Source: https://ti-defence.org/gdi/countries/qatar/?risk=procurement&single-question=7214
Timestamp: 2020-02-28 11:37:59
Document Index: 144641155

Matched Legal Cases: ['Art. 946', 'Art. 14', 'Art. 80', 'Art. 209', 'Art. 214', 'Art. 164', 'Art. 70']

Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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68a. Complaints mechanisms
Companies have no opportunity to complain about perceived malpractice in procurement.
In the case of no formal mechanisms, informal communication channels are used by companies to complain about perceived malpractice in procurement.
Formal mechanisms are in place to allow companies to complain about perceived malpractice in procurement. This may include both a court process and an internal complaints mechanism.
Although most of the tenders are single sourced, there are rare cases when bidders have needed to complain. To do so, they use informal channels to speak to the commanders, or they write a complaint and send it to the relevant unit. There are no set mechanisms defined in law, but rather appear as part of the contract. [1,2]
[1] Interview, Admin Officer, Qatari armed forces, Doha, May 13-14, 2019.
[2] Interview, Financial Officer, Qatari MoD, Doha, May 15-16, 2019.
68b. Effectiveness and Accessibility
The complaints mechanisms available to companies are costly and inefficient, and are thus rarely used.
The complaints mechanisms available to companies may be inefficient or expensive, but are occasionally used regardless.
The complaints mechanisms available to companies are efficient and reasonably priced, and are regularly used.
As Qatar is a small country, with a small number of soldiers and military personnel, there are rare cases when a supplier needs to complain. Therefore, the mechanism to do so is written as part of the contract. This mechanism is not regularly used but is partially efficient as it is written into the contract.
68c. Retaliation
Companies believe that if they complain they will be unfairly disadvantaged or debarred from future procurements.
Companies rarely complain because they believe that they will be discriminated in future procurement cycles.
For genuine (non-malicious) complaints, companies believe that they will not be discriminated against in future procurements.
Companies prefer not to complain; they normally use informal channels with commanders and officials to solve problems such as collusion and mis-practices, so that they may avoid future disqualifications. This is the norm in Qatari defence procurement. [1,2]
There is a formal complaint mechanism in place. According to Art. 946 of the Code of Civil and Administrative Procedure, the Administrative Court can be called upon by request in case of breach of the obligations of advertising and competitive bidding, which is subject to the award of government contracts and public procurement. The persons authorized to act are those who have an interest in concluding the contract and who are likely to be harmed by the breach, as well as the state representative in the province where the contract is concluded, or to be concluded by the local authority or a local public institution (1), (2). The 2016 law on Public Procurement does not regulate any complaints (3).
The World Bank’s Benchmarking Public Procurement Report of 2017 provides information on the effectiveness of complaints. According to the World Bank, whether a complaint can be filed effectively depends on whether the first tier review body is the same as the second-tier review body. For example, if the company must complain in front of the procuring entity first, it should be ensured that it can appeal to an independent body or a court (1). This is formally the case in Algeria. In the pre-award stage, complaints are filed before the Administrative Court and can be repealed to the High Administrative Court. In the post-award stage, bidders can dispute the provisional award of a contract at the Tenders Board. The decision of the Tender Board can be appealed at the Administrative Court (1). However, in Algeria’s case, the judiciary lacks independence, which reduces effectiveness (2), (3). The World Bank report also notes that the average time to issue a decision takes 150 days in front of a court. In Algeria, it is 60 days which suggests efficiency. However, the report also notes that it often takes longer in reality than legal requirements stipulate (1).
No cases could be found during the research which would allow assessment of this question. Due to the high politicisation of the Algerian court system (1), (2), it seems likely that companies would be discriminated against if they complained, also see the country’s last assessment (4).
The World Bank Public Procurement Report provides some evidence that it is difficult for companies to challenge government decisions. In the report, it notes that it is very difficult to challenge an award procedure before its term. In Algeria, except in cases limited to failure of the obligation of advertising and competitive bidding, it is not common to challenge the award procedure before the publication of the result and the provisional award of the contract (3).
Complaints procedures during procurement and execution are laid out in the 2016 Public Procurement Law, but lack clarity. Chapter IV lays out procedures of administrative impugnation and judicial process (Art. 14-21) and Art. 80 hierarchical appeal procedures on decisions of assessment committees (2). Contractors have the right to terminate a contract when project modifications by the contracting entity represent a reduction of more than 1/5 of the initial project value (Art. 209 – Right to terminate by contractor) and have a right to indemnity (Art. 214) (2). The complaints procedures remain unclear in the case of arms and military procurement contracts that are exempted from the law (1).
Complaints mechanisms do exist in the public procurement law, but there is little information on how they work, what their costs are, and whether they have been used. However, given Angola’s heavy bureaucracy, weak efficiency and accountability of state institutions, the costs are presumably high and the process very lengthy. Generally, Angola’s judiciary lacks independence from political power and has been notoriously misused to silence and prosecute dissidents, investigative journalists and human rights activists (1), (2), (3), (4), (5) (6).
