Font Size

- Aa +

Sat 26 Sep 2009 04:00 AM

Font Size

- Aa +

Procurement in Abu Dhabi

Scott Aitken discusses the new laws of procurement procedures in Abu Dhabi & their effects.

Procurement in Abu Dhabi

Scott Aitken discusses the new laws of procurement procedures in Abu Dhabi and how they affect all parties involved.

Enhancements to Abu Dhabi's legislation on public tendering processes commenced last year with the passing of Law No (6) of 2008, procurements, tenders, bids and warehouses for Abu Dhabi.

In part, the aims of the new law are to:

• decentralise procurement processes of government departments

• develop balanced and modern management methods particularly in the delegation of authorities to the private sector and

• simplify, facilitate and accelerate the execution of procurement stages whilst retaining the highest levels of transparency, fairness and value for money.

To achieve these aims, the Abu Dhabi government intends to publish new regulations creating a code of best practice. These regulations will set out procedures, which government departments will be required to follow when contracting with the private sector for the provision of services, work contracts and transportation contracts.

Modern management methodologies

While we wait for the new regulations, it may be helpful to consider procurement processes elsewhere, including:

• the relevant arm of a government identifies a particular procurement need ("the Project"). Subsequently, there is an internal administrative sign-off and commitment from the government to procure the carrying out of that project.

• the government determines the criteria by which tenders will be assessed - for example, costs or financial return, design, time table for delivery, reputation and reliability. Each such criterion will be weighed depending on its importance to the project. The government will also decide the stages of the tendering process by assessing the size and significance of the project and the likely level of interest from the private sector. It is common to include the following steps:

i) calls for expressions of interest

ii) request for proposals

iii) submissions of best and final offers

All of the matters described above are then set out in a written Evaluation and Assessment Plan ("Assessment Plan").

• supplementing the Assessment Plan is the Probity Plan, which is drafted to provide guidelines to government representatives participating in the procurement process. It is common for a Probity Auditor (usually an independent person) to be appointed as a "gatekeeper" to oversee that process.

• to evaluate and assess the tender responses on behalf of a government, a committee of decision makers from across a variety of disciplines is formed. Often the committee will have an independent chairperson. To maintain a level of impartiality and avoid undue influence, the identities of members are not disclosed to tenderers.

• the Assessment Plan and the Probity Plan are intended to guide the committee in its work and achieve, for the stakeholders, the highest levels of transparency, fairness and value for money. For example, the committee should make decisions within the highest standards of behaviour and avoid conflicts of interest and taking improper advantage.

• often, the Assessment Plan and the Probity Plan are supplemented by a government written code of practice. Such a code would provide for policies and procedures to achieve the overriding objective that government bodies act with integrity, fairness, transparency and probity.

The new regulations may accelerate the Abu Dhabi tendering process if these policies provide for variations depending on the nature and cost (and other risk factors) of each project. The lesser the significance and lower the risk profile of a particular project, then fewer of the requirements described above may be imposed. However, what will remain are the overriding aims of:

• ensuring transparency of tendering for work with government departments

• tenderers will be treated fairly

• the successful tenderer is selected purely on merit on the basis of providing the best value for money.

Aitken is a partner at Abu Dhabi's Clyde & Co office. The focus of his practise is providing property development and legal structuring advice to owners, operators and financiers regarding retail, commercial, industrial and international hotel developments. Prior to coming to the UAE, Aitken was involved in a number of transactions for the Sydney Olympic Park Authority. He has also acted for a number of leading developers including Stockland and Multiplex.

The opinions expressed in this column are of the author and not of the publisher.

For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.