areas of business of
Suppliers;
4.
the categories of Suppliers
based on the classification criteria adopted by the Government Entity;
5.
the exclusive agency rights
held by Suppliers, if any;
6.
the Procurement Contracts
concluded with Suppliers and their track records with Government Entities;
7.
assessment of the
performance of Suppliers based on previous Contracts;
8.
the extent of fulfilment by
Suppliers of their social responsibility in the UAE; and
9.
the measures and penalties
taken against Suppliers, if
any.
a. A Government Entity may create a list of pre-qualified companies, corporations, and
individuals whose activities are related to its business. This list must
include the essential Data contained in the Central Register of Suppliers
referred to in paragraph (b) of Article (12) of this Law, and must be linked to this register in coordination with the SDGE.
b. The Concerned Unit will be
responsible for managing, supervising, and updating the list referred to in
paragraph (a) of this Article. This list will serve as a reference for procuring specific types and
categories of Purchases needed by the Government Entity. In preparing this list, Suppliers will
be categorised
based on their
specialities, qualifications, capabilities, and skills.
c. Suppliers will be recorded in the list referred to in
paragraph (a) of this Article in return for a fee to be determined
pursuant to a resolution of the Chairman of the Executive Council.
Each Government Entity will establish a set of technical and
financial principles for the procurement of its Purchases. In establishing these
principles, the following must be taken into account:
I. Availability
of Financial Appropriations
It must be verified that the financial
appropriations required
to pay for the Purchases are available in the annual
budget of the Government Entity.
II. Actual
Need for, and Acceptable
Level of Quality of, Purchases
The following must be ensured:
1.
The Purchases are needed to enable the Government
Entity to perform its functions and conduct its business and activities.
2. The Purchases meet the actual needs of the
Government Entity.
3. The Purchases meet the prescribed
specifications.
4. The Purchases meet the acceptable
levels of quality prevailing in the market.
5. The stocking and consumption
levels
are observed, and
no similar or alternative items that satisfy the intended purpose of the Purchases
are available
in the warehouses.
III. Economic
Feasibility
Where the value of the Purchases needed by the Government Entity exceeds
one million dirhams (AED 1,000,000.00), the financial, economic, and technical
feasibility studies required for procuring these Purchases must be conducted.
IV. Fair Value of Purchases
The following must be ensured:
1.
The prices
of the Purchases are clearly
and accurately specified.
2.
The prices of,
and costs of using,
the Purchases are commensurate with the
benefits expected to be derived from them throughout their useful life.
3.
The prices of the Purchases include the costs expected
to be
incurred in
using these Purchases.
4.
Unjustified costs or expenses are avoided.
V. Supplier’s Competence
The following must be verified:
1.
The Supplier's solvency, technical
capabilities, trustworthiness,
integrity,
and compliance
with the legislation in force.
2.
The Supplier’s performance
and track record in performing previous Contracts
with the
Government Entity or other Government Entities.
VI. Potential
Risks
In line with the
relevant policy adopted by the Government Entity, any
legal, technical, or financial risks that may result from procuring the Purchases must be
averted or minimised.
VII. Adaptability
The Purchases must be replaceable
and modifiable
whenever required throughout their useful life.
VIII. Accountability and Transparency
The Purchases must be procured in accordance with
the following:
1.
Procurement must be
conducted in a responsible and transparent manner.
2.
Procurement must be conducted in public.
3.
Competition must be encouraged, and clear and accurate
procedures must be followed.
4.
All Procurement procedures must be documented.
5.
As many as possible of the companies
and corporations
specialised in
providing the Purchases must be invited.
6.
Fair and equal opportunities must be granted to all
bidders, and none of
them may be given any preferential
treatment in
breach of the legislation in force.
IX. Avoiding
Conflict of Interest
The following will apply to the involvement of employees in any Procurement
procedures or decisions:
1.
An employee may not be involved in the Procurement process if his spouse, or any
of his relatives up to the fourth degree, has a
direct or indirect interest in the Procurement.
2.
In case of any direct or indirect conflict of
interest between
an employee and any of the bidders, the employee
must disclose that
conflict and withdraw from the Procurement process.
3.
An employee must disclose any
material or moral benefit
offered to him by any of the bidders participating
in the Procurement process.
The
following rules must be followed when conducting a Procurement process:
1. The company or corporation
to be
contracted with
must be
licensed and registered in the UAE, and authorised to provide the
requested Purchases where the that company or
corporation conducts its business in the UAE.
2. Unless otherwise mandated by a case of emergency or urgency, a bidder may not provide a Government Entity with Purchases without first receiving a
Purchase Order or Commencement Order and providing the required guarantees in
accordance with the provisions of this Law.
3. A bidder must be registered in
the Central Register of Suppliers where possible.
4. A Government Entity may, prior to
issuing any Purchase Order or Commencement
Order or delivering it to the bidder, suspend any part of the
Procurement
process without incurring liability for any loss or damage
that bidders may suffer.
5. Bids must meet the substantive
and formal requirements stated in the Purchase Request. However, a competent Committee may, in accordance
with the exigencies of public interest and pursuant to a reasoned decision,
accept Bids that do not satisfy these requirements, provided that these Bids
are consistent with the general principles
of the
Procurement process.
6. Bidders must submit their Bids by
the scheduled deadline. A Bid submitted after the scheduled deadline may be
accepted only if the competent Committee issues a reasoned decision accepting that Bid for the purpose of achieving the public interest.
7. A Government Entity must retain all intellectual property rights in the Bid documents
unless these rights are registered with the competent entities in the name of the bidder and are protected under the legislation in force.
a. A bidder must:
a. be a natural or legal person who
is a UAE national or a national of a Gulf Cooperation Council state;
b. not have been deprived, by the Government Entity requesting the Procurement, of the right to submit Bids;
c. not be an employee of the
Government Entity requesting the Procurement, whether he participates in the capacity of owner or partner;
d. be technically competent and financially capable of performing the Contract;
e. agree to the mandatory terms set by the Government Entity upon
initiating the Purchase Request;
f. meet the financial, technical,
and professional requirements stipulated in the terms of the Contract; and
g. meet any other conditions
determined by the Government Entity.
b. Notwithstanding the provisions of
sub-paragraph (a)(1) of this Article, a Government Entity may enter into
a Contract with a non-UAE national individual, with a company or corporation
licensed in a free zone in the Emirate or in any of the other emirates of the
UAE, or with a foreign company or corporation operating outside of the UAE, subject to satisfying the rules and conditions
stipulated in this Law and the resolutions issued in pursuance hereof.
a.
A bidder is prohibited from committing any of the
following acts:
1. offering,
giving,
requesting, or receiving anything of material
or moral value with the intent of influencing the Government Entity or its employees;
2. performing
or undertaking any act aimed to defraud the Government Entity, with a view to illegally obtaining a benefit or avoiding compliance with
an obligation under the legislation in force;
3. breaching any duty of confidentiality in
respect of the Procurement process; divulging any relevant Data or information that is
confidential by nature or
deemed confidential by the Government Entity, or disclosing
any Data related to the Procurement process without first obtaining the relevant approval of the
Government Entity;
4. agreeing or colluding with any Person to
submit, or withhold the submission of, any Bid that would negatively
affect any of the stages of the Procurement process, or that conflicts with the interests of the
Government Entity; and
5. undermining, or attempting to undermine, the interests of the Government Entity or its employees, or the public interest, in any
manner whatsoever.
b.
A Government Entity must take
the necessary measures and actions against any bidder who is proven to have
committed any of the prohibited acts referred to in paragraph (a) of this
Article.
This includes rejecting his Bid, revoking
his Contract, banning
future dealings with him, initiating any legal actions or
judicial proceedings
against him in accordance with the legislation in force, and claiming
compensation from
him for any damage sustained by the Government Entity. The ban on dealing with the Bidder must be recorded in the Electronic System in coordination with the DOF and the SDGE.
The Director General of a Government Entity will
determine the appropriate Procurement
Methods, approve award decisions, and sign or
terminate Contracts
within the limits of the relevant financial appropriations allocated in the
annual budget of the Government
Entity.
a.
For the purposes of conducting Procurement processes under this Law, the following Committees will
be formed in each Government Entity pursuant to a resolution
of its
Director General:
1.
a tenders and
negotiations Committee;
2.
a direct agreement
Committee; and
3.
a competitive tender Committee.
b.
Each of these Committees
must be comprised of a chairman, a vice chairman, and a number of experienced
and specialised members. Members must include
a
representative from the Concerned Unit, a
representative from the organisational unit in charge of
financial affairs, and a representative from the organisational unit in charge of legal
affairs; or their respective proxies.
c. The
chairman, vice chairman, and members of the Committee must submit a confidentiality,
non-disclosure, and
no conflict-of-interest undertakings, which
must be valid throughout their membership term in the Committee.
d.
Where necessary, the Committee
will be convened at the invitation of its chairman, or vice chairman in case of
absence of the
chairman. Committee meetings will be valid only if attended by at least two-thirds
of its members,
provided that the Committee chairman or vice chairman is in attendance.
e.
Resolutions and
recommendations of the Committee will be passed by majority vote of the attending
members;
and in the event of a tie, the chair of the meeting will have a casting vote.
f.
The proceedings of the meetings, decisions, and recommendations
of the Committee will be recorded in minutes signed by the chair of the meeting
and the attending
members, and will be maintained by the Concerned Unit.
g.
Where the Committee members
disagree with one
another on any matter, this must be recorded in the Committee minutes
of meeting. Where
the disagreement
is over a technical matter related to Procurement, the
chairman must refer the matter to a specialised technical Committee for opinion.
h.
A rapporteur will be appointed
to the
Committee by the Director General. The rapporteur will have the duties to:
1. notify Committee members of its meeting dates and times; and prepare, in coordination
with the Committee chairman, its meeting
agendas;
2. record the minutes of meetings of the Committee, and document
its resolutions and recommendations and follow up their implementation; and
3.
perform any other duties assigned to him by the
chairman of the Committee or the Director General.
In addition to the functions
assigned to it under this
Law, a Committee will, as
the case may be, have the duties and powers to:
1. verify that the specifications
prescribed for Procurement are satisfied and that the relevant documents are
provided;
2. consider Bids and submit the relevant recommendations to the
Competent Authority;
3. document all actions it takes in
minutes prepared in a clear and transparent manner;
4.
form sub-committees and specialised work teams; and seek assistance from experts and specialists,
from among the employees of the Government Entity or other Persons, to assist it in performing the
duties assigned to it under this Law without having the right to vote in its
deliberations; and
5.
perform any
other duties assigned to it by the Director General.
a.
