Education City Mosque

New Procedures to Support Businesses in Qatar

By Sarah Palmer

The authorities in Qatar have introduced two new important decisions as part of efforts to support businesses and the local economy. Local value system to be used for government tenders In August 2022, The Amir, HH Sheikh Tamim bin Hamad Al Thani ratified Cabinet Resolution No 11 of 2022, amending some provisions of the Executive Regulations of the Law on Regulating Tenders and Auctions No 24 of 2015. Under these amendments, procurement processes in Qatar will now implement the in-country value (ICV or local value) system – companies will now have to add ICV or local value certificates to their financial bids. The ICV certificates will be used as a measurement tool during the awarding of tenders to companies. Now, national products, companies with high local value, and those submitting the least expensive monetary bids after ICV calculation will be given preference during the procurement processes. Micro, small and medium-sized enterprises (MSMEs) will also now receive greater privileges and exemptions with more tenders available to them, according to the Ministry of Finance (MoF). MSMEs, which are defined by the Ministry of Commerce and Industry (MoCI), are now permitted to have limited participation in tenders valued under QAR5 mn. These companies are waived from bid and performance bonds and tender fees, providing their turnover is less than QAR1 mn, and are exempted from half the value of the fee prescribed for classification. The decision to amend the law is to increase the participation of non-oil sectors and the private sector in the local economy. According to Nayef Al Hababi, Director of Government Procurement Regulations Department at the MoF: 'Perhaps one of the most important additions to the regulation is defining the local value of companies, which means the total amount spent by the contractor, supplier or service provider within the country to develop national business, services or human resources to stimulate productivity in the local economy. The local value is determined through a certificate of previously executed contracts and the plan presented by the bidder within his bid.' The amendments also provide for clear guidelines on the timeframe for awarding tenders. Government agencies must organise the offering procedures within 60 working days, and sign the contract within a period not exceeding 20 working days from the date of the contractor submitting the final insurance. The contract must be implemented within 90 working days after its signing, but no later than 180 days. Specifying the duration of the procedures in the amended Executive Regulations aims to speed up procedures, improve the efficiency of tenders, and not incur any losses caused by the length of the previous procedures period. The new system is expected to provide valuable opportunities for local business owners, and attract foreign investors to set up businesses in Qatar.

The ICV system was previously in place for some government tenders in the oil and gas sector. The Ministry of Finance (MoF) launched the TAHFEEZ programme in 2021, aimed at enhancing local services and products in an effort to strengthen Qatar’s private sector and homegrown companies. The programme has three pillars: Qatar In-Country Value (QICV); Environmental, Social and Governance (ESG); and Small and Medium Enterprises (SMEs). The QICV pillar was launched in February 2019 and is itself an extension of QatarEnergy's Tawteen programme. Phase 1, starting in Q1 2022, was available to contractors in collaboration with the Public Works Authority (Ashghal), before extending to other government entities and institutions.