Economic Public Enterprises Exempted from the Procurement Mechanism

февруари 7th, 2013

A New Public Procurement Code

Upon approval by the Council of Ministers end 2012, the new Public Procurement Code was enforced by a Presidential Decree published in the first issue of the 2013 Official Gazette. Regulations on public procurement have just undergone a second lifting in a two-year time period after a previous amendment in 2010.

Two major new provisions reinforce further the level of managerial autonomy granted to public enterprises.

The first one relates to economic public enterprises (EPEs); these are no longer subject to the public procurement mechanism. However, “they are required to develop procurement procedures that match their specificity and are based upon the principles of free access to orders, equal treatment of candidates, and transparency, to be approved by their corporate bodies”.

According to the new code, EPEs “remain subject to external control within the powers vested by the law upon the statutory auditors, the Court of Auditors, and the Inspectorate-General for Finance”.

This provision will allow business leaders to apply in their managerial activities the commercial rules as stipulated by the Code of Commerce. This is an important change having in view the competitive context and the business environment.

The second important novelty relates to foreign bidders. In fact, the new code stipulates that “within the framework of public development policies laid down by the government, international tender documentation should provide for the foreign bidder’s obligation to invest in a partnership when it comes to projects from a list fixed by decision of a national sovereign state authority, an autonomous national entity or the relevant minister for their projects and those of related entities”.

Under the new code, the obligation to invest regardless of the investment project, contained in the former text, is no longer a requirement. This obligation to invest will henceforth be applicable only to projects listed by an administrative authority or a sovereign state institution. These are projects of vital importance to the national economy, mainly in strategic sectors.

The text goes further specifying that the decree’s provisions apply “exclusively to procurements related to the expenditures of public administrations, autonomous national entities, wilayas (district governorates), municipalities, public institutions of administrative nature, and research & development centers”, in addition to “specific public institutions of scientific, technological, cultural, professional, technical, industrial, and commercial nature when these are in charge with carrying out an operation funded on the basis of a preliminary or final state competition”.

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