Ministry of Finance announces Federal Decree-Law No. 11 of 2023

The Ministry of Finance announced the issuance of Federal Decree-Law No. 11 of 2023 on Federal Government Procurement, which sets the general framework for the procurement of products and services in the UAE’s government.

The law, based on advanced and flexible international best practices, aims to define the principles, controls, and standards for government procurement operations, enhancing and guiding procurement processes within federal government entities.

It aligns with the UAE’s digital agenda and enables its drive to implement digital procurement systems utilising world-class policies and practices, as well as ensuring equality and fairness among participating suppliers, involving relevant stakeholders and participants in the purchasing process at federal entities, and ensuring that they implement operations efficiently and effectively to ensure quality and achieve spending efficiency.

The Federal Decree-Law No. 11 of 2023 also aims to enhance integrity, trust, transparency, and competitiveness in all procurement procedures, while providing public value and public interest that align with global quality standards and sustainable development. It also supports Small and Medium Enterprises and the national economy, provides flexibility, improves the performance of purchasing and contracting operations, and enhances the efficiency of planning and procurement management at a federal level.

The law applies to all procurement and contracting activities and procedures of federal entities mentioned in Article (3), including ministries, authorities, and central agencies, as well as subsidiaries under them. Likewise, the law applies to independent and autonomous federal entities that are established to carry out specific government responsibilities or services and operate under the supervision of the government through their own administrative and organisational structure and their own budgets, and are not-for-profit.

The law also specifies the exempt entities in Article (4), due to the nature of these entities and the special regulations that exist to govern their procurements. Nonetheless, the law recommends that these exempt entities refer to Federal Decree-Law No. 11 of 2023 as a guide to attain the best value for their purchases.

This law and its executive regulations standardise the governance of the procurement process, including the roles and responsibilities of federal entities, councils, committees, and relevant organisational departments. It outlines that all procurement operations, at all stages, are subject to the principles of transparency, competitiveness, and equal opportunities, and must be implemented in accordance with the rules stipulated in this law and its executive regulations.

To ensure flexibility and business continuity, the Federal Decree-Law No. 11 of 2023 stipulates that Cabinet Resolution No. (1/1) of 2022 regarding the adoption of the Digital Procurement Policy for the federal government, and Cabinet Decision No. (4) of 2019 regarding procurement regulation and storehouses management in the federal government, will continue to be enforced as long as they do not conflict with its provisions, until the executive regulations implementing this law are issued.

In addition, to mitigate interference in running projects, the law, which entered into force on December 1, 2023, doesn’t apply to federal entities’ procurement contracts concluded before the aforementioned date. However, the provisions of Federal Decree-Law No. 11 of 2023 must be followed upon amendment, renewal, or extension of these existing contracts.

  Hazem Hussein / Muhammad Aamir