Instructions for the Implementation of Government Contracts

Instructions for the Implementation of Government Contracts and the Mechanism of Private Sector Contracting with the Public Sector in the Republic of Iraq

 

The private sector in Iraq is considered responsible for executing approximately 70% of the work in the Republic of Iraq, whether in the form of supply, public works, consultancy services, or non-consultancy services, since the private sector – whether Iraqi, Arab, or foreign – possesses the capacities and resources enabling it to implement strategic and investment projects across various fields of specialization.

Iraqi law has regulated the matter of contracting between the public and private sectors through systems and instructions, without issuing a special law on government contracts. These systems and instructions have varied depending on the different political and temporal stages in Iraq, and the relevant regulations were issued as follows:

         1.      Instructions for the Implementation and Follow-up of Projects and Works of National Development Plans (1988) and the Tender Instructions (Procurement and Supply) for State Departments and the Socialist Sector (2001). These instructions were applied from their effective date until April 9, 2003, and remained in force until 2007.

         2.      Government Contract Implementation Instructions No. (1) of 2007, published in the Iraqi Gazette, Issue No. 4039 on 18/4/2007. This was the first issuance of instructions specifically concerning government contracts in Iraq and the general contracting mechanism. It also repealed the instructions related to the implementation of national development plans.

         3.      Government Contract Implementation Instructions No. (1) of 2008, published in the Iraqi Gazette, Issue No. 4075 on 19/5/2008. This was the second set of instructions regulating government contracting in Iraq. They organized contracting in general while addressing certain contractual details and repealed the 2007 instructions.

         4.      Amended Government Contract Implementation Instructions No. (2) of 2014, published in the Iraqi Gazette, Issue No. 4325 in July 2017. This was the third issuance regulating government contracts in Iraq, organizing the contracting process and implementation of investment and development projects under allocations within the investment, operational, or current budgets. It also regulated contracting between the public and private sectors, in addition to contracting with state-owned companies for the implementation of projects included in their investment or operational programs.

These instructions do not apply to the following:

A. Projects and contracts of state departments and the public sector financed by foreign states, international or regional organizations, or NGOs, implemented under specific agreements or protocols concluded with the government contracting entity. The provisions of these instructions shall apply if the agreement does not prohibit them.

B. State-owned companies when executing government contracts awarded by official contracting entities.

C. The Ministries of Defense and Interior and the security agencies with regard to arms contracts and the procurement of military and security equipment, provided they are subject to regulations set by the relevant sectoral committees of the Council of Ministers.

Supplementary regulations have been issued under the Government Contract Implementation Instructions No. (2) of 2014, totaling 23 regulations up to the date of this article, covering various aspects of government contracting.

 

The above-mentioned instructions have defined the contracting methods for the execution of government contracts as follows:

         1.      Public tender.

         2.      Limited tender.

         3.      Public tender with technical prequalification.

         4.      Two-stage tender.

         5.      Direct invitation.

         6.      Single offer (sole bid).

         7.      Direct contracting.

         8.      Direct purchase from reputable manufacturing companies.

         9.      Procurement committees.

 

In subsequent articles, we will discuss each of these contracting methods in detail, with reference to the most important and commonly used methods in the execution of government contracts.

Al-Nesoor Law Firm