A Government Entity must
determine the most
appropriate Procurement Method for
procuring the
Purchases it needs. This method will be determined
based on the nature and value of the Purchases;
the availability of companies, corporations, or
individuals that
are capable of providing these Purchases; and the urgency of the need for the
same.
b.
Suppliers will be
selected through one of the following Procurement Methods:
1. public tender;
2. limited tender;
3.
negotiation;
4. direct agreement; or
5. competitive tender.
Without
prejudice to the conditions,
rules, regulations, and procedures related to Procurement Methods, as stipulated in this Law, a Government Entity
will prepare a manual that contains the
standards, rules, and conditions for selecting each of the Procurement Methods stated in Article (21) of
this Law.
Public tender
is the primary Procurement Method. A public tender will be initiated through
public announcement using all available means within and/ or outside of the UAE. The public tender process and awarding will be conducted
in
accordance with the provisions of this Law.
a. The
Concerned Unit will, in coordination with the competent organisational units
within the
Government Entity, prepare the public tender documents and conditions before announcement of the tender. These
documents and conditions
must:
1. fully and clearly determine the
technical specifications of the requested Purchases;
2. specify the quantities of the materials to be purchased, the
schedules and bills of quantities of the required works, or the scope of the
requested services;
3.
where required for the public tender process, stipulate the provision of samples, guidelines manuals ‘catalogues’, illustrative
drawings, or implementation programmes that are approved by the
bidder;
4. stipulate that the prices of the requested Purchases and the pricing currency be specified in
the Bid, and
that these prices be quoted on a uniform pricing basis. The prices offered by the
Bidder will be quoted on FOB (free on board), CIF (cost, insurance, and freight), or C&F (cost and freight)
basis; or any
other uniform basis applicable to external tenders;
5. specify the place and date of delivery, basis of packaging, weight, size, measurements, and country of origin;
6. specify the start and end dates for submitting Bids and the
date of Bid opening;
7. stipulate that the Bidder guarantee the proper
performance of the requested
works and services; the validity of
supplied material;
and the performance of relevant maintenance throughout the period specified in the
public tender documents, and propose the guarantees required in this regard;
8. include the payment terms; and the guarantees for the implementation of works,
supply of materials, or provision of services;
9. include the penalty clauses, fines, and right to claim
compensation where applicable;
10. be drafted in Arabic in case of
local public
tenders.
Where necessary, tender documents may be drafted in both Arabic and any foreign
language, in
which case the Arabic text will prevail in the event of any discrepancy between the Arabic and the foreign
language versions. However, the tender documents and the specifications of any devices and technical equipment may be drafted in a foreign language only
in case of tenders that are announced outside of the UAE; and
11. include any other
Data or requirements prescribed by the Government Entity.
b. Notwithstanding the provisions of
paragraph (a) of this Article, a Government Entity may, in accordance with the
exigencies of public interest and based on the nature of
the Purchases to be procured, prescribe a special process for
preparing public tender documents and conditions, such as preparing and submitting bills of estimated quantities by the Suppliers based on the drawings and Contract
documents, or undertaking the designing and implementation by the Suppliers based on the Contract documents under the supervision
of a Consultant
The
Concerned Unit will, in coordination with the competent organisational unit
within the Government Entity, conduct a market price survey to determine the estimated
cost of the Purchases to be procured through public
tender. The survey and its outcomes will be submitted to the
tenders and negotiations Committee to be used as reference when
comparing the prices offered by bidders in the
public tender.
a. A
public tender will be announced sufficient time before the estimated date
of delivery of the requested
Purchases
in order to allow for reinitiating the tender where
necessary. The tender
will be announced
through the
Electronic System; and may also be announced through publication in at least two (2)
different daily newspapers, on the Government Entity’s website, or using
any other means
deemed appropriate
by the Government Entity. The announcement will be
made in Arabic, in both Arabic and a foreign language, or in a foreign language
only if
the announcement is required to be published outside
of the UAE only.
b. A public tender announcement must state the following
essential Data:
1. the reference number of the public tender;
2. the requested Purchases;
3. the method of submitting Bids and the entity receiving the
Bids;
4. the time frame for submitting Bids;
5. the validity period of the public tender Bids;
6. the fees for public tender documents; the method of
obtaining these documents; and the required guarantees; and
7. any other Data or requirements the Government Entity deems necessary to be announced.
a.
Upon the announcement of a public tender and collection of the tender document
fees, the tender documents approved by the Government Entity, which include the conditions,
lists, details, and specifications of the requested Purchases, will be provided to the Persons wishing
to participate in the tender.
b.
Where the public tender is
cancelled before Bid
opening, the fees for tender documents will
be refunded. Where
the tender is cancelled after Bid opening, these fees
will be refunded only
to the bidders who have submitted their Bids. However, if a
submitted Bid
fails to meet the prescribed specifications or conditions, the relevant tender document
fees may not be refunded.
In submitting public tender Bids, the following conditions and considerations must be observed:
1. Bids must be submitted in a
confidential manner within the time frame determined by the Government Entity,
and must be supported by the required documents and information.
2. Where requested by the Government
Entity, samples must be delivered against a delivery receipt.
3. Purchases must be priced in the UAE
official currency. The total price of
the Purchases must be written in figures and
letters; and in case of discrepancy, the price expressed in letters will prevail. Purchases may be priced in a foreign currency in case of external public
tenders.
4. Where a bidder fails to price an
item, he will be deemed to have excluded that
item from his Bid
for the public tender. However, his
Bid in respect of other items may be accepted in the event of a divisible
Contract, provided that it is in the
interest of the Government Entity to accept the Bid. In the event of an
indivisible Contract, the Government Entity may accept a Bid which includes an unpriced item if this is in the interest of
the entity. In that case, the unpriced item may be assigned the highest price included in other Bids for the purpose of
comparison, and the lowest price included in other Bids for the purpose of tender awarding. However, this will
not apply if the
Committee decides to exclude the Bid.
5. Submitted prices will be deemed
final, and may not be changed due to fluctuation of prices, currencies, taxes,
or fees. Prices will remain binding until the delivery of materials, completion of works, or
provision of services as per the prescribed schedules and at the specified places. The Government Entity may
request bidders to modify their prices only with the approval of its Director General and if this serves the interests of the Government Entity.
6. Bids submitted on the basis of
deducting a certain percentage from the lowest Bid will not be accepted, and
prices must be clearly and accurately specified for each item in the public
tender.
7. A participant may submit more
than one Bid for the same public tender, provided that each Bid is submitted
independently with a separate set of tender documents.
8. Under the pain of disqualifying the
Bid, a public tender participant may not omit, modify, or replace any of the
Bid items or any technical terms or specifications.
9. All Bid documents will be deemed
the personal property of the public tender bidder, and may not be assigned to third parties.
10. Negotiations may be conducted
with the winning bidder to secure any additional benefits for the Government
Entity.
Process for Submission and Receipt of Bids
Bids
will be submitted by bidders in the manner prescribed by the Government Entity
against a paper or electronic receipt notification.
In
determining the public tender Bid validity period, the following will apply:
1. The Bid validity period specified in the tender documents will be observed. The Government Entity may, under the same initially prescribed conditions and prices,
extend this period and the validity of the guarantees related to the Bid for a
maximum period of sixty (60) days from the date of expiry of the validity
period stated in the public tender documents. In this case, the bidder may not withdraw his Bid.
2. In case of supply of materials,
the period
required for any
tests,
chemical analyses, or
technical experiments will be taken into account. In case of works or services Contracts, the validity period may be extended as required on a case-by-case basis.
3. The period required for rendering
the tender award
decision, and notifying it to the winning bidder using paper or electronic means, either upon expiry of the original Bid validity period or any
extension thereof,
will be taken into account.
a. A Bid must be accompanied by a Bid Bond in the form of a cash amount, a certified
cheque, or
an
unconditional and irrevocable bank guarantee issued in favour of the relevant Government Entity by a bank operating
in the UAE; or any other guarantee determined by the Government Entity. The Bid Bond amount will be prescribed by the Government Entity, but must not exceed two percent (2%) of the estimated
value of the public tender.
b. The following categories will be
exempt from the requirement to provide a Bid Bond:
1. Government Entities;
2. corporations and companies
licensed in free zones or outside of the UAE, in case they are unable to
provide Bid Bonds while the Government Entity is in
urgent need of the requested materials or services;
3. any entity exempted from
providing Bid Bonds pursuant to the legislation in force; and
4. any entity partially or fully exempted by the DOF from
providing Bid Bonds.
c. A Bid Bond must be valid as from the Bid submission date and for at least thirty (30) days after expiry of the Bid validity. Where the Bid validity period is
extended, the bidder must extend the Bid Bond validity to cover the extension period, provided that the bidder is
requested to do so by the Government Entity.
d. A Bid Bond will be returned to
the successful bidder upon expiry of the Bid validity period, or before that
date if the tender is awarded and the Performance Bond is received from him.
Bid Bonds will be returned to bidders if the public tender is cancelled, their Bids are disqualified, or the tender is postponed for
more than sixty (60) days.
e. The Bid Bond will be confiscated
without the
need for a notice
or court judgement in any of the following cases:
1. where the participant in the public tender withdraws
his Bid before awarding
the tender.
2. where extension of the Bid validity
is decided but the
bidder refuses to extend the validity of his Bid Bond without a reason acceptable to the Government Entity;
3. where the winning bidder refuses
to sign the Contract; or
4. where the winning bidder fails to
provide the Performance Bond within the prescribed time limit.
a. Bids submitted by participants in public tenders will be opened
in public by the Committee, using
traditional or electronic means, on the date and time specified in the public
tender documents.
b. Notwithstanding the provisions of
paragraph (a) of this Article, the Committee may open Bids privately in case of supplies that must be dealt with in private for considerations related to the public interest.
c. When opening Bids, the Committee
must observe the following procedures:
1. verify the validity of the submitted Bids, record
their number, and assign each Bid a serial number along with the public tender reference number;
2. open Bids according to their
serial numbers; ensure that the relevant requirements
are fulfilled,
the required
documents are submitted, and the Bid Bonds are
provided; and disqualify incomplete Bids, stating the reasons for their disqualification;
3. prepare a list of accepted Bids,
the names of tender participants, and the total value of each Bid expressed in figures and letters; and highlight unpriced items and any other
reservations or conditions included in the
Bid;
4. submit Bid Bonds to the
organisational unit in charge of
financial affairs within the Government Entity for keeping and follow-up after
verifying that they meet the validity period and amount
requirements, and notify the Concerned Unit of the same;
5. record the receipt of samples, presentations, guidelines manuals 'catalogues', illustrative drawings, or
service programmes submitted by bidders in statements prepared for this purpose
or by issuing the relevant receipts; and
6. record the details of Bids on the
form prepared for this purpose in a manner that facilitates comparison between
them. Any conditions, remarks, or reservations made by bidders must also be recorded on this form.