Furthermore, local and international reporting on the 15+2 trial shows that effectiveness and accessibility are stifled (7), (8).
Though it appears likely that companies may fear discrimination in retaliation for complaints, there is no evidence to prove this. It is also the case that companies may be deterred from using complaints mechanisms because they are perceived as costly and inefficient, not necessarily because managers fear retaliation (1).
Article 6 of Law N° 039 (2016) does not apply to contracts for works, supplies and services and public service delegations, where they relate to the needs of defence and national security that require secrecy or for which protection essential interests of the State is incompatible with publicity measures. A decree issued by the Council of Ministers specifies the nature and modalities acquisition of the goods and services concerned by this exclusion (1), (2).
According to Article 38 of Law N° 039 (2016) “bidders and contractors can introduce their complaints before the contracting authority against tenders documents and the decisions made during the procurement process.” Article 39 of the above law allows bidders and contractors to carry out their complaints to a non-court body” as well. The other option opened to bidders and contractors lies under Article 43, which states that “in case the non-court body did not issue a satisfactory decision, the one who thinks so, can take the case to whether the appropriate administrative court or to an arbitration court”. Indeed, complaints and other procurement issues not covered by Law N° 039, are taken care of by Decree N° 0049 as usual. Therefore, procurement complains mechanisms are available. But, all the issue remains how to use them without fear. Therefore, companies get no opportunity to complain about perceived malpractices in procurement (1), (2).
For the sake of not being blacklisted, companies rarely use the available complain mechanisms. Often times complains from bidding/ contracting companies do not succeed, as corruption is widespread in all sectors of the economy, including the public sector. According to United States Department of State (2017), “the law provides criminal penalties for corruption by officials, but the government did not implement the law effectively, and officials often engaged in corrupt practices with impunity.” Therefore, because of the high level of corruption, the complain mechanisms available for bidding / contracting companies usually do not succeed, and is often time-consuming as well (1), (2), (3).
Corruption is widespread in Burkina Faso, and according to the United States Department of State (2017), “local NGOs criticized what they called the overwhelming corruption of senior civil servants” (1). Obviously, this is not in favour of complaining companies, who fear not being approved for future contracts. It has often been reported that stakeholders involved in public procurement are corrupted, and that procurement decision often depends on the allocation of bribes (1). According to the 2015 Burkina Faso Government/ Defence Anti-Corruption Index, “Burkina Faso is very poor on whistleblower legislation, which poses hindrance to the fight against corruption” (2). During the interview session with the Executive Secretary of the REN-LAC, the Interviewee said that its organization was once approached by a whistleblower, who explained that he made a bid for works in the defence ministry, and did not get approved because the procurement process was corrupted” (3).
The Public Procurement Code 2018 clearly lays out formal mechanisms to allow companies to complain about perceived malpractice in procurement. These mechanisms include an internal complaints and appeal system and the ability to launch a complaint with the Public Procurement Authority (Articles 170-172) [1]. It should be noted, however, that defence and security procurement is exempt from the provisions of the Procurement Code (Articles 4 and 71) [1], and there is no known separate complaints mechanism covering defence and security procurement.
No known dispute mechanism exists for defence and security procurement. Therefore, this indicator has been marked Not Applicable.
Both Decree No. 2009-260 on the functioning of the ANRMP and Decree No. 2009-259 (Code of Public Procurement) provide for complaint mechanisms for bidding companies. As per Decree No. 2009-260 of 6 August 2009 on the organization and operations of the ANRMP (Portant Organisation et Fonctionnement de l’ANRMP), the ANRMP is tasked with settling and following up on disputes that arise in public procurement (Article 3). In addition, there is a specialized unit (cellule) within the ANRMP that is tasked with recourse and sanctions (Cellule Recours et Sanctions, CRS), which could serve as a mechanism for companies to complain about perceived malpractice (Article 12) (1).
Decree No. 2009-259, the Code of Procurement of 06 August 2009 (Portant Code des marchés publics) also provides bidding companies with several methods through which to lodge complaints about a public procurement process (2).
Ultimately, bidding companies also have recourse to the sub-regional OHADA (Organization for the Harmonization of Business Law in Africa) if the ANRMP Recourse and Sanctions Unit fails to rule on cases of perceived malpractice. The OHADA regulations allow companies to take the case to a national court of law.
