Kuwait Amends Public Tenders Law, Raises Contract Limit to KD1 Million

KUWAIT CITY, Sept 27: Kuwait has issued Decree-Law No. 94 of 2026 amending several provisions of Law No. 49 of 2016 concerning public tenders, introducing changes to government procurement procedures, Kuwait Petroleum Corporation purchasing, small and medium-sized enterprise participation, contractor classification and the appeals process.

The decree-law was published Sunday in the official gazette “Kuwait Alyoum.” Among the key amendments are raising the value of contracts that government entities may conclude without approval from the Central Agency for Public Tenders to KD1 million, prohibiting the use of local agents or commission agents in contracting procedures, raising the KPC procurement threshold subject to the law to KD20 million, and giving qualifying SMEs preference when their bids are no more than 10% above the lowest acceptable bid.

The decree-law also establishes a grievance committee attached to the Cabinet, which must decide complaints within 30 days, while introducing requirements for contractors to purchase local products and assign part of their contracted work to local contractors.

Article One replaces the texts of Articles 2, 5, 19, 26, 31, 39, 41, 49, 62, 62 bis, 78 and 87 of Law No. 49 of 2016 with the following provisions:

Kuwait Petroleum Corporation and its wholly owned subsidiaries, with regard to the procurement of goods, contracts and services, will be subject to the oversight of procurement contracts executed within Kuwait that exceed KD20 million, in accordance with the provisions of the law.

Procurement committees will be formed within KPC and its wholly owned subsidiaries to handle contracts of lesser value. Minutes of contracts concluded by these committees must be submitted to the oversight body, the State Audit Bureau and the Ministry of Finance.

The committees will also establish special conditions to facilitate the qualification and participation of small and medium-sized enterprises, in coordination with the National Fund for Small and Medium Enterprise Development.

The Cabinet may increase the threshold by decision based on a proposal from the KPC Board of Directors.

Subject to Article 152 of the Constitution, all oil operations, regardless of their value, are excluded from the provisions of the public tenders law.

The purchasing committees will operate according to rules and procedures approved by the KPC Board of Directors. Appeals against their decisions will also be handled under those rules and procedures, taking into account transparency, disclosure, governance, fairness, equal opportunities and the prevention of conflicts of interest.

The law will apply only where such rules and procedures are absent and in a manner that does not conflict with them.

The Supreme Petroleum Council may authorize KPC or one of its wholly owned companies to purchase or import items or assign contractors to carry out urgent work because of the nature of the materials or work required or because of urgent or emergency circumstances.

Such purchases or assignments may be carried out according to rules and procedures approved by the Supreme Petroleum Council without being bound by other applicable rules or procedures. The KPC chairman must subsequently notify the Supreme Petroleum Council of contracts reaching the amount specified under the applicable procedures.

The Board of Directors of the Central Agency for Public Tenders will consist of seven members, appointed by decree based on the nomination of the competent minister and after Cabinet approval.

Members will serve a non-renewable four-year term.

A full-time chairman and vice chairman will be appointed from among the members. For the first board formed under the new provisions, the terms of three members will end two years after appointment, with neither the chairman nor vice chairman among those whose terms expire.

A decree will determine which members' terms end and appoint their replacements for four-year terms.

The Cabinet will determine the members' remuneration, while their dismissal will be by decree based on a proposal from the competent minister.

Members must be Kuwaiti citizens of integrity with experience and specialization in engineering, oil, medical, economic or other fields related to the agency's work. They must not have been subject to a final bankruptcy ruling or convicted of a felony or a crime involving moral turpitude or dishonesty.

The board will also include:

The representatives of the entities listed above will be selected periodically, with a maximum term of two years.

The Board of Directors may seek assistance from experts from the concerned entity or elsewhere to clarify matters directly related to its responsibilities. Such experts will not have voting rights.

Government entities subject to the law may conclude contracts for purposes covered by the law without obtaining permission from the Central Agency for Public Tenders, provided the value of the contract does not exceed KD1 million.

Contracts for the same items or works may not exceed this limit during the same fiscal year.

Government entities may coordinate with the procurement systems department in accordance with the rules governing group procurement.

A single transaction may not be divided into several transactions with the intention of reducing its value below the agency's jurisdiction.

The concerned entity must provide the Ministry of Finance with periodic reports every six months on contracts concluded within the permitted limit.

The Cabinet may review the KD1 million threshold and increase or decrease it based on a recommendation from the agency.

The classification committee will classify general contractors into four categories according to their financial and technical capabilities.

The agency will establish special conditions to facilitate the entry of SMEs into the fourth category.

Contractor classifications will be periodically reassessed according to the standards and criteria established by the classification committee.

The executive regulations will determine the dates and procedures for applications, registration and classification, the requirements for each category and the procedures for appealing classification decisions.

Classification will not replace bidder qualification procedures. The concerned entity must still carry out the necessary qualification procedures to ensure that bidders are capable of executing the contract.

Anyone submitting a bid in a public or limited tender, direct practice or contracting procedure must, subject to the applicable laws and international agreements:

For foreign bidders, the applicable provisions will be determined according to the executive regulations.

The use of a local agent or commission agent is prohibited in all contracting procedures, according to rules approved by the Cabinet based on a proposal from the competent minister and following coordination with the relevant authorities.

Before announcing the supply of items or contracting of works through a public tender, and after final designs have been prepared, the concerned authority must prepare the tender documents and detailed specifications.

Design work must be separated from construction work unless the nature of the project requires otherwise.

Tender documents must specify the scope of the purchase, the period and location of execution, criteria for evaluating bids, instructions for contractors, drawings and accurate bills of quantities showing individual items and price schedules.