The
Committee will conduct a financial assessment and a technical
assessment of the Bids and the samples, guidelines manuals 'catalogues', illustrative drawings, or service programmes attached
thereto; and will determine the final results of
these assessments. For this purpose, the Committee may seek the assistance of the competent organisational
units within the Government Entity or, as it deems appropriate, any
experts and specialists from among the employees of the Government Entity or other Persons, where the Bids and the attached items
require special assessment or thorough technical analysis. This must be
completed before the expiry of the original validity period of the Bids, or
any extension thereof prescribed by the Committee.
Where a sole Bid is submitted in a
public tender, the Committee may, after considering the Bid in light of the
financial and technical assessments, accept or reject that Bid in accordance with the
exigencies of the public interest. Where the sole Bid is rejected, the public
tender will be re-initiated. However, if a sole Bid is submitted again in the second tender, the Committee must consider the Bid and conduct a negotiation with the bidder. A Bid will be deemed a sole Bid even
if other Bids are submitted which do not meet the prescribed specifications and
requirements, or which contain reservations that lead to their
disqualification.
a. To ensure getting the best
prices and conditions, the Committee will negotiate with the bidders whose Bids are accepted in the following cases:
1. where the public tender documents
provide for the Government Entity's intent to negotiate with the bidders after submitting their Bids;
2. where the Government Entity is unable to determine the best Bid after completion of the evaluation of all Bids;
3. where there is a need to clarify the terms and conditions of the public tender documents;
4. where the prices included in the
Bids exceed the relevant
financial
appropriations allocated in the annual budget of the Government Entity;
5. in case any conditions are
stipulated, or any reservations are made, by the bidder whose Bid contains the lowest prices and meets all the prescribed specifications, in which case negotiations will
be conducted only with this bidder; and
6. in any other cases where the Committee deems the negotiations necessary to achieve the public interest, in which case the Committee’s
decision to negotiate must be reasoned.
b. Negotiations will be conducted
subject to the approval of the Competent Authority granted based on the recommendation of the
Committee. Proceedings of the negotiations will be documented
in minutes signed by the members
of the Committee and the persons involved in the negotiations.
In determining the winning Bid in a public tender, a
Committee must
observe the following rules:
1.
select the Bid with the lowest price that meets the
prescribed conditions and specifications. The Committee may accept the next lowest Bid if it is more compliant with the specifications, provided
that its decision in this respect is reasoned and supported by the financial and technical assessments of the Bids.
2.
Where the prices and specifications of two or more Bids are the same, the Committee may divide the
quantities among
the bidders
who have submitted
these bids if that division is feasible and is in the interest of work. The Committee
may also negotiate with these
bidders to get the lowest prices.
3.
Where the Bid of the lowest price contains
reservations and the next lowest Bid
does not include any reservations, the Committee may negotiate with the bidder
of the lowest price Bid to abandon his
reservations. If
this bidder
refuses to
abandon his reservations, the Committee may award the tender to the next lowest bidder or cancel the public tender if the cancellation is in the public interest.
4.
The Committee may cancel the public tender where the prices in all Bids exceed the prices estimated by the Government Entity, or exceed the prices included in the outcomes of the financial survey conducted by the Committee.
5.
Prices must be quoted on a uniform basis
in terms of
the net weight,
unit of weight, size, measurements, or place of delivery. For the purpose of comparing local and external Bids, the exchange rate of
foreign currencies at the date of Bid opening must be taken into account.
A Bid
will be disqualified pursuant to a reasoned decision of the
Committee in any of the following cases:
1. where the Bid is submitted after
the prescribed deadline, unless the Committee decides otherwise;
2. where collusion between the
bidder
and a Committee
member, an employee of the Government Entity, or another bidder is established;
3. where the Bid is unclear or where
there are uncertainties related to its content;
4. where the Bid provides for the bidder's right to accept or reject the
award decision;
5. where the Bid contains anything
that would
undermine the
interest of the Government Entity;
6. where the Bid fails to satisfy
the requirements of the public tender; or
7. where the Bid is in breach of this Law, the resolutions issued
in pursuance hereof, or the legislation in force in the Emirate.
a. Upon determining the winning
bidder, the Committee will submit its final recommendations to the Competent Authority for approval. The approval
of the Committee’s recommendations will be deemed as award of the public tender
to the winning bidder.
b. The winning bidder will be
notified in
writing by the
Concerned Unit by sending the Award Letter to the address provided by him.
c. Neither the Award Letter nor the
notification of the
winning
bidder of the award decision may grant the
winning bidder any
right as against
the Government Entity if it decides to renege on the award decision by issuing a relevant reasoned decision.
The Government Entity will have obligations towards the winning bidder only as
of the date of signing the Contract, or issuing the Purchase Order or
Commencement Order; and providing the Performance Bond by the winning bidder.
The
Committee must record all actions it
takes in paper or electronic minutes
containing its remarks, recommendations, and decisions. These minutes must
be signed by the chairman and members of the Committee and must be accompanied
by all public tender documents; other
documents related to Bids, awarding,
disqualification, and Contracts; and any other
relevant documents.
a. An interest-free Performance Bond
of ten percent (10%) of the Bid value in the form of a certified cheque, an
unconditional and irrevocable bank guarantee issued in favour of the Government
Entity by a bank operating in the UAE, or any other guarantee or percentage
prescribed by the DOF, will be collected from the winning bidder. The
Performance Bond must be valid for ninety (90) days after expiry of the term of
the Contract in case of supply and services Contracts, or until Final Receipt in case of works
Contracts, unless the Committee prescribes another validity period.
b. Notwithstanding the provisions of
paragraph (a) of this Article, the DOF may, in any cases it determines, authorise collecting, from the winning bidder, a guarantee other than those stipulated in paragraph
(a) of this Article or a guarantee of a lesser amount than that
stipulated therein.
c. Where the Contract value cannot
be precisely determined, the amount of
the Performance Bond will be a lump sum determined in accordance with the
relevant rules adopted by the DOF.
d. The amount of the Performance Bond
must be increased if the value of Purchases exceeds the value specified in the Contract. Where a
Supplier fails to increase the amount of the Performance Bond, the Government
Entity will be entitled to deduct the required increase amount from any amounts owed to the Supplier in connection with the same Contract
or from any other amounts owed by
the Government Entity to the Supplier.
e. In case of divisible Procurement
Contracts, the amount of the Performance Bond may be gradually reduced
according to the percentage of performance of the Contract. In this case, the Performance Bond must not be
less than ten percent (10%) of the value of the undelivered Purchases subject of the Contract.
f. A Director General may grant an
exemption from
the requirement to provide a Performance Bond in any of the following cases:
1. where the Supplier is a
Government Entity;
2. where the Contract performance
period does not exceed thirty (30) days from the date prescribed in the
Contract, Purchase Order, or Commencement Order, as the case may be, in which
case the validity of the Bid Bond must be extended for a period of not less
than thirty (30) days after the
date of Final Receipt of Purchases;
3. in case of Contracts for the
supply of materials or
provision of services, where the Supplier is a corporation or company licensed
to operate within a free zone or outside of the UAE, and this Supplier is unable to provide the Performance Bond while the Government Entity is in urgent need of these
materials or services; and
4. where the value of the Contract
does not exceed five hundred thousand dirhams (AED 500,000.00).
g. Where the Supplier is unable to provide the Performance Bond for reasons
acceptable to the Government Entity, and the Contract value exceeds five
hundred thousand dirhams (AED 500,000.00), up to five million dirhams (AED
5,000,000.00), ten percent (10%) of the payments owed to the Supplier will be
retained as security, instead of the Performance Bond, until the Final Receipt of Purchases.
Neither the Supplier’s creditors nor any other Person
may seek the attachment of a Bid
Bond or Performance Bond throughout its validity, or attachment of the Supplier’s dues stipulated in Article (67) of
this Law.
a.
Contracts will be drafted by Government Entities in the Arabic or English language; and must include all relevant contractual provisions, particularly the following:
1. the tender
reference number, the
Contract
date; and the names, representatives, and domiciles of choice of the contracting parties;
2. the subject of the Contract, with a brief description of the contracted Purchases;
3. the term and commencement date of the Contract, and the prescribed dates and places of delivery;
4. any variations to the Contract, including increasing or decreasing the quantities of Purchases or changing their
specifications or any other variations;
5. the penalties and fines to be imposed on the Supplier if he delays in performing, withdraws from, or ceases performing the Contract for any reason;
6. the Contract price, terms of payment, advance payments,
and all types of guarantees;
7. the bills of quantities,
prices,
and details of Purchases; and the drawings, plans, and
specifications of the project subject of the Contract;
8. intellectual property rights, and
confidentiality;
9. conditions and cases for subcontracting, and conditions for
assignment
of the Contract;
10. the provisions governing the revocation or termination of the Contract;
11. the provisions governing the settlement of disputes between the parties to the Contract;
12. general conditions; and
13. particular conditions, if any.
b.
The Contract will be signed by hand or electronically by the Competent Authority
and by the Supplier, after submission of
the Performance Bond by the Supplier where required.
a.
Where a winning bidder fails to sign the Contract within the time frame specified in the
Award Letter without a valid reason, the Bid Bond provided by the Supplier will
be confiscated without the need for a notice or court judgement. In this case, the Committee may, in addition to the confiscation of the Bid Bond and based on the
recommendations of the Concerned Unit, take one or more of the following measures against
the bidder:
1. cancel the public tender and reinitiate the tendering
process;
2. award the public tender to the
bidder who
submitted the next best-priced Bid as long as his Bid is still valid;
3. perform the Contract subject of the public tender at the expense of the winning
bidder, and hold him liable for all incurred expenses and price differences;
4. claim compensation from the
winning bidder who has failed to sign the Contract for the damage sustained by the Government Entity; and/or
5. strike off the winning bidder
from the Central Register of Suppliers or downgrade his classification in the
register.
b.