Articles referenced in the above paragraphs from the Code of Public Procurement states:
Article 3: The Regulatory Authority is tasked with public procurement and public service, including: (1)
– settling disputes arising from the award and execution of public contracts and public service delegations which are the subject of actions brought before it by participants in the public procurement procedure;
– following up on decisions on the settlement of disputes in public procurement;
Article 12: The Regulatory Authority is structured in three (3) specialized units: (1)
– the Studies and Policy Definition Unit
– the Recourse and Sanctions Unit
– the Independent Audits Unit
Article 16: The Recourse and Sanctions Unit is tasked with, among others: (1)
– issuing decisions on disputes arising from the awarding, execution, regulation, control and regulation of public contracts and public service agreements under the conditions referred to in Article 167 of the rules of the public markets;
– imposing sanctions for breach of public procurement regulations and public service agreements against candidates, tenderers, recipients or holders of public contracts or public service agreements, in accordance with the terms and conditions laid down in Articles 184 to 186 of the Code des Marches Publics;
– referring any irregularities found in any public procurement procedure or public service agreement to any contracting authority and, where appropriate, inform the competent administrative or judicial institution.
There are recent (2015-2016) cases in which the ANRMP’s Recourse and Sanctions Unit issued rulings concerning perceived malpractice in the procurement process. However, there was no information on how expensive this type of complaint mechanism is for bidding companies. There is recent (2015-2016) evidence on the ANRMP website attesting to the effectiveness of the ANRMP’s Recourse and Sanctions Unit (Cellule Recours et Sanctions, CRS). However, none of the 10 rulings by the ANRMP Unit involved a public tender with the Ministry of Defence. Due to the confidentiality of defence procurement, as per Article 8 of the 2009 Code of Public Procurement, none of the rulings by the CRS on the ANRMP website involves public tenders with the Ministry of Defence (1). For example, Ruling No. 043/2015/ANRMP/CRS of December 29, 2015, illustrates how a bidding company (KINAN) submitted its bid for a public tender set up by a state agency and later accused the contracting agency of irregularities in the procurement process regarding the supply and installation of furniture, computer equipment, office equipment and various equipment for a professional training centre (Lycée Odienné Professional). Details of the ruling can be downloaded as a pdf on the ANRMP website, along with 9 other rulings (2). Given the recent cases of CRS rulings uploaded to the ANRMP website, it can be said that the mechanism is moderately effective for public procurement. Still, none of the CRS rulings concerned defence contracts.
The activities of the ANRMP’s Recourse and Sanctions Unit (CRS), which has emboldened companies in Côte d’Ivoire to use it as a vehicle of complaints about cases of perceived malpractice in public procurement. Although the information is dated (13 March 2013), a text written by an Ivorian lawyer (Vincent Bile) was uploaded to the ANRMP website in which he addressed the fact that thanks to the 2009 Code of Public Procurement and Decree Decree No. 2009-260on the organization and operations of the ANRMP, a greater number of companies involved in public procurement in Côte d’Ivoire have gone through the ANRMP’s Recourse and Sanctions Unit (CRS) to denounce cases of malpractice. See the excerpt below:
“If litigation related to public tenders in Côte d’Ivoire does not yet know yet the same frenzy as in Senegal… Ivorian companies that previously did not dare complain for fear of reprisals, are coming out more and more of their torpor to lodge formal complaints with the Recourse and Sanctions Unit (CRS) of the ANRMP. Of only three (3) decisions rendered in 2010 and fourteen (14) decisions in 2011, the CRS has rendered thirty-four (34) decisions in 2012, not to mention that many disputes were dismissed in the context of the preliminary appeals filed with the courts” (1).
An article in Côte d’Ivoire Economie on February 25, 2014, described the change in mentality among companies bidding for public tenders since the creation of the ANRMP in 2009. The author, Germain Tanoh, stated that that they are willing to lodge complaints via the CRS that can lead to the Administrative Chamber of the Supreme Court to settle disputes arising from public procurement. Previously, there was no unit like the CRS that was able to forward cases to the national courts (2). The article states:
“From now on, the regulations in the ANRMP provide companies vying for a public tender in the Ivorian system of the public procurement with the tools to bypass societal evils (corruption, favoritism, fraud, abuse of position, collusion), not only to assert their right in the event of a decision that grieves them, but also to denounce the unethical behavior of the actors involved in public procurement” (2).
Analysts covering the CRS cases describe scenario before and after in which companies have lost their fear of retaliation since the ANRMP was set up.
According to Article 5 of the Public Authorities’ Contracts law, there is a special unit in the Ministry of Finance entrusted with receiving complaints regarding violations or breaches of procurement contracts (1). Article 91 gives the contractor the right to go to court or resort to arbitration given the parties agree to that in the contract if they allege that the public authority has breached one or more of its obligations (1). The public procurement portal (2) also has a hotline and a complaints section (for subscribed users). As most of the suppliers are closed contract and single-sourced, complaints are more informal, as it is not expensive and can be managed informally too (3), (4).
Options for contractors to complain are through either regular judiciary arbitration or the less formal complaints mechanisms. Court cases in Egypt are usually slow, expensive and inefficient (1). Arbitration, even if more effective and faster, is also expensive. Consequently, informal channels are used to complain and solve any problems (2), (3). However, there is no evidence that these less formal mechanisms for complaining are effective and impartial.