International standard specifications and government department specifications must be taken into account.

The executive regulations will determine cases in which fees may be charged for providing tender documents to prospective bidders.

The Council may assign the appropriate personnel within the agency to examine submitted samples from a technical perspective and determine whether they comply with the announced conditions.

The agency may also verify the technical competence of bidders and seek assistance from experts when necessary.

The specialist will submit a report containing the results of the examination and recommendations to the Council.

The envelopes will be returned to the agency, and the Council may seek assistance from appropriate personnel within the agency whenever necessary.

Financial envelopes will not be opened until the technical recommendation has been received.

Financial envelopes submitted by bidders whose offers have been rejected on technical grounds will be returned unopened.

Taking into account international and regional agreements approved by Kuwait, the Cabinet will determine the competent minister or relevant public entity responsible for issuing decisions regulating the products that receive priority in government procurement.

The Council or competent purchasing authority will award tenders to SME owners when their bids meet the required specifications and conditions and their prices do not exceed 10% of the lowest acceptable bid.

An SME bidder may not combine the priority granted to products under Article 62 with the preference granted to SMEs under Article 62 bis in the same tender.

In such cases, the Council may determine the award based on whichever of the two considerations it considers applicable.

The executive regulations will establish the conditions and requirements for SME participation in procurement operations covered by the law.

A committee for appeals against decisions of the Central Agency for Public Tenders will be established and attached to the Cabinet.

The committee will consist of five legal, financial and technical experts, appointed by decree based on the nomination of the competent minister.

Members will serve a non-renewable three-year term.

Any interested party may submit a grievance against an agency decision within seven working days from the date of publication or notification, whichever comes first.

The agency must provide the committee with the documents and information relating to the grievance when requested.

The committee must examine the grievance and issue a reasoned decision within 30 days from the date the grievance is submitted.

If the grievance is accepted, the documents will be returned to the agency to complete the procedures in accordance with its legal authority and taking the committee's decision into account.

The agency must notify the committee of the action taken.

The executive regulations will establish the committee's working procedures, the procedures for submitting and examining grievances, notification of the complainant and agency, and cases in which grievance fees may be refunded.

The committee may, in all cases, suspend the procurement process until the grievance is decided.

Subject to legislation governing direct foreign investment, the relevant authority will monitor the commitment of foreign and local contractors to purchasing at least 30% of the products listed in the industrial guide issued by the Public Authority for Industry.

If such products are unavailable, contractors may purchase them from local suppliers registered in the agency's supplier lists, provided the purchases are supported by approved receipts.

The relevant authority will also monitor the foreign contractor's commitment to assigning at least 30% of the contracted work to local contractors registered in the agency's contractor classification lists.

Up to 10% of this work may be allocated to SMEs, depending on the nature of the contract and the contractors registered and classified with the Kuwait Municipality or KPC and its subsidiaries.

Approval must be obtained from the authority supervising implementation of the contract.

The Cabinet may increase or decrease these percentages based on a proposal from the agency.

Article Two adds a definition of “oil operations” to Article 1 of Law No. 49 of 2016.

Oil operations are defined as all technical operations relating to the exploration, production, processing and export of oil and gas.

They include exploration and prospecting, field development, drilling and maintenance of hydrocarbon wells, production of hydrocarbons, processing, storage, transportation, loading, shipping, sale and purchase of oil and gas and their derivatives, as well as chemicals, petrochemical products and their derivatives and extracts and all related operational and specialized services.

Article Three provides for the repeal of Article 7 of Law No. 49 of 2016.

It also repeals any provision in other legislation that conflicts with the final paragraph of amended Article 31 concerning the prohibition on the use of local agents or commission agents.

The provisions introduced under Article One will not apply to procurement procedures announced before the decree-law enters into force, except for Articles 62 and 62 bis, concerning priority products and SME preference.

The current Board of Directors of the Central Agency for Public Tenders will continue in its existing composition until the end of its current term.

The next Board of Directors will be formed in accordance with the new provisions of Article 5.

The ministers, each within their respective areas of responsibility, will implement the decree-law.

The decree-law will come into force three months after its publication in the Official Gazette.

The explanatory memorandum states that Law No. 49 of 2016 was introduced to regulate government procurement and tender procedures within a framework of transparency, equality and equal opportunities among competitors.

It said practical application of some provisions had revealed difficulties and problems affecting the progress of work, prompting amendments intended to facilitate procedures for government entities and those dealing with them, increase flexibility and ensure that tender procedures are implemented quickly, efficiently, transparently and fairly.

The memorandum highlighted the increase in the procurement threshold for KPC and its wholly owned companies, the replacement of purchasing units with purchasing committees, and the authority given to the Supreme Petroleum Council to permit urgent purchases or contracting in emergency circumstances.

It also explained the restructuring of the CAPT Board by removing representatives of state planning affairs, the Public Authority for Manpower and the National Fund for SME Development, while making the representative of the government entity supervising a tender a non-voting member.

The memorandum further emphasized the increase of the government contract limit without agency approval to KD1 million, the prohibition on local agents and commission agents, periodic reassessment of contractor classification, and the new provisions facilitating SME participation.

It also explained the introduction of the 10% SME bid preference, the reorganization of the grievance committee and the requirement for contractors to purchase at least 30% of products listed in the industrial guide.

The memorandum said Article 87 was also amended to require contractors to assign at least 30% of awarded contracting work to local contractors, subject to the provisions and conditions specified in the decree-law.

The decree-law defines oil operations, repeals Article 7, establishes transitional arrangements for tenders announced before its implementation, maintains the current CAPT Board until the end of its term and provides for the new law to take effect three months after publication in the Official Gazette.