The expenses, price differences, and compensation
referred to in sub-paragraphs (a)(3) and (a)(4) of
this Article will be collected in accordance with the provisions of the
above-mentioned Law No. (1) of 2016 and the resolutions issued in pursuance
thereof.
a.
Limited tender is a Procurement Method in which Suppliers who
are pre-qualified by the Government Entity are invited to a tender, in
accordance with the rules, requirements, and conditions prescribed by the DOF, due to the fact that they have the competence and specialisation relevant to the subject of that tender.
b.
The procedures and rules applicable to public tenders
apply to limited tenders, except in respect of tender announcement.
Invitations will be sent to the Suppliers referred to
in Article (45) of this Law who are recorded in the Central Register of
Suppliers and the list mentioned in Articles (12) and (13) hereof. Pursuant to
a reasoned decision of the Concerned Unit, unregistered Suppliers may be
invited, provided that this is in the interest of the Government Entity, and
that these Suppliers are financially and technically
qualified. In all events, the number of invited Suppliers may not be less than
three (3).
a. Negotiation is a special method
for procuring the
Purchases needed by a
Government Entity, through which a Supplier is selected from among bidders based on his
competence
and
specialisation, and the price offered by him.
b. Negotiation will be adopted based on the conditions, rules, and procedures stipulated in this Law.
Negotiation will be adopted in the following cases:
1. where the specifications of the
requested Purchases are difficult to be precisely
determined, or where
their
determination requires technical expertise and specialisation;
2. where the requested Purchases are urgently needed so that they cannot be procured through public tender or limited tender;
3. where the value of the requested Purchases is not commensurate with the
cost of conducting a public tender or a limited tender;
4. where the Purchases have been previously solicited through a public tender or limited tender in which no Suppliers have participated or only unacceptable bids or a sole Bid has been received, while reinitiating the tender is not feasible due to the urgent need for the Purchases;
5. where a Contract awarded to a Supplier through public tender or limited tender is
revoked;
6. where the Supplier delays in
performing any of the terms of the Contract;
7. where the procurement of the requested Purchases requires conducting research and
experiments, or requires a
special method of performance which is inconsistent with public tendering or limited tendering;
8. where the subject of the Contract is the purchase of real
property, insurance, freight, or customs clearance; or
9. in any other cases determined by the DOF.
a. Negotiation will be adopted as a
Procurement Method pursuant to a resolution of the Competent Authority issued
upon the recommendation of the relevant
Committee.
b. The following procedures will be
followed in negotiations:
1. The Concerned Unit will invite
Suppliers to submit their Bids. The invitation will contain the description and
specifications of the requested Purchases and all conditions, time frames, dates, and places to
be stipulated in the Contract.
2. Bids will be submitted, along with all required documents, within the time frame specified in the invitation using the
paper and electronic forms and means adopted by the Government Entity.
3. The Committee will, on the date
scheduled for opening Bids, verify that Bids and bidders meet the prescribed
requirements; and disqualify all participants who fail to meet these requirements,
stating the reasons for disqualification.
4. The Committee will prepare a list
of the names of the bidders whose Bids are accepted and the total value of each Bid.
5. The Committee will prepare a report on the procedures it has followed, which includes the prices, names of the bidders participating in the negotiation, and the Committee’s
recommendations as to the winning bidder. The report will be referred to the Competent Authority for
approval of the outcome of negotiation.
6. The Committee may negotiate with
bidders to ensure that
the
Government Entity gets the best prices and conditions.
7. Negotiation will be conducted
with at least three (3) bidders.
Where the value of a Contract exceeds five hundred
thousand dirhams (AED 500,000.00), the general rules of public tender will
apply to the negotiation to the extent permitted by the terms and
nature of negotiation and the special circumstances warranting the adoption of
the negotiation. If the Contract value is less than five hundred thousand
dirhams (AED 500,000.00) and the Purchases are to be delivered within
fifteen (15) days, a written undertaking by the Supplier to perform the
Contract will be sufficient, in which case the Supplier will be exempt from
providing the Performance Bond.
a. Direct agreement is a method for procuring the Purchases needed
by a
Government Entity
where a Supplier
is contracted, in any of the cases stipulated in this Law, based on his competence, the nature of the requested Purchases, and the Supplier's
track record in performing
previous Contracts.
b. Direct agreement will be adopted in the cases and in accordance with methods stated in this Law.
Direct Agreement will be adopted as a Procurement
Method in the following cases:
1. where the Purchases are monopolised by one Supplier, and
it is not feasible to conduct a public tender, limited tender, or negotiation;
2. where the Purchases are urgently needed, in which
case direct agreement must be limited to the minimum quantities required for
work;
3. where the Purchases have fixed prices or tariffs;
4. where the Purchases are protected by intellectual
property rights;
5. where the Purchases are directly related to the security of the Government Entity, or are required to
achieve the higher public interest;
6. where Purchases are services that require high
and specialised qualifications and competencies; and
7. where the Purchases have been previously solicited through negotiation but only unacceptable Bids or a sole Bid has been received, and re-negotiation is not feasible due to the urgent need for these Purchases.
In a Direct Agreement, Suppliers will be selected through
one of the following methods:
1. Where the estimated value of Purchases is less than one hundred
thousand dirhams (AED 100,000.00), the Director General will give instructions to procure the Purchases directly from the Supplier. In
this case, the Procurement must be evidenced by the relevant invoice and
supporting documents.
2. Where the value of Purchases ranges between one hundred
thousand dirhams (AED 100,000.00) and five hundred thousand dirhams (AED
500,000.00), the Concerned Unit will solicit one or more Bids. In this case, the Procurement
decision must be approved by the Competent Authority, whereupon a Purchase
Order or Commencement Order will be issued, which will specify the required Purchases and their prices, the performance period, and any other terms.
3. Where the estimated value of Purchases exceeds five hundred thousand
dirhams (AED 500,000.00), the Committee will solicit one or more Bids from one or more Suppliers, in which
case the Procurement decision must be approved by the Competent Authority, and the Supplier will be required to submit the
Performance Bond prior to concluding of the Contract.
a.
Competitive
tender is a special Procurement Method adopted for the purpose of conducting
studies or developing technical designs or plans for a certain project or
specific purpose.
b.
Competitive
tender will be adopted in accordance with the rules and procedures stipulated
in this Law.
Competitive tenders will be conducted pursuant to the
following rules and procedures:
1. The Government Entity will
specify the detailed objectives, scope, and specifications of the project subject of the competitive
tender; and the
prizes, rewards, and remunerations to be awarded to winners. The Government
Entity will also
determine who will hold the ownership rights of the winning and
non-winning
reports, studies, designs, and drawings; and stipulate any other conditions as it deems
appropriate.
2. The Concerned Unit will announce the invitation to participate in the
competitive tender in the media, or extend direct invitations to Persons having relevant high
experience and qualifications to submit their Bids for the project subject of the competitive tender.
3. The Committee will examine and evaluate the submitted reports, studies, designs,
and drawings. For this purpose, the Committee may invite the participants in the competitive tender to discuss their submissions.
4. The Committee will record the procedures it has followed in a report which includes the submitted Bids; the opinions
and standards adopted by the Committee when comparing Bids; its recommendations on the
selection of the winning bidder, and the ranking of other Bids. The Committee
must submit the report containing the recommendations, along with the Bids, to the Competent Authority for
approval of the winning Bid.
5. The Committee may decide that no
participant is entitled to the prizes, rewards, or remunerations if it deems
that the submitted Bids are not up to the required technical standard.
A
Supplier must commence performing his obligation to provide the Purchases needed by the Government Entity as of the date specified in
the Contract, Purchase Order, or Commencement Order, as the case may be. Where no delivery date is specified, the delivery of Purchases must
commence on the day following the execution of the Contract or on the day following the notification of the Purchase Order or Commencement Order to the Supplier.
a. Under the same general
conditions, a
Government Entity may, by issuing a Variation Order to the Supplier, modify the quantities, types, or specifications of the Purchases stipulated in the Contract or
Purchase Order before or during its performance or within any extension period,
in any of the following two (2) cases:
1. where the Variation Order would result in reducing the value of the Contract by any percentage whatsoever; and
2. where the Variation Order would result in increasing the value of the Contract by up
to thirty percent (30%) of the total value stipulated in the Contract or Purchase Order.
b. Variations Orders must be
approved by the competent authorities mentioned in the table below according to
type of Purchases.
|
Type of Purchases |
Competent Authority to Approve
Variation Orders |
||
|
Director General |
The Director General of the DOF |
The SFC |
|
|
Materials |
Up to AED 10,000,000.00 |
More than AED 10,000,000.00 and up to AED
20,000,000.00 |
More than AED 20,000,000.00 |
|
Services |
Up to AED 10,000,000.00 |
More than AED 10,000,000.00 and up to AED 20,000,000.00 |
More than AED 20,000,000.00 |
|
Works |
Up to AED 25,000,000.00 |
More than AED 25,000,000.00 and up to AED
50,000,000.00 |
More than AED 50,000,000.00 |
c. The funds required to cover the
Variation Orders
which involve an
increase in the value of Contract must be available in the budget
of the Government Entity.
d. Variation to the quantities, types, or specifications of Purchases will be referred to the relevant
Committee to make the appropriate recommendation and submit it to the Competent Authority or its authorised
representative for approval. An addendum to the Contract or Purchase Order,
which provides for the approved variations, including variation of the amount of the Performance Bond, must be drafted and agreed upon by both parties.
a. A Supplier must perform the
Contract in accordance with the conditions and rules stipulated therein, and
must particularly comply with the deadline for performance of the Contract.
b. Where the Supplier delays in
performing the Contract, he will be subject to the penalties and fines
stipulated in the Contract and in this Law.
c. Where the delay by the Supplier is due to an emergency, force majeure, act of the
Government Entity, or any other reason beyond the control of the Supplier, the
Supplier may submit an application for exemption from penalties and fines along with a proof of occurrence of the emergency, force majeure, Government Entity's act, or other reason, within
thirty (30) days from the date of its
occurrence. The application will be referred to the relevant Committee for
consideration and verification. The Committee will make a recommendation on whether or not to grant the
exemption, which will be enforceable only upon approval of that recommendation by the Director General.
a. A Contract may contain provisions
requiring the Government Entity to make
advance payments to the Supplier
subject to the limits and conditions stipulated in this Law and in the
Contract. In any event, advance payments must be made against a bank guarantee provided by the Supplier in the same
amount and currency.
b. Where the public interest so requires, a Government Entity may, after the Purchase Order or
Commencement Order is issued and before the Contract is signed, make advance payments to the
Supplier once he submits the guarantee
referred to in paragraph (a) of this Article.