Given the current political climate characterized by military authoritarianism (1), it is very likely that in procurement for the defence sector, companies fear retaliation if they file complaints or sue institutions in the defence sector.
Formal mechanisms are in place for companies that feel cheated to seek compensation (1), (2). There are formal dispute mechanisms set by the PPA, Section 79 of the Public Procurement Act (2003) provides a review process, with internal disputes as a first option, followed by the aforementioned complaints panel, and finally legal action as a last resort (3).
The complaints mechanism looks easily accessible and effective. However, what is on paper obscures a very difficult path or avenue to pursue. Effectiveness of these mechanisms is severely hampered by the nature of defence contractors seeking to ensure continued business with the GAF. An informal status of persona non grata for any complaining company appears to be the norm. (1), (2), (3), (4).
Companies believe that they will be unfairly targeted from future procurement and therefore they often resort to bribery to win contracts and if they lose any bid, they may try again (1), (2), (3).
In relation to defence procurement there are only two available legislations relevant to armed forces contracts and purchases. Military Supplies Law No. 3 of the year 1995, sets out some procedures concerning the defence procurement cycle. General Procurement Law (32) of 1993, and Military Works Law No. 4 of the year 1995, set out specific procedures for tendering in relation to construction work required by the armed forces [1, 2,4]. There are no other policies or legislations that apply to defence, and no further information is provided through the official governmental webpage about complaints regarding malpractice in defence procurement. There is no evidence that complaints mechanisms exist for companies to report defence procurement malpractice, despite the fact that such mechanisms exist for other governmental institutions [3].
The government asserts that any dissatisfied bidder can complain to the Directorate of Defence Procurement, as well as to the chairman joint chiefs of staff and even to the prime minister or anti corruption bureau, and that complaints will be considered thoroughly and treated impartially [5]. However, there is no evidence that this mechanism is formally announced or included in contract information, or even known to bidders.
This sub-indicator has been marked as Not Applicable because there are no complaints mechanisms in Jordan that allow companies to complain about perceived malpractice in defence procurement or in civil procurement law, which is used in many cases within defence procurement procedures [1,2].
This sub-indicator has been marked as Not Applicable because there are no known complaints mechanisms in place for companies to complain, and there is no evidence or information available to enable us to assess companies’ trust that they will not be discriminated against in future procurement, if they complain [1,2].
There are formal procedures in place for companies to complain, which include a court process and an internal complaint mechanism, but they are part of the PTA law, which does not apply to the purchase of “defence materials,” as previously discussed in the answer to question Q64 (1)
This means that we are only sure that these options exist for minor deals the security agencies make for civilian services.
Auditors say they are told that there are mechanisms in place but they have no details on the matter and the media has none as well (2, 3 and 4).
Activists and analyst who track the military dealings of the US, Kuwait’s main supplier, say that they have no heard of any formal complaints being issued and that such disputes are likely to be resolved through informal channels (2, 3, 4, 5 and 6.)
This sub-indicator has been marked Not Applicable because there is no reliable information available to the public or auditors about the cost of complaint mechanisms. However, a prominent lawyer in Kuwait said they are likely to cost over several hundred thousand Kuwaiti dinars and take years to settle because there is a backlog in all courts. The Justice Ministry and the security agencies did not respond to questions about this matter (1).
This sub-indicator has been marked Not Applicable because there are no available facts on the matter since the only people with access to them are in the security agencies. But analysts and activists believe that there would be retaliation for any complaint, regardless of how valid it may be, given that the security agencies have already demonstrated a lack of professionalism (1, 2, 3, 4 and 5). However, there is no concrete evidence to support this belief.
In case of dispute, the tender has to present it to the LAF command or responsible administration within 30 days from the moment the issue arose (1), (2). The command or responsible entity has two months to issue its decision, although it is not a requirement (1), (2).
According to Decrees no. 11573 and 11574, the complaints mechanisms are accessible to the companies. However, the decree does not refer to the cost (1), (2). The effectiveness of the mechanism is unclear due to a lack of published reports (3).
This sub-indicator has not been scored due to a lack of evidence. The frequency of company complaints and the LAF’s discriminatory decisions are unclear due to a lack of information (1).
Complaints mechanisms exist through the Règlement des Différends (CRD).¹ Complaints must be submitted within two days of the decision being notified to the relevant parties. Article 122 focuses on how the committee can conduct research into a complaint and propose amicable solutions to resolve the dispute/complaint.¹ The Committee is required to issue its verdict within 15 days of being called upon to examine a contested award of a contract, indicating that its research is unlikely to be especially extensive or thorough.¹ But the mechanism can offer a quick and easy way of resolving minor disputes.
Article 123 notes that after having exhausted non-judicial measures, i.e. the CRD, complainants can submit their complaint to a tribunal.
