Law No. (6) of 1997
Concerning
Contracts of Government Departments in the Emirate of
Dubai
(Amended and Consolidated)[1]
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We, Maktoum bin Rashid Al Maktoum, Ruler of Dubai,
After perusal of:
The Instructions Concerning Contracts Concluded by the Government of
Dubai and its Departments and Corporations issued on 6 February 1988, and their
amendments dated 15 March 1988;
The Instructions Concerning Arbitration Clauses in Contracts Concluded
by the Government of Dubai and its Departments and Corporations issued on 6
February 1988;
The Instructions Concerning Government Lawsuits issued on 2 July 1993;
Law No. (5) of 1995 Establishing the Department of Finance; and
Law No. (7) of 1995 Concerning the Financial Regulations of Government
Departments in the Emirate of Dubai,
Do hereby issue this Law.
This Law will be cited
as “Law No. (6) of 1997 Concerning Contracts of Government Departments in the
Emirate of Dubai”, and will come into force on the day on which it is published
in the Official Gazette.
In application of the
provisions of this Law, the following words and expressions will have the
meaning indicated opposite each of them unless the context implies otherwise:
|
Ruler: |
The Ruler of the Emirate. |
|
Emirate: |
The Emirate of Dubai. |
|
Government: |
The Government of Dubai. |
|
Department: |
A Government department,
including any corporation, agency, or authority affiliated to the Government. |
|
Head of Department: |
A head of a Government
Department, corporation, agency, or authority. |
|
Director General: |
A director general of a Government
department, corporation, agency, or authority, or his assignee. |
|
Contract: |
A written agreement,
including all annexes thereto, between a Department and any public or private
legal person or any natural person, to supply materials, implement works, or
provide services. This includes accepted purchase orders for materials, work
orders, and services orders. |
|
Committee: |
The tenders and negotiations
committee at a Department. |
The provisions of this Law apply to the following Contracts
concluded by Departments, except those exempted by the Ruler:
1. Contracts for the supply
of materials, implementation of works, or provision of any type of services, under
which a Department incurs expenses; and
2. Contracts for the sale or
lease of movable or immovable property, under which a Department generates
revenues, or any other revenue-generating Contracts.
Contractors will be selected through one of the
following methods:
1. public tender;
2. limited tender;
3. negotiation;
4. direct agreement; or
5. competitive tender.
Contracts will be concluded based on the following rules and
standards:
1. the actual need for
supply of materials and provision of services;
2. the economic feasibility
studies of projects; and
3. availability of the required
budget appropriations.
The authorities mentioned in the following table or their
assignees or duly authorised representatives will, within the limits of the
amounts indicated opposite each of them in the table, authorise the method of
selecting contractors, approve the awarding decisions, sign Contracts, or
cancel the awarding or the tender. Dividing purchase transactions by an
authority to bypass the powers of a higher authority is prohibited.
|
Competent Authority Method of Contracting |
Director
of the Contracts and Procurement Directorate or Competent Entity |
Director General |
Head of Department |
|
Public tender |
-- |
5,000,000.00 |
Higher
amount |
|
Limited tender |
-- |
2,500,000.00 |
Higher
amount |
|
Negotiation |
250,000.00 |
1,000,000.00 |
Higher
amount |
|
Direct agreement |
50,000.00 |
250,000.00 |
Higher
amount |
1. A Committee for
tenders and negotiations in which the finance directorate and the Contracts and
procurement directorate or competent entity are permanently represented will be
formed in each Department pursuant to a decision of its Director General.
2. The Committee may have a
technical member experienced in the subject matter of the Contract. This member
will be appointed by the Director General where necessary and will have no
vote.
3. Meetings of the Committee
will be valid only when attended by its chairman or his duly assigned
representative and at least two-thirds of the committee members. The Committee’s
recommendations will be passed by absolute majority vote of the attending
members.
A direct purchase committee will be formed in each Department
pursuant to a decision of its Director General. This committee will include a
member from the finance directorate, and a member from the Contracts and procurement
directorate, or the competent division. The decision will determine the Committee’s
duties, powers, and terms of reference in accordance with the provisions of
this Law.
The Contracts and procurement directorate in a Department or its
assignee will, in coordination with other concerned directorates, take the
initial procedures necessary for concluding Contracts in accordance with the
provisions of this Law.
The Contracts and procurement directorate or competent entity in
each Department will maintain a register of suppliers, contractors, and
professional entities providing various types of services. The register must
contain all essential information about these entities and information must be
regularly updated. The suppliers, contractors, and service providers will be
classified in a manner that facilitates assessment of their technical and
financial capabilities, attitude, and performance, to ensure they are qualified
to deal with the Department.
Registration on the register will be effected upon the request of
a supplier, contractor, or service provider, who will be required to submit the
following information and undertake to notify any future variation of such
information:
1. the trade name,
address, P.O. Box, cable address, telephone numbers, and fax numbers;
2. the legal form and the
licence issued by the competent entity;
3. name and signature specimen
of the authorised signatory (signatories);
4. types of materials, works,
and services provided or performed;
5. names of principals for which
they are appointed as agents under agencies registered with the competent entities;
6. track record in performing
Contracts with other entities, and the volume and types of works;
7. the company’s memorandum of
association, or evidence that the company is wholly owned by UAE nationals or
that one or more UAE nationals hold no less than fifty-one percent (51%) of the
capital, and a statement of the company’s capital; and
8. any additional information
required by the Department in accordance with its objectives and functions.
A party to be contracted by a Department must:
1. be a UAE national
individual or a company owned by UAE nationals in whole or in partnership with
foreigners, with no less than fifty-one percent (51%) stake held by UAE
nationals, which must be proven by an official registered contract;
2. be licensed by the competent entity;
3. not be prohibited from
participating in the tenders and negotiations conducted by any Department;
4. neither be an employee of the
Department with which the Contract is made, nor a first-degree relative of the
officials in charge of contracting; and
5. meet the financial, and technical
or professional conditions stipulated by the terms of the Contract.
Notwithstanding the provisions of
paragraph (1) of Article (12) of this Law, a Contract may be concluded with a foreign company operating within or outside of the
UAE or with a company established in a free zone, provided that the Department
is in urgent need of certain supplies or services, for which no appropriate
alternative can be provided by local national companies.
Public tender is the primary method for selecting contractors. A public
tender will be initiated through a public announcement within or outside of the
UAE, or both. The tendering process and award of tenders will be in accordance
with the procedures stipulated in this Law.