A Supplier may not assign the Contract to a third
party or perform it through a subcontractor without first obtaining the approval of the Director General granted based on the
recommendation of the relevant Committee. In any event, the original Supplier
will remain jointly liable with the assignee or subcontractors towards the
Government Entity for any breach of Contract.
a. A Director General may, upon the
recommendation of the relevant Committee, revoke a Contract without recourse to the courts in any of
the following cases:
1. where the Supplier commits an act
of deceit, fraud, or bribery in any manner whatsoever;
2. where the Supplier is unable to perform the
Contract due to becoming bankrupt or insolvent, or being liquidated;
3. where the Supplier dies, in
which case the Government Entity may revoke the Contract and return the Performance Bond to
the heirs of the Supplier. Alternatively, the Government Entity may maintain the Contract and authorise the
heirs or any of them, upon their request, to
continue performing the Contract in their personal capacity in accordance with
the provisions of the Contract, provided that the heirs are able to perform the Contract and that they
undertake to perform all
obligations arising therefrom, particularly providing the required guarantees;
4. where the Supplier is unable to perform the Contract; or
5. in any other case stipulated in the Contract.
b. Where the Contract is revoked in any of the cases stipulated in paragraph (a) of
this Article, the Performance Bond will be confiscated, the Contract will be
performed at the expense of the Supplier, compensation for damage will be claimed from the Supplier, and any other measures stipulated in the Contract may
be taken.
A Director General will, pursuant to a resolution he issues in this respect, form one or more
Committees to be in charge of receiving Purchases. The resolution must
determine the duties and terms of reference of the Committee, the rules for preparing inspection and receipt reports and other reports by the Committee, and any other relevant matters.
A Supplier will be responsible for maintaining order
and proper workflow at the work site; for meeting the requirements of
public and environmental safety therein; and for any damage to public or
private property or harm to Persons, whether caused by him or his workers or
as a result of performance of the Contract. The Supplier must comply with the
applicable laws in force in the Emirate in respect of workers and their rights,
safety, and protection from hazards.
a. A Supplier must ensure the validity and suitability of the adopted specifications, plans, designs, and
quantities; and communicate any relevant comments to the Government Entity or
the Consultant.
b. Once the Supplier signs the Contract,
he will be deemed to have agreed to the designs, plans, specifications, and
bills of quantities related to the works Contract; and have declared that they meet the safety standards prescribed for performing the works.
c. A Government Entity may correct
any mistake or error in any description, plan, or design related to the works Contract without
compensating the Supplier in relation to that correction, whether it takes place before or during the performance of the Contract. The correction must not result in variation of the specifications; increase in quantities or measurements; extension of the term of the Contract; or removal of completed structures. In the event of such a correction, the Variation Order provisions stipulated in Article (57) of this Law will apply.
In addition to the Supplier’s obligations stipulated
in the works Contract and in this Law, a Supplier must:
1. submit to the Government Entity
and the Consultant, within the time frame stipulated in the Contract, a
schedule of advance payments and a work schedule that includes all stages of
performance until completion; and obtain approval of these schedules from both the Government
Entity and Consultant;
2. not engage any subcontractors
without the approval of the Government Entity and the Consultant. These
approvals will not relieve the Supplier from the joint liability, with the
subcontractor, for the performance of his obligations under the Contract;
3. complete all the works stipulated in the Contract and its addenda,
including any Variation Orders, so that the Initial Receipt of these works takes place within the deadline stipulated in the Contract or any extension thereof; and
4. obtain all the approvals required
by the competent Government Entities.
Where a Supplier delays in commencing works; substantially delays in the performance
of the same; cease works for a period exceeding fifteen (15) consecutive
days; withdraws from performing works; or fails to comply with the terms of the
works Contract concluded with him, the Government Entity may, after serving a notice on the Supplier demanding his compliance within the prescribed
deadline and his failure
to do so, take one or more of the following measures against the Supplier:
1. revoke the Contract, confiscate the Performance Bond, and
perform the works by itself or by engaging a third party, in which case the
defaulting Supplier will not have the right to claim any savings realised as a result of that performance;
2. claim compensation from the
defaulting Supplier for any damage or loss it has sustained and any costs or the
price differences it has
incurred;
3. retain any supplies or
equipment belonging to the defaulting Supplier and existing at the work site, and use the same to complete the
works and ensure
the enforcement of its
rights, without holding
any liability
for any damage these supplies or
equipment may sustain;
4. charge the defaulting Supplier
ten percent (10%) of the value of uncompleted works as administrative fees;
and/or
5. appoint another Supplier to
perform or complete the Contract, and charge the defaulting Supplier any cost differences resulting from appointing the new
Supplier.
A Supplier’s dues under a works Contract will be paid
as follows:
1. on-account payments of ninety percent (90%) of the
value of completed works, and eighty-five percent (85%) of the value of the
materials supplied to the work site, according to the statements of completed works or supplied materials that have been financially and technically audited and approved by the Consultant and the
Government Entity; and
2. a final payment based on the
final statement of completed works provided by the Supplier, the payment
certificate approved by the Consultant, the Initial Receipt of works, and the
approval of the Government Entity. Disbursement of the final payment will be
subject to the following:
a. deduction of on-account payments previously disbursed in respect of the works or materials; and
b. retention of five percent (5%) of
the Contract value as guarantee until the Final Receipt of the project. The
retained amount may be released to the Supplier against a bank guarantee for the same amount.
a. A Supplier must properly complete the works stipulated in
the works Contract within the deadline stipulated in the Contract or any extension thereof. Where the
Supplier fails to meet this deadline, the delay penalty prescribed in the Contract will be imposed on the
Supplier for each day of delay. However, the total amount of the delay penalty may not exceed ten percent (10%) of the Contract value.
The delay penalty will start to accrue
as from the date of failure to meet the deadline
without the need for any
notice or judicial proceedings against the defaulting Supplier, and without the need to prove the damage. The delay penalty will apply without prejudice to the Government Entity’s right to hold the Supplier liable for the fees paid to the Consultant in return for
supervision of the project during the delay period.
b. The provisions of Article (66) of
this Law may apply where the Supplier’s delay in performing the works
stipulated in the Contract compromises the interests of the Government Entity.
c. Pursuant to a resolution of the
Director General, the Supplier may be exempted from the delay penalty in accordance with the provisions and procedures
stipulated in Article (58) of this Law.
a. Upon completion of the works
stipulated in the Contract, the Supplier must notify the Government Entity and
the Consultant of the completion of the same by way of a dated notice; and must request the Government Entity to receive the works.
b. Initial Receipt of completed
works will take place, in the presence of the Consultant, by a Committee formed
by the Director General for this purpose. This Committee must verify that the
Supplier has completed the works as stipulated in the Contract and any addenda
thereto. Alternatively, the Committee may receive the works and make reservations regarding certain
deficiencies, in which case it will prepare a list of these deficiencies and prescribe the deadline for their remedy. In case of failure by
the Supplier to remedy the
deficiencies by this deadline, the provisions of Article (68) of this Law may apply. The relevant report will be submitted to the Director General to take the necessary action.
After
completion of works, the Supplier must clear the site of all
temporary structures, equipment, and other items; and must level any uneven
ground at the site. Where the Suppler fails to do so, the Government Entity may
perform these works at the expense of the Supplier and deduct
the relevant costs from the dues owed to the Supplier.
Unless the Contract provides for a longer period, a
Supplier will remain liable, for a period of one (1) year from the date of
Initial Receipt, for guaranteeing and maintaining the works subject of the
Contract; and must remedy any defect or flaw that
may occur during this period. The Supplier will also remain
liable for a period of ten (10) years, from the date of Final Receipt, for any
substantial defects that may be found in the works subject of the Contract. This does not relieve the Consultant from his liability for these defects.
Unless the Contract provides for a longer period, the
Final Receipt will take place upon the lapse of the period stipulated in the
Contract; or lapse of the period following the receipt of the Bid Bond, as
prescribed in Article (71) of this Law, for the Supplier's liability to guarantee and maintain the works subject of the Contract. Upon
verifying that the Supplier has met all his obligations, the works, plans, and
all related documents will be received by a receiving Committee in the presence
of the Consultant, if any. A Final Receipt certificate will be issued by the Director General based on the recommendations of the receiving
Committee and the Consultant, whereupon the Supplier’s dues will be paid and
the guarantees retained by the Government Entity will be released to the
Supplier.
The provisions of this Law, including those relating
to works Contracts, will apply to turnkey projects. When receiving a turnkey project, the fittings and furnishings of the
project will be identified and recorded in special lists in order to be entered into the Assets register of the Government
Entity.
Article
(74)
No works Contracts may be concluded on lump sum basis
except in cases where it is impossible to accurately determine the quantities and prices of works. However, a Government Entity must
determine the prices of some of the essential items in these Contracts to use them as reference in case of any addition
or cancellation of works through Variation Orders
or due to any other reason.
a. The materials supplied to a Government Entity
will be received after being inspected by the receiving Committee in accordance with the provisions
of this Law.
b. Depending on the nature of the requested materials, a Government Entity
may inspect and examine these
materials at their place of manufacture before they
are shipped to it, provided that this is stipulated
in the Contract.
c. Materials which do not require thorough technical inspection, due to their nature, may be finally received by the
organisational unit in charge of warehouses pursuant to a receiving report.
a. If a Supplier delays in
supplying, or fails to supply, all or part of the requested materials beyond the deadlines stipulated in the
Contract; or if the supplied materials are rejected by the receiving
Committee, the Director General may, pursuant to a resolution he issues in this
respect, extend the deadline for an additional period of up to thirty (30) days, without charging any delay penalty, if this extension is in the interest of the
Government Entity.
b. Where a Supplier fails to supply the materials beyond the prescribed deadlines or beyond any extension granted to him in accordance
with the provisions of paragraph (a) of this Article, the Supplier will be
charged a delay penalty of five hundredths of one percent (0.05%) of the value
of the delayed materials per each day of
delay or part thereof. The total amount of a delay penalty may not exceed twenty percent (20%) of
the value of the delayed materials where the delay in supply does not preclude the use of all requested materials. Where the delay in supply
precludes the use of all materials, the delay penalty will be charged based on the total value of the materials.
c.