Meanwhile, article 124 states that complainants can seek recourse to judicial arbitration in line with international OHADA standards, but only in cases where an arbitration clause expressly conforms with the necessary specifications.¹
Furthermore, Mali’s online portal for public contracts contains a mechanism to make anonymous denunciations regarding any suspicions of irregularities during the course of a procurement process.² This is a quick, easy and free way of raising complaints with the ARMDS, but there is no evidence to indicate how effective this mechanism is or how widely it is used.²
The procurement code outlines the mechanisms for complaints under the Règlement des Différends (CRD).¹ Furthermore, Mali’s online portal for public contracts contains a mechanism to make anonymous denunciations regarding any suspicions of irregularities during the course of a procurement process.² This is a quick, easy and free way of raising complaints with the ARMDS, but there is no evidence to indicate how effective this mechanism is or how widely it is used.²
However, there is strong evidence to suggest that many companies are not happy with the integrity or the efficiency of the judiciary in commercial matters.
The US Department of State notes that numerous business complaints are awaiting an outcome in the courts because the dispute resolution process can take multiple years. It asserts that “judges and prosecutors’ careers depend on the Ministry of Justice, and hence their independence is compromised. The judicial system is infested by corruption leading to flawed decisions”.³
Mali is a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention). Mali has also signed and ratified the Convention of the Recognition and Enforcement of Foreign Arbitrage Awards (1958 New York Convention).³ The country is also a member of the African Organisation for the Harmonisation of Business Law (OHADA), which has a provision allowing litigation between foreign companies and domestic companies or with the government to be tried in a court outside of Mali. These provisions allow for companies to resort to international arbitration, which is expensive, but provides an alternative mechanism for firms that do not have confidence in the Malian judicial system. For instance, an American company contracted to complete an airport renovation filed a case in 2013 against the Government of Mali at the Paris Arbitration Court regarding an alleged breach of contract.³
The US Department of State cites other cases that have left companies feeling unjustly treated. In January 2017, the Malian state-owned utility company cancelled a contract with an American company relating to an electricity generation project “with neither any justification nor the authorisation of the Malian Public Procurement Regulatory Office”.³
Meanwhile, in 2015, an American company felt that its bid for an engineering oversight project regarding the renovation of an airport was unjustly disqualified. ARMDS reportedly rejected the US company’s complaint, stating the firm did not wait a requisite 72 hours before contacting the authority. “The company elevated the complaint to the Administrative Chamber of the Malian Supreme Court, where the case now rests indefinitely” according to the US Department of State.³
Finally, another US company “has spent three years trying to negotiate a power purchasing agreement with the GOM regarding a 15 MW hydroelectric plant in Markala”.³ When the government changed in 2013, the new minister responsible for the project requested a new impact study. The Malian government has since reissued the tender which the US company had believed it had already won.³
The GAN Business Anti-corruption portal states that there is a “very high risk of corruption” in Mali’s judicial system, “especially through bribery and influence peddling in courts”.⁴ It adds that:
“Businesses report that irregular payments or bribes to obtain favourable decisions are commonly exchanged . The judiciary lacks resources and professional training and operates slowly and inefficiently. Judges are sometimes absent from their assigned areas for as long as months”.⁴
The assessor found no evidence to indicate whether companies are reluctant to use these mechanisms for fear of unfavourable treatment in future. However, there is strong evidence to suggest that many companies are not happy with the integrity or the efficiency of the judiciary in commercial matters.
The US Department of State notes that numerous business complaints are awaiting an outcome in the courts because the dispute resolution process can take multiple years. It asserts that “judges and prosecutors’ careers depend on the Ministry of Justice, and hence their independence is compromised. The judicial system is infested by corruption leading to flawed decisions”.¹
Mali is a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention). Mali has also signed and ratified the Convention of the Recognition and Enforcement of Foreign Arbitrage Awards (1958 New York Convention). The country is also a member of the African Organisation for the Harmonisation of Business Law (OHADA), which has a provision allowing litigation between foreign companies and domestic companies or with the government to be tried in a court outside of Mali. These provisions allow for companies to resort to international arbitration, which is expensive, but provides an alternative mechanism for firms that do not have confidence in the Malian judicial system. For instance, an American company contracted to complete an airport renovation filed a case in 2013 against the Government of Mali at the Paris Arbitration Court regarding an alleged breach of contract.¹
The US Department of State cites other cases that have left companies feeling unjustly treated. In January 2017, the Malian state-owned utility company cancelled a contract with an American company relating to an electricity generation project “with neither any justification nor the authorisation of the Malian Public Procurement Regulatory Office”.¹
Meanwhile, in 2015, an American company felt that its bid for an engineering oversight project regarding the renovation of an airport was unjustly disqualified. ARMDS reportedly rejected the US company’s complaint, stating the firm did not wait a requisite 72 hours before contacting the authority. “The company elevated the complaint to the Administrative Chamber of the Malian Supreme Court, where the case now rests indefinitely” according to the US Department of State.¹
Finally, another US company “has spent three years trying to negotiate a power purchasing agreement with the GOM regarding a 15 MW hydroelectric plant in Markala”.¹ When the government changed in 2013, the new minister responsible for the project requested a new impact study. The Malian government has since reissued the tender which the US company had believed it had already won.¹
The GAN Business Anti-corruption portal states that there is a “very high risk of corruption” in Mali’s judicial system, “especially through bribery and influence peddling in courts”.² It adds that: “Businesses report that irregular payments or bribes to obtain favourable decisions are commonly exchanged. The judiciary lacks resources and professional training and operates slowly and inefficiently. Judges are sometimes absent from their assigned areas for as long as months”.²
The 2013 version of the Code of Public Procurement Contracts states the following:(1)
⁃ Articles 45, 83 and 111: a call for tenders or a competition or an architectural consultation can be cancelled if a candidate complains under certain conditions listed under article 169.