An applicant entity must include the following in its request:
1. clear and accurate
statement of full technical specifications of the required materials, and
detailed technical drawings and designs of the works to be implemented and the
nature and type of services to be provided;
2. classification of the
required materials in accordance with the warehouse classification manual of
each Department. Specifications must be in accordance with the international
standards without mentioning a specific type, trademark, or brand name, except
for monopolised materials and products. These products must be determined by a
competent technical committee which confirms that they are monopolised.
Specimen, samples, illustrative drawings, or catalogues of the monopolised products
must be provided;
3. quantities of the required
materials based on their stock and consumption rates, subject to the minimum
and maximum order quantity;
4. quantities related to works
based on the drawings, designs, and schedules of the works to be implemented;
and
5. the type, description, method
of delivery, and performance and implementation programmes of the services.
The Contracts and procurement directorate or the competent entity
in each Department will prepare the tender documents and conditions before
announcing the tender. These documents will:
1. include full and clear
statement of technical specifications of the required materials, works, or
services;
2. include the quantities of the
required materials, the schedules and bills of quantities of the required
works, or the scope of the required services;
3. where necessary, stipulate
that samples, catalogues, illustrative drawings, or implementation programmes
be provided by the bidder and bear the seal of the bidder;
4. stipulate that prices and
currency of supplies be stated, that prices are specified on the same basis,
i.e. (FOB), (CIF), (C&F), or any other basis applicable in external
tenders, and that the place and date of delivery, the basis of packaging,
weight, volume, size, and origin be specified;
5. state the start and end dates
for submitting bids, the date of tender opening, and the validity of bids;
6. state the payment terms and
the guarantees for the supply of materials, implementation of works, or
provision of services;
7. stipulate that the validity of supplies and satisfactory
performance of required works and services are guaranteed, and that maintenance
is guaranteed for the period specified in the tender documents;
8. state the penalty clauses,
fines, and right to claim compensation where necessary, and any other
conditions the Department may deem that bidders must comply with; and
9. be drafted in Arabic in the
event of local tenders. Tender documents may be drafted in both Arabic and
English where necessary, and in case of any discrepancy between the Arabic and
English versions, the Arabic text will prevail. Specifications of technical
devices and equipment may be drafted in English only.
The Contracts and procurement directorate or competent entity in
each Department, will prepare an accurate study of market prices to determine
the estimated cost of supplies, works, or services requested in the tender. For
this purpose, the Contracts and procurement directorate will seek the
assistance of the competent technical entity within the same Department. This
study will be submitted to the Committee to use it for guidance when comparing
the prices offered by bidders.
A tender will be announced sufficient time before the date of delivery
of the requested supplies, works, or services in order to allow re-tendering
where necessary. Tender announcement will be published in two different daily
newspapers and displayed on the Department’s bulletin board.
In addition, the tender may be announced in other media, and the
announcement will be made in Arabic, in both Arabic and English, or in English
only if the announcement is published abroad where the subject matter of the
tender so requires.
A tender announcement must indicate:
1. the required
materials, works, or services;
2. the method of applying for
the tender and the entity receiving applications;
3. the time frame for submitting
bids, which may be neither less than ten (10) days nor more than sixty (60)
days from the date of the announcement;
4. the bid validity;
5. the fees for tender
documents, the place where tender documents can be obtained, and the required
guarantees; and
6. any other information or
requirements the Department deems necessary to be announced.
Tender documents, including tender conditions and lists of required
materials; details and specifications of required works; or types of required
services, will be delivered immediately after the tender announcement and
collection of the fees for tender documents from the persons who wish to
participate in the tender. Tender documents must be stamped and numbered by the
Department and signed by the director of the Contracts and procurement
directorate or the person having his functions.
Where a tender is cancelled before tender opening, the fees for
tender documents will be refunded to all participants who have paid them. These
fees will be refunded to participants who have submitted their bids only if the
tender is cancelled after tender opening, and may not be refunded after tender
opening if the submitted bids fail to meet the prescribed specifications or
conditions.
When submitting their bids, all participants must comply with the
following :
1. A bid must be
submitted in a single envelope containing two envelopes closed with sealing
wax. Each envelope must bear the name and seal of the bidder. The first
envelope must contain the documents stipulated in Article (12) of this Law, in
addition to the signature specimen of persons authorised to sign, conclude, and
perform Contracts in person or by proxy. The second envelope must contain the
bid and bills of quantities on forms bearing the seal of the Department. These
forms must contain the required information and be signed and stamped by the
bidder.
2. Bid envelopes must be placed
in the bid box of the announced tender. Samples, if any, must bear the seal of
the bidder and be handed over to the competent entity in return for a receipt.
Bids submitted after the deadline specified in the tender announcement may not
be accepted.
3. Bids must be priced in the
UAE official currency. The total value of the bid must be written in figures
and letters, and in case of discrepancy, the value in letters will prevail. No
scratching or erasing may be made on the bills of quantities, prices, and bid
value. Corrections must be made by striking out the incorrect part, and must be
signed by the bidder. Bids may be priced in a foreign currency in case of
tenders inviting bids from abroad.
4. Should a bidder fail to price
an item, he will be deemed to be unwilling to include that item in the tender,
but 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 Department to
accept the bid. In the event of an indivisible Contract, an unpriced item may
be assigned the highest price in other bids for the purpose of comparison, and
the lowest price in other bids for the purpose of awarding the tender provided
that it is in the interest of the Department to accept the bid and without
prejudice to the right of the Committee to exclude the bid.
5. Submitted prices will be
deemed final, and may not be changed due to fluctuation of prices, currencies,
taxes, or charges. Prices will remain binding until delivery of products,
completion of works, or provision of services at the specified times and
places.
6. Bids submitted on the basis
of deducting a certain percentage from the lowest bid may not be accepted, and
prices must be clearly and precisely specified for each item in the tender.
7. A participant may submit more
than one bid for the same tender, provided that each bid is submitted
independently with a separate set of tender documents.
8. Under the penalty of
exclusion of the bid, a participant may not omit, delete, modify, or replace
any of the bid terms, conditions, or technical specifications.
9. All bid documents will be
deemed the personal property of the bidder who obtained the same, and may not
be assigned to third parties.
The following must be observed in determining the bid validity
period:
1. A bid validity period
must be specified in tender documents, and may be extended for an additional
period. However, the bid validity period must not exceed sixty (60) days.
2. A participant may not
withdraw his bid if a Department decides to extend, on the same conditions and
prices, the period of validity of the bid and guarantees for an additional
period commencing from the expiry of the original period.
