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.