Where the Supplier continues to delay in supplying the materials until the delay
penalty reaches the maximum limit referred to in paragraph (b) of this Article,
the Government Entity may, without the need for a notice or court judgement, take either of
the following two (2) measures against the Supplier:
1.
purchase the
materials at the expense of the Supplier and hold the Supplier liable for the
difference in prices, in
addition to ten percent (10%) of the value of purchased materials as
administrative fees; or
2.
revoke the Contract, confiscate the Performance Bond,
and claim compensation
for damage from
the Supplier.
Supplied materials will be received in two (2) stages
as follows:
1. Initial Receipt
In
this stage, the following will be observed:
a. Materials will be initially
received at the time and place specified in the Contract. An Initial Receipt
document will be issued and signed by the organisational unit in charge of warehouses if the materials are received at a warehouse; or by the
officer in charge of the work site if the materials are received at the site.
b. The officer in charge of the work
site, and the organisational unit in
charge of warehouses, must verify that the supplied
materials conform to the specifications stipulated in the Contract; and to the quantity, weight, or volume specifications set forth in the Supplier’s invoice, shipping documents, or delivery notice. They must record any observations
related to the condition of packages or boxes, and must clearly state in the
Initial Receipt document that the supplied materials are subject to inspection
and testing. They also must designate an
appropriate place to
store each type
of the materials supplied by a specific Supplier separately until they are inspected and finally accepted. The invoice as well as a copy of the Initial Receipt
document will be sent to the organisational unit in charge of financial affairs within the Government Entity.
2. Final Receipt
In
this stage, the following will be observed:
a. An inspection and receipt
Committee will be formed pursuant to a resolution of the Director General. If warranted by the nature of supplied
materials, the entity requesting the materials will be represented in this
Committee.
b. The inspection and receipt
Committee will convene a meeting no later than seven (7) days after the date on
which it is notified of the Initial Receipt by the organisational unit in charge of warehouses. The Supplier must be notified of
the date of this meeting to
attend in person or send a
representative to attend the inspection and Final Receipt.
c. Supplied materials will be
inspected, tested, and received in accordance with the conditions and
specifications stipulated in the Contract and its addenda; and will be compared to the sealed and approved
samples, catalogues, and drawings. Where necessary, the inspection and receipt
Committee may seek assistance of any specialised technical entity to verify the
conformity of supplied materials to the relevant technical specifications.
d. Materials imported from outside
of the UAE will be inspected within the period specified in the relevant
insurance contract in presence of the representative of the insurance company, and will be
checked against the invoice issued by the Supplier and the shipping documents.
Seals, shipping marks, boxes, and box contents will be examined to verify that
they are in good
condition; and
any damage, shortage, excess, or non-conformity with the specifications will be recorded with a view to establishing the liability of the insurance company or Supplier in
accordance with the terms of the Contract.
e. Rejected materials will be set
aside, and
appropriate actions will be taken to return them to the Supplier.
f. An inspection and receipt report will be prepared, which will include all actions
taken, inspection and examination outcomes, and reasons for acceptance or
rejection of all or part of the materials. This report will be signed by all members of the Committee and
submitted to the competent organisational unit within the Government Entity,
the Concerned Unit, and the organisational unit in charge of financial affairs.
g. Where any materials imported from outside of the UAE arrive
before the relevant invoice is received, and the inspection and receipt
Committee deems, based
on valid
reasons, that these materials must be received, the receiving procedures stipulated in this Law will be followed
based on the documents related to these
materials, which will be required from the Supplier. Where discrepancy is found
between the supplied materials and the documents based on which they are to be received, the receipt may be postponed until the relevant invoice
arrives.
Alternatively, the
materials may be received subject to
taking the necessary actions to preserve the rights of the Government Entity.
h. The Final Receipt document of the
supplied materials will be issued by the inspection and receipt Committee based
on the inspection and receipt report. Supplied materials will be entered into
the Government Entity’s warehouse
records or Assets register, as the case may be.
The inspection and receipt report prepared by the
inspection and receipt Committee, or by the
organisational unit in charge of
warehouses, will be referred to the
Committee supervising the Procurement of the materials to render the appropriate decision in any of the following cases:
1. where a dispute arises between
the Supplier and the inspection and receipt Committee;
2. where a disagreement arises among the members of the inspection and
receipt Committee;
3. where the inspection and receipt
Committee agrees to the supply of alternative materials that meet all or most
of the specifications stipulated in the Contract. In this case, if the alternative materials meet work requirements, the Procurement Committee may,
at its sole discretion, decide to accept these materials based on the original prices stipulated in
the Contract or lower prices; and
4. in any other receipt-related case which the inspection and receipt Committee, or the Director General, deems necessary to be referred to the Procurement Committee.
Where materials are rejected, the following will
apply:
1. The organisational unit in charge
of warehouses, or the officer in charge of the
work site, will keep the rejected materials separately
until the
appropriate actions are taken to return them to the
Supplier.
2. The Concerned Unit will notify
the Supplier of the rejected materials and the reasons for rejection within
five (5) days, and will request the Supplier to retrieve the materials and supply replacement materials within
the period it specifies.
3. If the Supplier fails or refuses
to receive the rejected materials within the period specified by the Concerned Unit in accordance with
paragraph (2) of this Article, the Supplier will be charged a storage penalty
of one percent (1%) of the value of rejected materials per week. However, the total amount of the storage penalty may not exceed
five percent (5%) of the value of the rejected materials. The Supplier will also be
charged the relevant delay
penalty. If the Supplier persists in failing or refusing to receive the rejected materials for more than thirty (30) days, the Government Entity
will have the right to sell these
materials by way of public auction if they can be sold; deduct all expenses and penalties owed to it; and return the balance to the
Supplier.
Alternatively, if these materials cannot be sold, the Government Entity will
have the right to
destroy
them, at the
Supplier’s expense, in accordance with the legislation in force.
4. Where the Supplier requests
technical re-inspection or re-testing of the rejected materials, he will bear the resulting expenses unless the
outcome of the
re-inspection
or re-testing is in his favour, in
which case the Government Entity will bear all expenses, provided that it approves in advance
the entity conducting the re-inspection
or re-testing.
Section Fourteen
Services Contracts
Article (80)
a. The procedures and rules
stipulated in this Law and the general and particular conditions prescribed by the DOF and the
Government Entity will apply to the execution, performance, and receipt of the services Contracts
concluded by a Government Entity with a Supplier.
b. The Government Entity will prescribe the terms of each type of
services Contracts
in line with the
rules and procedures related to works Contracts and supply Contracts and to the extent that these rules and procedures are relevant to
services Contracts.
To
secure the Purchases needed by a Government Entity, Procurement from non-UAE national individuals, and
from companies and corporations operating in the free zones of the Emirate and
other emirates of the UAE or operating outside of the UAE, will
be conducted through any of the Procurement Methods stipulated in this Law. In this case,
the price of Purchases will be paid only after providing all necessary guarantees related to the receipt and inspection of these Purchases and verification
of their conformity to the prescribed specifications.
External Procurement will be adopted pursuant to a resolution issued by the
Competent Authority upon a recommendation of the Concerned Unit made based
on a technical study stating the reasons for resorting to external Procurement.
External Procurement
will be adopted in any of the following cases:
1. where the requested Purchases cannot be supplied by a UAE national or
are not available in the local market;
2. where there is a significant
difference in the prices of Purchases
between the local market and external
markets; and/or
3. where there is a significant
difference in quality between local Purchases and external Purchases.
Contracts under which the Disposal of Assets is undertaken, or the Assets
are utilised, to generate revenue for Government Entities include:
1. sale Contracts;
2. lease Contracts; and
3. any other Contracts that generate
revenue for a Government Entity through the utilisation of its Assets.
Disposal
of Assets will be subject to the approval of the Director General, and will be
conducted though any of the following methods:
1. auction;
2. negotiation; or
3. direct agreement.
a. A Government Entity wishing to
dispose of its Assets by sale will notify other Government Entities of its intent and attach a list of these Assets stating
their type, quantity,
number, and any other necessary details. The Government Entity will request these
entities to
confirm their wish to acquire the Assets, within the time limit it prescribes, in case they need the same.
b. Where no Government Entity is
interested in the Assets intended for disposal, the Government Entity holding these Assets will take the necessary action to
dispose of them in accordance with the
provisions of this law.
c. Where dealing in the Assets to be disposed of requires a special licence from a Government Entity, these Assets may only be disposed of to an entity holding
that license or to an entity that undertakes to export the Assets to outside of the UAE once the sale and delivery of the same are completed.
Auction is the primary method of Disposal of Assets. An auction will be initiated through public
announcement
within or outside of the UAE. Auctions
will be conducted
and awarded in
accordance with the provisions of this Law.
a. A Director General will have the
exclusive power to approve holding auctions,
determine their outcomes, and sign the
Contracts
made based on them.
Auctions
are divided into two (2) types:
1. Sealed-bid Auctions
In
this type of auctions, Bids are submitted in sealed envelopes to the Government
Entity in the manner prescribed by it.
2. Public Auction
In
this type of auctions, bidding is conducted in public, by attending in person
or through the Electronic System.
In Disposal of Assets by auction, the following rules and procedures will apply:
1. In coordination with the competent organisational units
within the Government Entity, the Concerned Unit will:
a. estimate the value of Assets to
be disposed of, taking into account the
purchasing costs, estimated useful life, technical condition, usability, and
market prices of the Assets;
b. determine the security deposits
to be provided by bidders; and
c. determine the type of auction to
be adopted, be it sealed-bid auction or public auction.
2. Upon approval by the Director
General of the estimated value of the Assets to be disposed of, and the security
deposits and type of auction to be adopted, the auction will be announced. The
announcement must include:
a. a description of the Assets to be
disposed of, including the type, quantity, place, possibility of inspection, and any other relevant
information;
b. the type of auction, be it sealed-bid auction or public
auction; and the date and place of submitting and opening Bids or
conducting the public auction;
c. the security deposits required
from participants in the auction;
d. the deadline for submitting Bids; and
e. any other information the
Government Entity deems necessary to be included in the announcement.
3. In case of a sealed-bid auction,
the auction Committee will, at the place designated and on the date scheduled for the auction, open the Bids and choose the highest Bid using the method adopted for
the same. In
case of a public auction, the auction Committee will set the opening price,
which may not be less than fifty percent (50%) of the estimated value of the auctioned Assets.