3. The period required for
tests, chemical analysis, and technical experiments for supplies will be added
to the bid validity period. In the event of works or services Contracts, bid
validity will be extended as required on a case-by-case basis.
4. The decision awarding the
tender must be made and the winning bidder must be notified of the same before
the expiry of the bid validity period specified in the tender documents or any
extension of that period.
1. Bids will be submitted
together with a lump sum bid bond in the form of an unconditional and
irrevocable letter of guarantee in the name of the relevant Department issued
by a bank operating in the UAE. The value of the bid bond will be specified by
the Department, and will range between two percent (2%) and five percent (5%)
of the estimated value of the bid.
2. A bid bond will be valid as
of the submission date and for a minimum of thirty (30) days commencing from
the bid expiry date. In the event of extending the bid validity for a further
period, the bidder must extend the bid bond validity for the same period,
provided that the bidder is notified by a registered letter with acknowledgment
of receipt.
3. Bid bonds will be
returned to unsuccessful bidders upon expiry of the bid validity period, or
before that date if the tender is awarded and the performance bond is received
from the winning bidder.
4. Without the need for a notice
or court order, a bid bond will be confiscated and considered as revenue
received by the Department if the participant withdraws his bid before the date
scheduled for tender opening or if he refuses to extend the bid bond validity
upon extension of the bid validity period.
Bid envelopes will be opened by the Committee in a public session
attended by the participants in the tender or their representatives on the date
specified in the tender documents. The Committee must complete tender opening
in a single session, failing which all documents will be kept in a locked
cabinet until the Committee resumes tender opening.
The Committee must
follow the following procedures:
1. The Committee must
ensure that envelopes are properly sealed with wax, record their number on a
list, and indicate a serial number and the tender reference number on each
envelope.
2. Envelopes must be opened
according to their serial numbers and the name of bidder must be mentioned when
opening the envelopes. The envelope containing the documents must be opened
first to ensure that requirements are fulfilled and that the bid bond is
provided. A list of accepted and disqualified bids and the reasons for
disqualification must be prepared. The chairman and members of the Committee
must countersign the quotations and bid bonds for all submitted bids.
3. The second envelope
containing the prices will be opened and the total price will be announced to
all attendants. A list containing the names of participants and the value of
their respective bids will be prepared.
4. Letters of bank guarantee
submitted as bid bonds will, after verifying that they meet the validity and
value conditions, be delivered to the competent financial entity to be
maintained and reviewed. Copies of these letters must be sent to the Contracts
and procurement directorate or to the competent division.
5. The chairman of the Committee
must countersign any scratching or correction. Prices written in figures must
also be written in letters. A list of unpriced products or items must be prepared.
6. Samples, catalogues,
illustrative drawings, or service programmes contained in each envelope will be
recorded in the name of the bidder in the Committee's report. In addition,
lists or receipts of samples which are not contained in the envelope will be
recorded in the report, and stamped or otherwise distinguished by a mark
indicating the submitting entity.
7. The Committee will record the
details of bids on the form prescribed for this purpose in a manner that
facilitates comparison between bids. Any conditions, remarks, or reservations
made by the participants will be recorded in that form.
The Committee will sign the bids after being audited by a
competent entity. If the breakdown of prices does not add up to the total bid
value, the Committee will be entitled to correct the total bid value even if
this leads to an increase of the value, as long as prices of items are the
lowest prices among submitted bids.
The Committee will refer bids which require special technical or
accounting study, or analysis of samples to a specialised technical entity for
considering and analysing them, and submitting findings to the Committee. This must
be completed before bids expiry. Where necessary, the validity of bids may be
extended.
If a sole bid is submitted for a tender, the Committee may, after
considering the bid in view of the study referred to in Article (17), accept or
reject the bid in accordance with the exigencies of the public interest. If the
sole bid is rejected, the tender will be re-announced. However, if a sole bid
is submitted again, the Committee must consider and negotiate it with the
bidder. A bid will be considered 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.
The Committee must observe the following upon selecting a winning
bid:
1. The bid of the lowest
price must be selected, provided that it meets the prescribed requirements and
specifications. The Committee may accept a bid of a higher price, provided that
this decision is reasoned and guided by the study referred to in Article (17)
and the provisions of Article (27) of this Law.
2. If the prices and
specifications of two bids are equal, the Committee may divide the quantities
between the two bidders who offer equal prices if this division is possible and
in the interest of work. The Committee may also negotiate to obtain the lowest
prices.
3. If the bid of the lowest
price contains reservations and the next bid does not include any reservations,
the Committee may negotiate with the bidder of the lowest price bid to waive
his reservations. However, if the said bidder refuses such waiver, the
Committee may award the tender to the next bidder or cancel the tender if this
is in the interest of work.
4. When awarding the tender, the
Committee may give priority to national industrial products within the limit of
ten percent (10%) of the price provided that these products serve the purpose
of the tender and match the quality of foreign products.
5. The Committee may cancel the
tender if all submitted prices are too high compared to the prices in the study
referred to in Article (17) of this Law.
6. If any of the Committee
members disagrees with other members, this must be recorded in the Committee's report.
If the dissenting member is the technical member, the chairman must refer the
matter to a specialised technical committee for advice.
7. For the purpose of comparing
local and foreign bids, prices must be calculated on the same basis such as net
weight, unit of weight, size, measurements, or delivery site, taking into
account the exchange rate of foreign currency at the date of tender opening.
8. The Committee will record the
procedures taken in an official report containing its comments and
recommendations to be signed by the chairman and members of the Committee. All
tender documents and bids will be attached to such report.
1. Upon completion of the tender process and
selection of the winning bidder, the Committee will, in accordance with Article
(6) of this Law, submit to the competent authority its recommendations for
approval.
2. The approval of the Committee’s
recommendations will be deemed as award of the tender to the winning bidder who
will be notified by a registered letter with acknowledgment of receipt.
Nevertheless, awarding the tender and notifying the winning bidder will not
create any right to the winning bidder against the Department if the Department
decides to renege on the awarding decision for any reason. The Department will
be liable only as of the date of signing the Contract.
1.
An interest-free performance bond of ten percent (10%)
of the value of the Contract will be provided by the winning bidder. The
performance bond will be in the form of an unconditional and irrevocable letter
of guarantee issued by a bank operating in the UAE, and will be submitted on a
special form prepared by the concerned Department. Unless the Committee decides
otherwise, 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 delivery in case of works Contracts.
2.
In the event that the Contract value cannot be
precisely determined, the value of the performance bond will be a lump sum.
3.