There is no evidence that the military sector is explicitly exempt from these rules. Companies therefore have an opportunity to complain about perceived malpractice in procurement. However the revised version of the Code of Public Procurement Contracts does not provide sufficient details about the complaint mechanisms.
No evidence of other regulations or laws detailing the complaint mechanisms were found (2)(3).
There are no details provided on how, or through what sort of channels, the candidate can complain. Based on these elements, it is unclear whether the complaint mechanisms are effectively granted in theory beyond what the 2013 Code of Public Procurement Contracts provides. This lack of detail and transparency increases the risk of corruption despite the legal framework.
The lack of sufficient details about the formal complaint mechanisms suggests that this cannot be scored.
There has been no report of companies effectively complaining about perceived malpractices in procurement in the local or international press (1)(2)(3)(4)(5)(6)(7)(8)(9).
Both interviewees alleged that local and foreign candidates seemingly victims of perceived malpractices in procurement prefer not to complain to official bodies for fear of retaliation for future contracts, related or not to the contracts they bid for (10)(11).This concerned both the public and the private sector, and is not limited to the military sector. However, this information could not be independently verified.
The 2016 Code on Public Procurement provides bidders with non-jurisdictional and jurisdictional mechanisms to file complaints about perceived malpractices or infringements (Art. 164-169) (1). Bidders can complain before the Settlement Committee of the Regulatory Agency on Public Procurement. If these non-jurisdictional mechanisms do not lead to an agreement, cases can be brought to national court under regulations provided by the Organisation for the Harmonisation of Business Law in Africa (OHADA). However, the provisions in Decree No. 2016-641/PRN/PM can only partially be used as a basis for scoring this sub-indicator because contracts for defence and security are not within its scope of application.
Decree No. 2013/570/PRN/PM does allow for a formal complaints mechanism that results in a temporary suspension of the attribution decision. The 2013 Code regarding defence and security procurement is more restrictive regarding the complaints process. According to Art. 70 of the 2013 Decree, a candidate who feels they were unfairly disadvantaged during the procurement process can lodge a complaint against those responsible.
According to Article 70:
“Any candidate who believes they are being unfairly disadvantaged can file a written appeal with the person responsible for procurement. The appeal can relate to the decision to award or to not award the contract on the basis of the capacities and guarantees required and of the terms of the procurement process.
It must invoke a violation of the provisions of this decree.
The appeal must be made within the three working days following notification of the contract award decision, failing which it shall be inadmissible. The purpose of the appeal is to suspend the procurement process until the contracting authority has made its final decision” (2).
(Consultant translation French to English)
The assessor did not find any evidence that there were companies that have lodged complaints about being unfairly disadvantaged or debarred from future procurements. Nor could the assessor find any evidence to suggest that there had been unfair treatment (1,2). A lack of evidence of cases may mean that procedures are not being followed.
Neither the 2016 Procurement Code (1) nor the 2013 Decree (2) refers to additional protection mechanisms for complaining parties. It is plausible to assume that companies may believe that if they complain they will be unfairly disadvantaged or debarred from future procurements.
Given that the complaints mechanism under the PPA 2007 does not apply to the defence sector it would appear that there is no formal legal mechanism for contractors to make a complaint if there is any irregularity in the procurement process. Officially, complaints can always be made to a senior official such as an accounting officer under the PPA 2007, but this does not guarantee the same effectiveness and independence as a system supported by law. Presumably, an application to a High Court may exist if remedies under the PPA 2007 are ineffective. It is also possible for aggrieved actors to raise the matter with the National Assembly. There is a 9-step complaint process under the Act which is as follows “Where any Contractor/Consultant/MDA is not pleased with the outcome of any procurement proceedings either because of a perceived breach or omission of the provisions of the PPA 2007, he shall:
Step 1: Make a formal and written complaint to the Accounting Officer of the procuring/disposing entity within fifteen (15) working days from when he became aware of the breach or omission.
Step 2: The Accounting Officer shall review the complaint and communicate his decision on the matter to the complainant within fifteen (15) working days. He shall give reasons for his decision and the corrective measures to be taken where necessary.