4. The auction will be awarded to the highest bidder.
5. The auction may be cancelled if
the amount of the highest Bid is less than fifty
percent (50%) of the estimated value of the auctioned Assets.
6. The auction Committee will
prepare a report on the procedures it has followed, which includes the outcome of the auction, the last Bid received,
and the decision of the auction Committee to award or cancel the auction. This
report will be submitted to the Director General for approval.
7. Received security deposits will be
refunded to all unsuccessful bidders participating in the auction.
The winning bidder will be required to top up the
security deposit amount paid by him to the percentage of the value of the
Bid determined by the Government Entity as a Performance
Bond. This Performance Bond will be in the
form of a letter of guarantee or certified cheque issued by a bank operating in
the UAE, and will be valid throughout the period agreed upon for payment of the full price
of the Assets disposed of.
The Director General will determine the cases and
categories that may be exempted from providing the Bid
Bond and Performance
Bond in the Disposal
of Assets process.
The Government Entity will conclude a Contract with
the winning bidder, which stipulates the price of Assets and the essential conditions and obligations arising from awarding the auction,
including the dates of receipt of the Assets. The Contract will be executed
by the Director General.
A Contract for the Disposal of Assets will be
performed as follows:
1. The Assets subject of the Contract will be delivered to the contracting party upon full payment of the price. The contracting
party must receive the Assets within the period
specified in the Contract, failing which he will be charged storage,
safekeeping, and administrative fees at the rate of one percent (1%) per day up
to ten percent (10%) of the value of Assets. These fees will be paid before the
date of receipt of the Assets.
2. Where the contracting party fails
to perform the Contract concluded with him within the period specified therein,
the Contract will be revoked; the Performance
Bond provided by
him will be confiscated; the
Disposal of Assets process will
be reinitiated in accordance with the
provisions of this Law or a
negotiation
will be initiated, as
the case may be; and the penalty stipulated in
the Contract
will be imposed.
Notwithstanding the provisions of Article (87) of this
Law, negotiation may be adopted as a Method of Disposal of Assets in any of the
following cases:
1. in case of urgency of the need for the Disposal of Assets;
2. where the costs of conducting an
auction are not commensurate with the value of the Assets to be disposed of;
3. where an auction for the Disposal of Assets fails;
4. where a concluded Contract for the Disposal of Assets is revoked; or
5. where the Assets cannot be disposed of through auction.
Notwithstanding
the provisions of Articles (87) and (95) of this Law, direct agreement may be
adopted as a Method of Disposal of Assets in any of the following cases:
1. where the Assets are to be
disposed of to a Government Entity;
2. where the Disposal of Assets through auction or negotiation fails;
3. where the Assets are to be disposed of to one entity only;
4. where the estimated value of the
Assets to be disposed of does not exceed five hundred thousand dirhams (AED
500,000.00); or
5. where the Assets are to be
disposed of through leasing, regardless of the rent.
Disposal
of Assets will be conducted, through direct agreement or negotiation, as
the case may be, by a Committee formed by the Director General for this
purpose.
The Disposal of Assets through negotiation or direct agreement
will be authorised; the outcomes of negotiation or direct agreement will be approved; and the relevant Contracts will be signed, by the Director General.
In the Disposal
of Assets through negotiation or direct
agreement, the following rules and
procedures will apply:
1. The Concerned Unit will estimate
the value of the
Assets to be
disposed of through negotiation or direct agreement based on their cost prices,
market prices, period of use, price of similar items,
and any other factors that may affect price increases or decreases.
2. Submitted Bids will be referred
to the negotiation and direct agreement Committee for consideration and selection of the highest Bid
in light of the estimated value of the Assets to be disposed of. The Committee will prepare a
report which includes the procedures it has followed, the details of the Bids received, and the decision
rendered by the Committee; and
will submit this report to the Director General for approval and signing of the
Contract with the person
to whom the Assets are disposed of.
a. A Government Entity may, pursuant
to a resolution of the Director General, donate surplus movable Assets to any of the following entities:
1. charitable associations licensed
to operate in the UAE;
2. humanitarian organisations
recognised in the UAE;
3. educational and research
institutions licensed to operate in the UAE; and
4. any other entity determined by
the Director General of the DOF.
b. Donations will be made to the
entities referred to in paragraph (a) of this Article in accordance with the
rules and procedures prescribed by the relevant resolution of the Director General of the DOF.
A Government Entity must maintain a register, in which
the details of all Disposal of Assets transactions, including the names of the entities
to which the Assets are disposed of, will be recorded.
A
Government Entity must prepare a detailed account of the specifications of the
Assets to be disposed of, in a manner that allows bidders to submit their Bids.
a. A Disposal of Assets process will be valid be subject to the following conditions:
1. The requirements for
participating in the
Disposal of
Assets process must be determined.
2. The Government Entity must not be held liable for any loss or damage incurred by
the participants in the Disposal of Assets process if the Government Entity modifies or suspends any part of the process.
3. Bids made by participants must remain binding throughout the period of Bid submission.
4. Bids must be submitted before the
expiry of the prescribed deadline. Bids submitted after the deadline may be accepted only with the approval of the competent Committee pursuant
a reasoned decision issued by it in this respect.
5. The Government Entity employees
and the bidders must not disclose any information or Data to
third parties, where this confidentiality is
required due to the
nature of the Assets to be disposed of or the adopted Method of Disposal, or
where the disclosure would preclude the Disposal of Assets or compromise the interests of the Government
Entity.
6. Where the Assets are disposed of by other than sale or donation,
the Government
Entity will retain the ownership rights to the Assets.
7. Nothing in the documents expressing the Government
Entity's intent to dispose of the Assets, or in the relevant award decision, may be construed as creating liability on the part of the Government Entity towards
participants in the
Disposal of
Assets
process. The
Government Entity will be liable towards any participants only upon
signing Contracts
with them.
b. A participant in the Disposal of Assets process must provide a Bid Bond in the form of a certified
cheque or an unconditional and irrevocable letter of bank guarantee issued by a bank operating in the UAE, in the amount or percentage
prescribed by the Government Entity.
c. Without the need for a notice or
court judgement, the Bid Bond will be
confiscated if the participant in the Disposal of Assets process withdraws his Bid before the expiry of its validity,
or before concluding the Contract with him, without a reason acceptable to the
Government Entity.
d. A bidder will be held liable for
any loss or damage that the Government Entity incurs on account of his withdrawal from the Disposal of Assets process before awarding the Contract or on account of his refusal to sign the Contract, without a reason
acceptable to the Government Entity.
a. A Government Entity may collect fees for the bid documents or for participation in online auctions, as prescribed by the competent Committee.
b. Where a Disposal of Assets process is cancelled, the fees for bid documents paid by all participants will be refunded
to them.
c. The fees for bid documents will not be refunded after commencement of
the procedures for Disposal of Assets where the submitted Bids fail to meet the
prescribed specifications or conditions. Moreover, these fees will not be refunded where the bidder withdraws
his Bid,
whether before or
after commencement of the procedures for Disposal of Assets.
a. The highest Bid will be deemed
the winning Bid, provided that it exceeds the
minimum price prescribed by the Government Entity. In
selecting the winning Bid, the competent Committee must take into account the following:
1. the value of the highest Bid;
2. any reservations or variations
made by the winning bidder; and
3. any issues regarding the winning bidder’s solvency, reputation, or integrity.
b. Where the competent Committee
rejects the highest Bid, it must state the reasons for rejection in writing.
c. The Director General will render the award decision and execute the
Contract with the winning bidder based on the recommendation of the competent
Committee.
a. Where the Competent Committee
receives a sole Bid in respect of
the Disposal of Assets process, it
may recommend to the Director General accepting this sole Bid if it deems that the Bid exceeds the
minimum fair
price or
that it is suitable
in view of the
evaluation outcomes.
b. If the sole Bid is lower than the
minimum price or is not suitable in view of the evaluation outcomes, the Disposal of Assets process will be reinitiated.
c. In any event, a Government Entity
will not be obliged to accept a sole Bid submitted to it. The Director General
may decide to accept the sole Bid,
or to reinitiate or cancel the Disposal of Assets process.
A
Government Entity will refund to the contracting party all security, guarantee,
and other amounts retained by it, within thirty (30) days from
the date of the proper performance of the Contract and fulfilment of all obligations of the contracting party stipulated therein.
A Government Entity must construct or
take lease of the warehouses required for storing its Assets, and
provide these warehouses with the required equipment, devices, systems, human
resources, procedures, and working manuals, as appropriate in view of the type, nature, and size of the Assets.
The organisational unit in charge of warehouses within
each Government Entity will manage the Assets of the Government Entity in
accordance with the provisions of this Law and the Inventory Management system
adopted by the DOF; and will be
responsible for providing other
organisational units with the Assets needed for the performance of their
duties and achievement of the objectives of the Government Entity. For this
purpose, it will:
1. maintain the optimum level of stored Assets as required to minimise storage costs, and reduce the
capital invested in these Assets;
2. categorise, and assign codes to, stored Assets; store each type of Assets at its designated place; and
maintain the Assets in a manner that ensures their safety and proper use;
3. inspect used Assets before
storing them in warehouses,
with a view to
ensuring the integrity of stored Assets in terms of quantity, quality, and fitness for use;
4. insure the Assets; and conduct periodic maintenance,
estimate the
useful life,
and ensure the
serviceability
of the same;
5. supply the competent
organisational units within the Government Entity with the stored Assets, upon their
request, in accordance with the rules and procedures adopted in this respect;
6. record the Assets entering or leaving the warehouses; and regularly determine the stock level and financial value of these Assets, in coordination with the competent organisational unit
within the Government Entity and in accordance with the accounting standards adopted
in this respect;
7. use the Electronic System to record the Assets received
in or discharged from the warehouses, and to determine the stock levels of the Assets;
8. conduct Inventory Planning by developing stock supply programmes and determining the annual stock requirements;
9. implement the applicable warehouse security and safety regulations
and procedures;
10. submit periodic reports on stored Assets, the condition of warehouses, and surplus Assets; and propose the appropriate approach to handle the same, in coordination with
the competent organisational units within the Government Entity;
11. track the Assets delivered to the
competent organisational units, and to the employees, of the Government Entity;
and
12. perform any other duties
stipulated in this Law and the resolutions issued in pursuance hereof; or assigned to it by the Director General.
a. A Committee named the “Stock Count and Valuation Committee” will be
formed within each Government Entity pursuant to a resolution of the Director
General. The Committee will be comprised of a chairman, a vice chairman, and a
number of members;
but may not include any employees of the organisational unit in charge of
warehouses.
b. The resolution forming the Stock Count and Valuation Committee will determine its terms of
reference; and the procedures for convening its meetings, passing its
resolutions, and making its recommendations.
c. The Stock Count and Valuation Committee will have the following functions:
1. to verify the authenticity of the warehouse records;
2. to compare the actual stock levels of the items stored in the warehouse against those entered in the
records;
3. to inspect the stored items and determine their condition;
4. to estimate the value of the stored items in coordination with the
competent organisational units within the Government Entity and in
accordance with the accounting standards adopted in this respect;
5. to make recommendations as to the disposal of stored items by way of sale, destruction, recycling, or donation;
6. to prepare reports on the
outcomes of stock
count and
evaluation processes; and
7. to perform any other duties
assigned to it by the Director General.
a. The organisational unit in charge
of warehouses will be responsible for managing and receiving the Assets to be stored, pursuant to the relevant receiving report prepared by the inspection and receipt
Committee, and in accordance with the provisions of this Law.
b. Where any damage or discrepancy
is discovered in the course of inspection and receipt, the inspection and
receipt Committee or the organisational unit in charge of warehouses, as the
case may be, will provide the Procurement Concerned Unit with the receipt and
inspection report, stating the damage and discrepancies. The Concerned Unit
must take the necessary action to claim compensation for such damage or
discrepancy from the Supplier, subject to the provisions of the Contract concluded
with him and the provisions of this Law.