The amount of the performance bond must be increased
if the value of the supplies, works, or services exceeds the value specified in
the Contract. Where a contractor fails to satisfy the full amount of the
performance bond, the Department will be entitled to deduct the required amount
from any sum due to the contractor.
4.
In case of divisible supply Contracts, the amount of
the performance bond may be gradually reduced according to the percentage of
completion of the Contract, unless this leads to the performance bond becoming
less than ten percent (10%) of the value of the uncompleted part of the
Contract.
5.
Notwithstanding the provisions of paragraph (1) of
this Article, exemption from the requirement to provide a performance bond may,
subject to the approval of the Director General or his authorised
representative, be granted in the following cases:
a.
where the
supply period stipulated in a Contract does not exceed fifteen (15) days from
the date of signing the Contract, in which case the validity of the bid bond
must be extended for a period of not less than thirty (30) days from the final
delivery of supplies;
b.
in case of
Contracts for supplying materials and services, where the party contracting
with the Department is a foreign company operating within or outside of the
UAE, or a company established in a free zone, and the supplier refuses to
provide the performance bond while the Department is in urgent need of these
supplies and no appropriate alternative can be provided by another entity;
c.
without
prejudice to Article (64) of this Law, where the value of the Contract does not
exceed five hundred thousand Dirhams (AED 500,000.00)
and the subject matter of the Contract is performing works or providing
consultancy services; or
d.
without prejudice to Article (64) of this Law,
where the contractor is unable to provide the performance bond, and the subject
matter of the Contract is performing works whose value exceeds five hundred
thousand Dirhams (AED 500,000.00), up to two million Dirhams (AED 2,000,000.00),
in which case ten percent (10%) of the payments owed to the contractor will be
retained as security due to failure to provide the performance bond until the
final delivery of the project, and the retained amount may be paid to the
contractor in return for providing a bank guarantee for the same amount.
6.
Public corporations or authorities, and companies in
which the Government holds at least fifty percent (50%) of the share capital,
may be exempt from the requirement to provide bid bonds and performance bonds.
Where a winning bidder fails to provide or delays in providing the
performance bond within the period specified in the tender award notice, a
Department must confiscate the bid bond submitted by the bidder, hold him
liable for compensation for the damage sustained by the Department as a result
of this failure or delay, and collect the amount of compensation from the
bidder or deduct it from the bidder’s dues payable by any other Department.
Without prejudice to paragraph (4) of Article (32) of this Law, a
Department will retain the performance bond until completion of the Contract.
If the term of the Contract is extended, the validity of the letter of
guarantee will be extended to cover this extension. The performance bond will
be released upon meeting all the prescribed requirements and specifications,
and expiry of the performance bond. In any event, the contractor or his
creditors may not request an attachment against the performance bond during its
validity period.
Contracts will be drafted by Departments and will include all
elements of agreement, in particular:
1. tender reference
number, Contract date, and names, representatives, and domiciles of choice of
both contracting parties;
2. subject of the Contract with
a brief description of the contracted materials, works, or services;
3. term and commencement date of
the Contract, and scheduled date and place of delivery;
4. provisions related to
amendment to the Contract by increasing or decreasing quantities;
5. applicable penalties and
fines in case of delay in completion, withdrawal from, or discontinuation of
the performance of the Contract for any reason;
6. contract price, terms of
payment, advance payments, and various guarantees;
7. bills of quantities, prices
of supplies and works, and details of services;
8. requirements and cases for
subcontracting and requirements for Contract assignment;
9. provisions related to
extinction of rights by way of revocation, withdrawal, or cancellation of the
Contract;
10. provisions related to
settlement of disputes between both parties, and those related to competent
courts;
11. general conditions; and
12. particular conditions, if any.
The Contract will be signed by the competent authority within the
Department and by the contractor after submission of the required performance
bond.
A Contract to which the Government or any Department is a party
may not provide that arbitration be conducted outside of Dubai or that any
dispute regarding the arbitration or its related procedures be subject to any
laws or rules other than those in force in the Emirate. Any provision that
contradicts this rule will be deemed void and non-binding.
Notwithstanding the foregoing, where the public interest requires,
the Government or any of its Departments, corporations, or authorities may be
exempt from compliance with the provisions of this Article pursuant to a
written approval of the Ruler.
A Contract may not stipulate compliance with all or any of the FIDIC
international contracting standards by way of reference or by attaching them to
the Contract, except in special circumstances and subject to obtaining prior
written approval from the Ruler.
If a winning bidder fails to sign a Contract within the period
specified in the tender award notice without a valid reason, the performance
bond will be confiscated and the Contracts and procurement directorate or the
competent entity in the Department will submit a memo to the Committee to take
any of the following measures:
1. cancel the tender, and
re-tender the Contract;
2. award the tender to the next
winning bidder;
3. perform the Contract at the
expense of the winning bidder, hold him liable for all incurred expenses, and
collect these expenses from the bidder or set them off against any amounts due
to him from any other Department.
In any event, compensation for the damage suffered by the
Department will be collected from the bidder.
Limited tender is a tender to which approved suppliers,
contractors, or service providers are invited because they are competent and
specialised in the subject matter of the tender. Procedures and rules
applicable to public tenders will apply to limited tenders, except in respect
of tender announcement.
Invitation will be sent to approved suppliers, contractors, and
service providers listed in the register mentioned in Articles (10) and (11) of
this Law. Unregistered suppliers, contractors, and service providers may be
invited where this is in the interest of the Department.
Negotiation is a special method for selecting contractors, which
is adopted in the following cases:
1. where the
specifications of required materials, works, or services are difficult to
determine accurately and require technical expertise and specialisation;
2. where materials, works, or
services are urgently required and may not be delayed until the tender process
is complete, or if their value is not commensurate with the cost of tendering;
3. where materials, works, or
services have been previously tendered but no bids, unacceptable bids, or a
sole bid were received, and re-tendering is not possible due to the urgent need
for these materials, works, or services;
4. in case of supply of materials,
performance of works, or provision of services after a Contract with a former
contractor is revoked;
5. where the Contract is for
conducting research and experiments that require a special method of
performance which is inconsistent with the tendering process; and
6. where the Contract is for the
purchase of real property, for insurance, for freight, or for customs
clearance.
Negotiation will be adopted in contracting subject to the
financial approval powers stipulated in Article (6) of this Law. The following
procedures will apply in this respect:
1. The Contracts and procurement
directorate or competent entity will invite suppliers, contractors, or service
providers to submit their quotations. The invitation will contain the
description and specifications of required materials, works, or services and
all requirements, periods, dates, and places that will govern contracting.