Step 3: If the Accounting Officer fails to make a decision within the given period or the complainant is not satisfied with his decision, the Act allows the complainant to forward his complaint to the Bureau within ten (10) working days from the date that decision was communicated to him.
Step 4: Upon receiving the complaint, the Bureau shall:
(a) Notify the procuring entity of the complaint and
(b) Suspend any further action by the procuring or disposing entity until the matter is settled
Step 5: Unless the Bureau dismisses the complaint, it shall further
(a) Prohibit the procuring/disposing entity from taking further action,
(b) Nullify part or all of the unlawful act or decision of the procuring or disposing entity,
(c) Declare or make known the rules and principles governing the subject matter of the complaint, and
(d) Reverse any improper decision by the procuring or disposing entity or substitute its own decision for the improper one.
Step 6: The Bureau shall notify all interested bidders of the complaint before taking any decision on the matter and may consider representations from the bidders and the respective procuring or disposing entity.
Step 7: The Bureau shall make its own decision within twenty one (21) working days after receiving the complaint and shall give the reasons for its decision and the remedies granted if any.
Step 8: If the Bureau fails to make its decision within the given time or if the complainant is not satisfied with the Bureau’s decision, the complainant may appeal to the Federal High Court within 30 days after receipt of the Bureau’s decision or the expiration of the time specified for the Bureau to make a decision.
Step 9: The decision of the Federal High Court shall be final on the matter and no further appeals shall lie. (1)
Although a structured complaints procedure is included under the PPA 2007 to the courts, it is rarely used as litigation is costly and may result in ‘blacklisting’ by the officials involved. Under Section 54 PPA 2007, a disgruntled bidder may lay a complaint with the accounting officer of the procuring entity. This can be accelerated through a complaint to the Bureau for Public Procurement and if it needs to be further escalated a claim may be issued in the law courts under the provisions of the Act. However, any company using the complaints process may reasonably have concerns about possible backlash from implicated senior officials which may affect any future bids (1).
The dispute resolution system is not being used for a variety of reasons. Fear of retaliation in the form of the loss of future business and others, and the fact that Nigeria does not possess a strong culture of complaining or litigation generally, contractors instead prefer to accept their losses in the hope that the next time the procurement process will turn out in their favour (1). The strict time limits within which a complaint must be laid may have a negative impact on the willingness of people to use the complaint procedure. The fact that the complaint must first be made to the accounting officer within the procuring entity may deter others from using the complaint procedure (1).
It has become apparent that the complaints mechanisms for companies to complain about malpractice in procurement exists only in informal communication. According to sources, the companies can complain based on the contract articles that state the complain mechanism and collision between the government and the company (1), (2).
This indicator is marked Not Applicable because there are no formal complaint mechanisms. It is all based either on informal communication or contract-based articles; there is no way to know how costly it can be (1), (2).
This indicator is marked Not Applicable because there are no formal complaint mechanisms.
Companies rarely complain as they usually settle conflicts in a gentleman’s agreement with the officers or through informal communication channels.
According to Article 56 of General Supplies and Procurement Law (2014), there are formal mechanisms in place to allow companies to complain about perceived malpractice in procurement (1). However, the mechanism does not include a court process. This means that complaints should be handled entirely by the respective security agencies or the MoF (2).
The complaints mechanisms available to companies are costly and inefficient and are thus rarely used. This includes the suspension of financial payments and sometimes not allowing the company to compete in future bidding rounds (1).
Companies believe that if they complain they will be excluded from applying for other bids or be disadvantaged from future business. Therefore many use informal channels to complain (1).
In the past, companies could complain to the Board of Grievances (BOG), Saudi Arabia’s principal and highest administrative tribunal. The BOG had jurisdiction over contract-related disputes where a government entity or an independent public corporate entity is a party (1). In 2017, Saudi authorities established specialized commercial courts and related appeal centres throughout Saudi cities to produce a stronger legal framework for settling disputes (2). These courts are independent institutions directly under the Saudi Ministry of Justice (MoJ) rather than a branch of the BOG and began operating in September 2018 (3). According to the MoJ, the commercial courts issued more than 1,181 judgments in their second month of operation (4) No further details were released on the nature of these cases, and it is unclear whether any of them were related to procurement or other malpractice in defence contracts. However, the courts have taken over the functions of the BOG, which in the past handled disputes regarding defence contracts. Based on anecdotal evidence from the websites of law firms operating in Saudi Arabia, foreign defence contractors have in the past pursued complaints through the BOG, though there is no reference to corruption complaints, but rather to issues such as employment disputes and corporate governance practices (5), (6). According to our sources, complaints are usually solved informally and through personal relations. Defence procurement and purchases are confidential and do not go through civil courts or bodies such as the BOG. In addition to that, it is advised and known that personal and informal communications are much better to solve such malpractice, for fear of exclusion from future activities (7), (8).