The organisational unit in charge of warehouses will discharge
Assets from the warehouses in accordance with the procedures adopted in
this respect.
a. The organisational unit in charge
of warehouses must record the discharge of Assets accurately and must print bar codes for stored items through the warehouse management Electronic System adopted by the DOF, in a manner that ensures effective tracking of these items.
b. The warehouse management Electronic System must include the essential information of the stored Assets, in particular:
1. codes of the stored Assets;
2. dates of entry or storage;
3. units of measurement;
4. quantities in stock;
5. expiry dates of the stored
Assets, where applicable;
6. actual prices of the stored Assets;
7. description of the stored Assets;
8.
the organisational unit to which the stored Assets belong, unless these
Assets are shared by multiple units; and
9.
the reorder point.
c. Discrepancies between the
inventory records in
the warehouse
management Electronic
System and the
existing stored Assets must be resolved pursuant to the rules and
principles adopted by the DOF in this respect.
a. Stockbuilding must
be based on the volume of demand for stored Assets.
b. The organisational unit in charge
of warehouses will, in coordination with the competent organisational units within the Government Entity, determine the minimum stock
level, the
maximum
stock level, and the optimal reorder point of each type of stored Assets. These levels will be recorded in the warehouse management Electronic System, taking into account:
1. possibility of storage and perishability of the Assets;
2. availability of the Assets in the
market;
3. tendency of the specifications of
the Assets to change;
4. price fluctuations;
5. turnover of the Assets;
6. importance of the Assets to the
business of the Government Entity; and
7. strategic importance of the Assets.
c. In determining the reorder point,
the following must be observed:
1. the minimum stock level and the operating needs as from the date of preparing the Purchase Request to the date
on which the Assets are delivered and
stored in the warehouse;
2. availability of Assets in the
market;
3. stock level of Assets;
4. actual need for the items;
5. surplus Assets;
6. Assets that require maintenance;
7. perishable Assets;
8. expiry dates of Assets, where
applicable;
9. technical and technological
depreciation of Assets;
10. seasonality of Assets; and
11. variability of prices throughout
the year.
a. If received Assets are found unfit for use, or complaints are filed by the competent organisational units within the Government entity in respect of these Assets, they will be returned to the relevant
Supplier in
accordance with the procedures and rules adopted in this respect. The Supplier
will be responsible for retrieving
the Assets, and compensating the Government Entity for the same, within the time limit stipulated in the Contract, or within one
(1) month from the date of delivery of these Assets to the Government Entity where no such time limit is
stipulated in the Contract. The rejected Assets must be returned by the Government Entity in the same condition in which
they have been received.
b. Where the Supplier fails to retrieve the rejected Assets referred to
in paragraph (a) of this Article, the penalties and measures stipulated in
sub-paragraph (3) of Article (79) of this Law will be imposed on him.
a. Where, in the course of
performance of a Contract, inevitable or unforeseeable emergencies occur, which render the performance of the Contract
onerous for the contracting party
and expose him to severe loss due to circumstances beyond his control, the
contracting party must continue performing
the Contract. In
this case, the
contracted party will have the right to claim fair compensation by submitting a request to the competent Committee. The
Committee will consider the request and
submit its relevant recommendations to the Director General to take the actions he deems appropriate in respect of that request. In this regard, coordination with the DOF must be pursued in order to secure the funds
required for compensation.
b. Where, in the course of
performance of a Contract, a force
majeure event or inevitable, unforeseeable, and general exceptional
circumstances occur, which render the performance of the Contract impossible, the Contract
will be deemed revoked, provided that the competent Committee verifies the occurrence of such force majeure.
a. In implementing the provisions of
this Law, all Data, documents, records, Contracts, minutes, notices,
correspondence, and other instruments must
be prepared and documented electronically.
b. All Electronic Data, documents,
records, Contracts, minutes, notices, correspondence, signatures, and other instruments processed by the Electronic
System will have the same evidential value as official written documents.
a. Any affected party may, without
prejudice to his right to recourse to courts, submit to the Director General a
written grievance against any procedure, decision, or measure taken against him
under this Law and the resolutions issued in pursuance hereof, within thirty
(30) days from the date of being notified of the contested procedure, decision,
or measure.
b. The grievance will be determined
by a Committee formed pursuant to a resolution issued by the Director General
in this respect. This resolution will determine the chairman of the Committee,
its members, its terms of reference, and the procedures for convening its meetings and passing
its resolutions and recommendations. The Committee may not include among its
members any Person who has participated in taking the contested procedure,
decision, or measure.
c. The Committee must determine the
grievance within thirty (30) days from the date of being referred to it, and its decision in respect of
the grievance will be final.
d. In addressing the grievances submitted under the provisions of this Law, transparency must be observed, and any
favouritism or bias against any party must be avoided.
A Government Entity will not be held liable
towards any party contracting
with it, or towards third parties, for
any damage sustained by them as a result of performing the
Contract, unless the Government Entity has contributed to this damage. The
contracting party will be fully liable towards the Government Entity
for such damage, and for compensation for the same. The contracting party must remedy the damage at his own expense, failing which, the
Government Entity may remedy the same and claim from the contracting party
all the relevant costs incurred, in addition to twenty percent
(20%) of these costs as administrative fees.
a. A Contract must specify the
governing law and the methods for
amicable settlement of any disputes that may arise between the parties.
b. Where no amicable settlement is
reached in disputes arising between the parties to the Contract, the courts of the Emirate, including the
Dubai International Financial Centre Courts, will have jurisdiction to hear all
the disputes arising from performance
of the Contract. The
jurisdiction of
these courts will be determined in accordance with the legislation in force in
the Emirate.
c. The parties to Contract may agree to resort
to arbitration, in which case no provisions in the Contract may stipulate that arbitration be
conducted outside of the Emirate, or that any dispute regarding the arbitration
or any of its rules or procedures be subject to any legislation or rules other
than those in force in the Emirate. Where the public interest so requires, any provision that contradicts the provisions of this paragraph will be deemed voidable and non-binding.
d. No provisions in the Contract may stipulate
compliance with all or any of the terms of contracts of the International Federation of Consulting Engineers (FIDIC),
whether by way of
reference to
these terms or by
attaching them to the Contract.
e. Notwithstanding the provisions of
paragraphs (b), (c), and (d) of this Article, a Government Entity may, where the public interest so
requires and under exceptional circumstances, be exempted, subject to the prior approval of the Ruler or his authorised
representative, from compliance with the court jurisdiction provisions stipulated in paragraph (b) or with the prohibitions stipulated in paragraphs (c) and (d) of this Article.
Precious
metals; fossils; ancient, historical, and archeological relics and antiquities;
treasures; coins; and other valuable items that a party
contracting with a Government Entity discovers, in the course of performing a
Contract, will be deemed the property of the Government. Upon discovery of such items, the contracting party must immediately notify the Government Entity
of the same; and take the necessary precautionary measures to prevent any removal
of, or damage or impairment to, these items.
a. A Director General may delegate
any of his powers under this Law to any employee of the
Government Entity. For this delegation to be valid, the following requirements
must be satisfied:
1. The powers to be delegated must
fall within the powers of the Director General under this Law.
2. Delegation must be in writing.
3. Delegation must be granted to the
concerned person in his official rather
than personal capacity.
4. Delegation must be time-limited. The time limit may not exceed two (2)
years per instance of delegation.
5. Delegation must not grant all the powers vested in the delegating
person.
6. Delegation must not adversely
affect the
control of Public Funds or compromise the internal audit rules.
For example, delegation must not authorise an employee to perform two (2) roles in the same financial transaction; one is falling
within his original job duties, and
the other is granted by delegation.
b.
For the purpose of application of paragraph (a) of
this Article, the delegation process must be performed pursuant to a delegation
of power schedule, and a copy of this schedule must be communicated to the DOF
and the Financial Audit Authority in the Emirate.
The
provisions of this Law apply without prejudice to the discretion of any Government Entity to procure its Purchases from any projects or programmes that the Government decides
to support, particularly those registered in the Hamdan bin Mohammed Programme
for Young Business Leaders and governed by the above-mentioned Law No. (23) of 2009.
The Director General of the DOF will issue the
resolutions required for the implementation of this Law. These resolutions will
be published in the Official Gazette.
The above-mentioned Law No. (6) of 1997 is hereby
repealed. Any provision in any other legislation will also be repealed to the
extent that it contradicts the provisions of this Law.
This Law will be published in the Official Gazette and
will come into force on 1 January 2021.
Mohammed bin
Rashid Al Maktoum
Ruler of Dubai
Issued
in Dubai on 24
November 2020
Corresponding to 9 Rabi al-Thani 1442 A.H.
©2021
The Supreme Legislation Committee in the Emirate of Dubai
[1]Every
effort has been made to produce an accurate and complete English version of
this legislation. However, for the purpose of its interpretation and
application, reference must be made to the original Arabic text. In case of
conflict the Arabic text will prevail.