2. Negotiation bids will bear
the signature and seal of the bidder, and will be submitted during the period
specified in the invitation together with all required documents and papers.
3. The Committee will convene on
the date scheduled for opening bids to verify that bidders meet the prescribed
conditions and to exclude participants who fail to meet these conditions. The
name of each bidder and total value of the bid will be recited.
4. The Committee will prepare a
report on the procedures followed, including prices, names of the bidders
participating in the negotiation, and the Committee’s recommendations as to the
winning bidder. The report will attach all submitted bids, and will be submitted
to the authority responsible for approving the outcome of negotiation.
Subject to the provisions of Articles (41) and (42), where the
value of a Contract exceeds one hundred thousand Dirhams (AED 100,000.00), the
general rules of public tender will apply to the negotiation to the extent
permitted by the nature of negotiation and the special circumstances warranting
the adoption of negotiation. However, if the Contract value is less than this
amount and the products, works, or services are to be delivered within fifteen
(15) days, a written undertaking by the contractor to perform the negotiated
Contract will be sufficient, in which case the contractor will be exempt from
the performance bond.
Direct agreement is an exceptional method for selecting contractors,
which is adopted in the following cases:
1. monopolised materials,
services, or works where it is not feasible to conduct a public tender, a
limited tender, or a negotiation;
2. urgently required materials,
services, or works, in which case the direct agreement must be limited to
minimum work requirements;
3. materials, services, or works
which have fixed prices or tariffs;
4. materials, services, or works
rendered by a Department or a company in which the Government holds at least fifty-one
percent (51%) of the capital;
5. services that require high
and specialised qualifications and competencies; and
6. books, periodicals, audio and
video tapes, computer software, and high-tech equipment.
In case of direct agreement, contractors will be selected through
one of the following methods:
1. Where the estimated
value of supplies, works, or services exceeds one hundred thousand Dirhams (AED
100,000.00), a direct purchase committee will request quotation(s) from the
supplier(s) or contractor(s), in which case suppliers or contractors will be required
to submit the performance bond prior to execution of the Contract.
2. Where the value of products,
works, or services ranges between ten thousand Dirhams (AED 10,000.00) and one
hundred thousand Dirhams (AED 100,000.00), the direct purchase committee
referred to in the preceding paragraph will request quotation(s). In this case,
the decisions of this committee must be approved by the competent authority,
whereupon a purchase order or work order will be issued, which indicates the
required products, works, or services and their prices, supply or performance
period, penalties, and any other requirements.
3. Where the value of products,
works, or services is less than ten thousand Dirhams (AED 10,000.00), the
director of a Department or his authorised purchasing representative will issue
a direct order for the purchase of products, performance of works, or provision
of services. An invoice will be submitted to the finance directorate together
with the supporting documents in accordance with the purchasing procedure. In
this case, referring to relevant quotations is advisable.
Competitive tender is a special method of contracting adopted to prepare
studies, designs, or technical drawings for a certain project or for a certain
purpose. Competitive tenders are conducted pursuant to the following rules and
procedures:
1. A Department will
specify the detailed objectives, scope, and specifications of the project, and
the prizes, rewards, and remunerations to be awarded to winners. The Department
will determine the ownership of winning and non-winning reports, studies, designs,
and drawings, and any other conditions the Department deems appropriate.
2. Invitation to participate in
the competitive tender will either be published in the media, or directly sent
to persons having the high experience and qualifications required for the
project offered for competitive tendering.
3. Pursuant to a decision of the
Director General, a jury will be formed of a number of specialists in the
subject matter of the competitive tender to review and evaluate the submitted
reports, studies, designs and drawings. The jury may invite participants to
discuss their submissions.
4. The jury will record its
proceedings in a report which states submitted bids; the opinions and standards
adopted when comparing bids; and the jury’s recommendations on the selection of
the winning bidder and the ranking of other bids. The jury will submit the
report containing these recommendations together with the bids to the competent
authority to take the appropriate decision.
5. The jury 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.
The definite term for performing supply or services Contracts will
commence from the day following Contract signing unless otherwise stated in the
Contract. In works Contracts, the term will commence from the date of handing
over the site to the contractor. If the contractor, or his representative,
fails to attend on the specified date to take over the site, a relevant report
will be issued and a copy of this report will be served on the contractor. In
this case, the date specified for the handover of the site will be the commencement
date of the Contract.
1. A Department has the
right to increase or decrease the quantities of a Contract before or during its
performance or within any extension period at the same rates and within thirty
percent (30%) of the total Contract value. The increase and decrease of quantities
may not be set off against each other regardless of the dates on which they
occur.
2. Variation of quantities may
exceed the limit stipulated in the preceding paragraph only if necessary
funding is available and the contractor agrees not to increase the prices
stipulated in the Contract where these prices are still reasonable and do not
exceed market prices.
3. Variation may involve adding products,
works, or services not stipulated in the Contract provided that these are
related to the subject matter of the Contract, in which case direct agreement
on the same may be concluded with the original contractor.
4. All variations must be referred
to the Committee to make the appropriate decision and submit this decision to
the competent authority for approval. Approved variations will be included in
an addendum to the Contract which will be signed by contracting parties.
A contractor must perform the Contract in accordance with the requirements
and provisions stipulated therein, and in particular must not delay in
performance, failing which the contractor will be subject to the penalties and
fines stipulated in the Contract and in this Law. Where non-compliance by the
contractor occurs due to an emergency, force majeure, or act of the Department,
the contractor must submit an application for exemption from penalties and
fines together with a proof of the occurrence of such emergency, force majeure,
or act within thirty (30) days from this occurrence. The application will be referred
to the Committee for consideration and verification. The Committee will make a
decision on whether or not to grant the exemption, which will be enforceable
only upon approval of the Director General.
Failure to submit an application within the above period will be
deemed as acknowledgement by the contractor that there are no reasons to
justify non-compliance with the Contract, and a waiver of the contractor’s
right to object.
A Contract may contain provisions
allowing for advance payments subject to the limits and conditions stipulated
in this Law and in the Contract. In any event, advance payments must be made against
bank guarantees in the same amount and currency.
A Contract may not be assigned or performed through subcontractors
for the original contractor without obtaining the approval of the relevant Director
General based on the recommendation of the Committee. In any event, the original
contractor will remain jointly liable with the assigns or subcontractors
towards the Department for any non-compliance with the Contract.