Additionally, in May 2016, the Saudi government launched the Saudi Center for Commercial Arbitration (SCCA), a body tasked with administering arbitration procedures in civil and commercial disputes where parties agree to refer their disputes to SCCA arbitration. The SCCA’s decisions are enforceable under both domestic arbitration laws and international treaties such as the 1958 New York Convention (9).
Sources report, that the complaint mechanism is not only costly in time and efforts, but it can lead to future exclusion, which means huge financial costs. Therefore, bidders and suppliers refer to informal mechanisms and informal relations with commanders and officials to solve such conflicts (1), (2). Historically, dispute resolution mechanisms in Saudi Arabia have been criticized as being plagued by uncertainty and inefficiency. Cases would typically take as long as two to three years, and sometimes even longer to finish. Furthermore, commercial courts under the BOG have traditionally asserted jurisdiction over contract disputes in Saudi Arabia, applying Saudi law regardless of whether the parties involved entered into arbitral or side agreements subject to foreign law (3). In some cases, the courts have refused to enforce arbitral awards on widely-interpreted public policy grounds.
Additionally, arbitration is prohibited in disputes involving Saudi government bodies and private contractors, unless approval is obtained by the king, or arbitration as provided for under a special provision of the law. This is a holdover from a landmark case during the 1960s in which an arbitral tribunal rendered an award against the Saudi Arabian government in favour of the Arabian American Oil Co (ARAMCO), which was then majority US-owned (4).
Recently, it appears the government has made efforts to encourage arbitration and streamline the dispute resolution process. This includes creating the above mentioned commercial courts for dispute resolution in October 2017, as well as the SCCA in May 2016. It remains to be seen whether these developments, particularly the establishment of the commercial courts, will lead to meaningful change and improvements in the dispute resolution process for companies operating in Saudi Arabia.
According to sources, companies and suppliers fear exclusions when using formal mechanisms, as there are no policies to protect them from arbitrary actions. Therefore, they rarely if ever complain and refer to informal relationships to solve conflicts (1). According to a Gulf affairs expert, “there are mechanisms in place but companies fear retaliation, so very rarely use them. For the most part, they will seek either official (embassies) or informal channels (networks) to resolve such issues” (2).
According to our sources, there is an accessible mechanism that allows companies to complain about misconduct or disputes between them and the MoD (1,2).
A dispute is settled:
– amicably, directly between the holder of the contract and the public buyer,
– by referral to the Advisory Committee for the Amicable Settlement of Litigation,
– by arbitration, for the markets of public companies, the specifications may be provided for the settlement of disputes, recourse to arbitration. For disputes concerning the State, public institutions to administration and local public authorities, recourse to arbitration is only possible when these disputes arise from international economic, commercial or financial reports, governed by the arbitration code.
– or to litigation by referral to the competent courts (3).
Article 181 of Decree n°1039-2014, dated 13 March 2014, Organising Public Procurement, provides that companies can complain before the Committee of Monitoring and Review of Procurement. This committee can ask the public purchaser to review the tender if it is established that there is malpractice in procurement. Companies can also complain to the Committee of Amicable Settlement of Litigations. Any contractor whose consent has been vitiated by an act of court may request the competent court to annul the market. He may also claim damages (4). Companies can also complain before the Administrative Court. It should be noted that defence purchases are governed by Decree n° 88-36, dated 12 January 1988. This decree provides a general way for the Committee to examine any problems or disputes relating to the preparation, execution or settlement of contracts and agreements submitted to it. In this decree, there is no special mention to the right for companies to complain about perceived malpractice in procurement.
According to our sources, the mechanism is cheap in terms of cost, which includes a letter of complaint and waiting time. This mechanism allows every company to address the unit, minister, and the Head of Government if needed. The effectiveness of the mechanism depends of the company and the case (1,2). There are no other markers of effectiveness of these mechanisms.
According to our sources, there are few cases of complaints at the ministry level. Given the amount and size of procurement, there are few cases because companies believe that if they complain they may be discriminated against in the future(1,2).
This assessment has demonstrated that there are no oversight bodies that regulate defence procurement, and for this reason, there is not a complaint mechanism to report malpractice. Additionally, evidence showed that there are no laws or regulations that describe the procurement mechanisms of the defence sector in relation to the selection of suppliers; and there is no evidence to suggest that defence procurement is ever conducted as an open competition (1), (2). There is no evidence on the internet of any call for bids or tenders on any of the government’s official websites. As such, there are no set mechanisms for companies to complain about perceived malpractice in defence procurement because there are no formal and official regulations that stipulate protection from any discrimination during the completion process (3).
This sub-indicator has been marked as Not Applicable as there are no complaint mechanisms in place to allow companies to complain about perceived malpractice in procurement, and thus an assessment of effectiveness is irrelevant in this context (1).
This sub-indicator has been marked as Not Applicable as there are no complaint mechanisms in place to allow companies to complain about perceived malpractice in procurement, and thus assessing whether companies trust complaint mechanisms and do not fear retaliation is irrelevant in this context (1).