A Department may revoke a Contract in any of the following cases:
1. where the contractor
commits an act of deceit, fraud, or bribery, in which case the performance bond
will be confiscated, the remaining works will be completed at the expense of
the contractor, and the Department will reserve the right to claim damages;
2. bankruptcy or insolvency of
the contractor, in which case the performance bond will be confiscated and the
Department will reserve the right to claim damages; or
3. death of the contractor, in
which case the Department may terminate the Contract and return the performance
bond to the heirs of the contractor, or proceed with the Contract allowing the
heirs, or some of them, to continue performing it in their personal capacity in
accordance with the provisions of the Contract. In this case, the Department
will hold the heirs liable for the obligations arising out of the Contract,
particularly those related to the guarantees that must be provided by these
heirs.
Directors General will form the necessary committees to follow up the
performance of Contracts during all performance phases. Decisions issued in
this regard will determine the duties of these committees and regulate their work,
including preparing the inspection, handover, and follow-up reports, and satisfying
all requirements for performance of Contracts.
Depending on the
nature of supplied materials, a Department will have the right to inspect and
examine the supplies at the place of manufacture before they are consigned to
it provided that this is stipulated in the Contract.
If a supplier delays in supplying, or fails to supply, all or part
of the required materials beyond the deadlines stipulated in the Contract, or
if the supplied materials are rejected by the receiving committees, a
Department may, pursuant to a decision by its Director General, extend the deadline
for an additional period of up to thirty (30) days without charging any delay
penalty, if this is in the interest of the Department:
·
In case of failure to supply materials by the stipulated deadline, or any
extension thereof, the supplier will be charged delay penalty of two percent
(2%) of the value of delayed materials for each week of delay or part thereof, in
which case the aggregate delay penalty may not exceed ten percent (10%) of the
total value of delayed materials. However, if the delay in supplying part of
the materials precludes the use of all materials, the delay penalty will be
charged based on the total value of materials.
·
If the supplier continues to delay the supply until
the penalty amount reaches the maximum limit, the Department will, without
further need for a legal notice or court judgment, have the right to:
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 damages.
Supplies will be received in two stages as follows:
a.
Initial receipt
1. Supplies will be initially
received at the time and place specified in the Contract. An initial receipt document
will be issued and signed by the warehouse keeper if the receipt takes place in
a warehouse, or by the officer in charge of the site if the receipt takes place
at site.
2. The
warehouse keeper or the
officer in charge of the initial receipt must verify that the supplies conform
to the specifications stipulated in the supply Contract and the number, weight,
or size details stated in the supplier’s invoice, or conform to the details
stipulated in the shipping documents or delivery note. The receiving officer
must record any observations related to the condition of packages or boxes, and
must clearly state in the initial receipt document that the supplies are
subject to inspection and testing. The receiving officer must allocate an
appropriate place for storing each type of supplies provided by a specific
supplier until they are inspected and finally approved. The invoice and a copy
of the initial receipt document will be sent to the finance directorate at the relevant
Department.
b.
Final receipt
1. An inspection and receipt committee will be formed
pursuant to a decision of the Director General. Where dictated by the nature of
materials, the entity requesting these materials will be represented in this
committee.
2. The above committee will convene no later than seven (7) days
after the date on which it is notified of the initial receipt by the warehousing
section. The supplier must be notified of the date of this meeting to attend in
person or delegate a representative to attend the inspection and final receipt.
3. Supplied materials will be inspected, tested, and received in
accordance with the conditions and specifications stipulated in the Contract
and attached documents, and will be compared with the sealed and approved
samples, catalogues, and drawings. Where necessary, the committee may seek
assistance of any specialised technical entity to verify conformity of supplies
to technical specifications.
4. Imported materials will be inspected in presence of a
representative of the insurance company within the period specified in the
insurance contract, and will be checked against the approved invoice and
shipping documents. Seals, shipping marks, boxes, and box contents will be
examined to verify their integrity and record any damage, shortage, excess, or
non-conformity with the specifications in order to establish the liability of
the insurance company or supplier in accordance with the terms of the Contract.
5. Rejected materials will be excluded, in order to be returned to
the supplier.
6. An inspection and receipt report will be prepared, which will
include all actions taken, inspection and examination results and reasons for
acceptance or rejection of all or part of the materials. The report will be
signed by all members and submitted to the finance directorate and other
competent entities.
7. Where the supplies which are contracted for outside the UAE arrive
before the relevant commercial invoice is received and the inspection and
receipt committee deems, based on valid reasons, that these materials must be
received, the receipt procedures stipulated in this Law will be followed based
on the pro forma invoice or any other documents, in which case the supplier
will be required to send the commercial invoice immediately. In case of
discrepancy between the supplies and the pro forma invoice, receipt may be
postponed until the commercial invoice arrives, or else supplies may be
received upon taking the necessary actions to preserve the rights of the
Department.
8. The supplies’ final receipt document will be issued by the
competent officer based on the inspection and receipt report. Supplies will be
entered into the inventory records or the assets and property records, as
applicable.
The inspection and receipt report will be referred to the
Committee or to the purchase committee, as applicable, in the following cases:
1. to determine any disputes
arising between the supplier and the inspection and receipt committee;
2. to determine any disputes
arising between the technical member(s) and other members of the inspection and
receipt committee; or
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 and meet the work
requirements, to decide, at its own discretion, to accept the alternative materials
at the original prices stipulated in the Contract or at lower prices.
In case of rejection of materials, the following will apply:
1. The warehouse keeper
will store the rejected materials separately until they are delivered to the
supplier.
2. The Contracts and procurement
directorate or the competent division at a Department will notify the supplier,
by a registered letter with acknowledgment of receipt, of the rejection of
materials and the reasons for rejection, will request the supplier to remove
the materials and supply alternative materials within a period specified in the
letter, and will advise the supplier of the consequences of refusal or failure
to act accordingly.
3. If the supplier abstains from
or refuses receiving rejected materials within the period specified in the
notification letter, the supplier will be charged a storage penalty of one
percent (1%) of the value of rejected materials per week, in which case, the
aggregate storage penalty may not exceed five percent (5%) of the value of
materials, in addition to the prescribed delay penalty.
If the supplier insists on
his refusal or abstention, the Department will have the right to sell the
materials at public auction, recover all expenses and penalties, and return the
balance to the supplier.
4. Where the supplier requests
technical re-inspection or re-analysis of the rejected materials, the resulting
expenses will be borne by the supplier unless the outcome of re-inspection and
re-analysis is in his favour, in which case the Department will pay all
expenses, provided that it approves in advance the entity conducting inspection
and analysis.
Materials which, due to their nature, do not require thorough
technical inspection may be finally received by the warehouse keeper provided
that their value does not exceed twenty five thousand Dirhams (AED 25,000.00). Where
the value of materials exceeds this limit, the inspection and receipt
procedures stipulated in the preceding Articles will apply.
A contractor will be responsible for maintaining order in the work
site and will be liable for any damage to public or private property caused by
him or his workers, or as a result of the performance of the Contract. The
contractor must comply with the applicable laws and bylaws concerning workers
and their rights and safety.
A contractor will be deemed to have
agreed to the designs, drawings, specifications, and bills of quantities of a
Contract, and have acknowledged that they are sufficient to ensure proper
implementation of works under the Contract. Without prejudice to the provisions
of Article (48) of this Law, a Department may, whether prior to or during the
performance of the Contract, correct any error or omission in the
specifications, drawings, or designs without compensating the contractor, on
condition that this will not result in any change in the main specifications,
increase in quantities or measurements, change in the term of the Contract, or
removal of completed structures.
In any event, the contractor must ensure the validity and
suitability of the approved specifications, drawings, designs, and quantities,
and must notify the Department or the consultant of his observations regarding
the same.
A contractor must:
1. submit to the Department and the supervising consultant, within the time
frame stipulated in the Contract, a work schedule that includes all stages of
performance until final completion, and obtain the Department’s approval of the
schedule.
2. not engage subcontractors
without a written approval from the Department and the supervising consultant.
This approval will not exempt the contractor from full liability for the performance
of the Contract.
3. complete works under the
Contract, including any variation orders issued in respect of these works so
that initial delivery takes place by the deadlines stipulated in the Contract,
or by any extended deadlines resulting from variation orders.
Where a contractor delays the commencement or remarkably delays performance
of works and the Department is ascertained that this will prevent completion of
works by the deadline, or suspends work for a period exceeding fifteen (15) consecutive
days, withdraws from performing work, or fails to comply with the provisions of
the Contract, the Department will have the right to withdraw the works from the
contractor and take any of the following actions:
1. carry out all uncompleted
works through direct order, in which case the contractor will have no right to
claim any cost savings; or
2. negotiate with another
contractor to complete the works.
In order to ensure performance of works, a Department will have
the right to retain any tools or equipment belonging to the defaulting contractor
at the work site, and use the same to complete the works without any liability
for damage to these tools and equipment. The contractor will be liable for all
damages to which the Department may be entitled due to withdrawal of works from
the contractor, and will also be liable for ten percent (10%) of the value of uncompleted
works to cover the administrative fees incurred by the Department to perform
the works.
To ensure settlement of these amounts, the Department may seize
the contactor’s tools and equipment existing at the work site after completion
of works.
Payments will be made to the contractor as follows:
1. on-account payments of ninety percent (90%) of the value of completed
works and eighty five (85%) of the value of materials supplied to the work site
as per the statements of completed works (summary reports) and statements of supplied
materials which are provided by the contractor, and financially and technically
audited and approved by the supervising consultant and the technical unit at
the Department.
2. a final payment based on the final
statement of completed works provided by the contractor, the payment
certificate approved by the supervising consultant, and the approval of the
Department. Disbursement of the final payment will be subject to the following:
a.
on-account payments previously disbursed in respect of the works or
materials will be deducted; and
b.
five percent
(5%) of the final payment will be retained as guarantee until the final receipt
of the project. The retained amount may be released to the contractor against a
bank guarantee of the same value.
The contractor must complete all works
stated in the Contract in accordance with the conditions and completion date stipulated
therein. If the contractor fails to comply with the completion date, he will be
charged a delay penalty to be specified in the Contract for every day of delay,
on condition that the total delay penalty will not exceed ten percent (10%) of
the value of the Contract. Without prejudice to the right of the Department to
hold the contractor liable for the supervising consultant’s fees for the period
of delay, the delay penalty will commence to accrue upon the occurrence of the
delay without the need for any notice, legal proceedings, or proof of the damage.
The provisions of Article (63) of this Law may apply if the amount of penalty
exceeds ten percent (10%) of the value of the Contract.
The contractor may also
be exempt from the delay penalty in accordance with the provisions and
procedures stipulated in Article (49) of this Law.
In case of general, exceptional, inevitable, and unforeseeable circumstances
or events which make it onerous for a contractor
to implement works and expose the contractor to gross loss due to circumstances
beyond his control, the contractor must continue implementing the works and
will have the right to claim reasonable compensation by submitting an
application to the relevant Committee. The Committee will consider the
application and submit its recommendations regarding it to the relevant Director
General for approval.
A contractor will notify the relevant Department
and consultant of the completion of works and will request to hand over
completed works. Initial receipt will be conducted, in the presence of the
supervising consultant, by a committee to be formed pursuant to a decision of
the Director General of the Department. This committee must ensure that the
contractor has completed the works in accordance with the provisions and
annexes of the Contract, or else may receive the works with reservations
regarding certain deficiencies, in which case the committee will prepare a list
of deficiencies and set the dates for their remedy. In case of failure by the
contractor to remedy such deficiencies, the provisions of Article (63) of this
Law will apply. The initial receipt report will be submitted to the Director
General to take the necessary action.
Upon completion of the works, a contractor must remove all
materials, debris, and construction residue from the site and must level uneven
ground at the site, failing which the relevant Department will have the right
to carry out these works at the expense of the contractor and deduct the cost from
the dues payable to the
contractor.
A contractor will remain liable, for a period of one (1) year from
the date of initial receipt, for guaranteeing and maintaining the works subject
matter of the Contract, and must remedy any defect that results from defective
implementation of works.
The contractor will also remain
liable for a period of ten (10) years in respect of any substantial defects in
the constructions that result from defective implementation of works, without
prejudice to the liability of the supervising consultant for such defect.
Upon expiry of the warranty and maintenance period of the
Contract, the final receipt of works will be conducted by a receiving committee
in presence of the consultant. Performance by the contractor of all his
obligations will be verified, and thereupon a final receipt certificate will be
issued by the receiving committee and the consultant and approved by the
Director General. The retained guarantees will be released based on this
certificate.
All provisions of this Law, particularly those relating to works
Contracts, will apply to turnkey projects. Upon receipt of such projects,
movables with which the project is fitted or furnished must be recorded in
special lists in order to be entered into the assets register of the relevant Department
and be subject to the provisions related to spatial property held in trust.
No works Contracts may be concluded on
lump sum basis unless this is warranted by the nature of the required works and
it is impossible to accurately
determine the quantities and prices of individual items. Nevertheless, a
Department will seek to determine the prices of main items in these Contracts
to rely on them in case of any addition or cancellation of works based on variation orders or due
to any other reason.
The procedures provided for in Section Seven of this Law will
apply to the services Contracts entered into by the Department. Each Department
will determine the conditions related to each type of Contract, and in doing so
will refer for guidance to the procedures related to supply Contracts or works
Contracts depending on the nature of the services Contract and its relevance to
either type of Contracts.
This includes Contracts for the sale or lease of assets and
movable or immovable property owned by a Department in respect of which a sale
or lease decision is made, or any other Contracts generating revenue for the
Government. Such sale or lease must be conducted through one of the following
methods:
1. direct agreement;
2. negotiation; or
3. auction.
Direct agreement method is used for the sale or lease upon prior
approval of a Director General in the following cases:
1. if the sale or lease
is made to a public entity;
2. if the estimated value of
sales does not exceed one hundred thousand Dirhams (AED 100,000.00);
3. leasing by direct agreement
may be conducted, regardless of the rent, by a committee formed for such
purpose pursuant to a decision of the relevant Director General which provides
for the procedures to be followed by this committee. In any event, the Director
General will decide on the sale or lease and approve the outcomes of the
committee’s proceedings.
Sale by negotiation will be adopted if the estimated value of
sales ranges between one hundred thousand Dirhams (AED 100,000.00) and five
hundred thousand Dirhams (AED 500,000.00), and will be adopted regardless of
the estimated value of sales if sale by public auction fails. A Director
General will be authorised to approve sale by negotiation, adopt its outcomes,
and sign the resulting Contract.
The following rules and procedures will apply to sale by direct
agreement and sale by negotiation:
1. The competent entity at a Department will estimate the value of
materials and items to be sold based on their cost prices, market prices, term
of use, and any other factor causing price increase or decrease.
2. The competent entity at the
Department that intends to sell any of its assets will notify other Departments
of such intention and will send a list of these assets indicating their type,
quantity, number, and any other required details. It will request these
Departments, within the time frame specified in the notice sent to them, to
express their interest in the purchase or acquisition of assets in accordance
with the regulations in force.
3. In case no Department is
interested in the materials and items offered for sale, the competent entity
will invite bids from third parties interested in the purchase by contacting these
parties directly or sending them relevant correspondence.
4. Where dealing in the materials offered for sale requires a special
licence from any Department, direct agreement or negotiations will be conducted
only with parties having such licence or who undertake to export the items outside
of the UAE once the sale and delivery of such items are completed.
5. Bids submitted will be
referred to the Committee for review and selection of the highest bid in light
of the estimated value of materials and items offered for sale. The Committee
will prepare a report which includes the committee proceedings, the bids
received, and the decision rendered by the Committee, and will submit this report
to the relevant Director General for approval and signing of the Contract with
the buyer.
Sale by auction will be adopted if the estimated value of items or
materials offered for sale exceeds five hundred thousand Dirhams (AED 500,000.00).
A Director General will be authorised to approve the auction, to decide on its outcomes,
and to sign the resulting Contract.
The following rules and procedures will apply to sale by auction:
1. A competent entity
will estimate the value of assets offered for sale and determine the security
deposit to be provided taking into consideration the purchase price, estimated
useful life, technical condition, usability, and market prices of the assets.
The estimated value will be approved by the relevant Director General.
2. An auction committee will be
formed pursuant to a decision of a Director General, determining the type of
auction, be it sealed-bid auction or public auction.
3. The auction will be
announced, and the announcement must include the following:
a. description of the assets offered for sale, including
the type, quantity, location, and possibility of inspection, and any other
information;
b. type of auction, be it sealed-bid auction or public auction, and
date and place of submitting and opening sealed bids or conducting public
auction;
c. security deposits required from participants in the auction; and
d. any other information deemed necessary by the auction committee.
4. In case of sealed-bid
auctions, the auction committee will, at the place and time specified in the
announcement, open the sealed bids and determine the highest bid. Public
auctions will be conducted under the supervision of the auction committee in
public sessions attended by the participants who meet the relevant conditions,
including payment of the prescribed security deposit. The auction committee
will set the opening price for the auction, which may not be less than fifty
percent (50%) of the estimated value of assets.
5. The auction will be awarded to the highest bidder, that is, the
bidder who offers the highest price. Such a bidder will be the winning bidder.
6. The auction may be cancelled
if the highest bid is less than fifty percent (50%) of the estimated value of
assets offered for sale by auction.
7. The auction committee will prepare a report on the procedures
followed, which will include the outcome of the auction, last bid received, and
the decision of the auction committee to award or cancel the auction. This
report will be submitted to the relevant Director General for approval.
8. In case the auction is
cancelled, negotiation will be adopted.
9. Paid security deposits will
be returned to unsuccessful bidders at the auction session in return for the
receipts issued to them upon providing these security deposits.
The winning bidder will be required to top up the security amount
paid by him to twenty-five percent (25%) of the bid value. This security will
be provided as a performance bond in the form of a bank guarantee valid for the
period agreed upon for payment of the full price.
A Contract will be executed with the winning bidder, which will
include the key requirements and obligations arising from awarding the auction,
particularly those provided for in Article (82) of this Law.
1. Sold items will be delivered to the winning bidder upon full payment of
the price. The winning bidder must collect items within one (1) month from the
date of payment of their price or as stipulated 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 items. These
fees will be paid before delivery of items.
2. Should the buyer fail to pay
the price within one (1) month from the date of awarding the auction, the
performance bond paid by him will be confiscated and the assets will be
re-auctioned or a negotiation will be conducted, as deemed appropriate.
3. In case the subject matter of
auction is not sale of materials, the winning bidder must perform his
obligations no later than one (1) month from the date of executing the
Contract, failing which he will be
liable to pay the penalty stipulated in the Contract.
Subject to the Instructions Issued on 2 July 1992 Concerning
Government Lawsuits, the courts of the Emirate will have jurisdiction over any
disputes arising between any Department and its contractors in relation to
Contracts concluded under this Law.
The Director of the
Department of Finance will issue standard templates and general conditions for
all types of Contracts referred to in this Law in accordance with the
provisions of this Law. All Departments will comply with these templates and conditions.
The Director of the
Department of Finance will issue the resolutions and instructions required for the
implementation of the provisions of this Law.
Any provision in any
other law or legislation will be repealed to the extent that it contradicts the
provisions of this Law.
This Law will be
published in the Official Gazette.
Maktoum bin Rashed Al Maktoum
Ruler of Dubai
Issued in Dubai on 22 April 1997
Corresponding
to 15 Thu al Hijjah 1417 A.H.
©2016 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.