Algeria has adopted a new public procurement code which governs the conditions for awarding public contracts to Algerian and foreign companies.
The text was published this Thursday, August 10 in the Official Journal. With the new public procurement code, Algeria limits the access of foreign companies and the use of imported products in the awarding of public contracts, which represents one of the most important growth levers for the Algerian economy.
Article 60 of the Algerian Public Procurement Code obliges the contracting service to “take into account, when establishing the conditions of eligibility and the system for evaluating offers, the potential of companies governed by Algerian law, in particular small and medium-sized enterprises, to enable them to participate in public procurement procedures, in compliance with optimal conditions relating to quality, cost and completion time. It obliges principals to “give priority to integration into the national economy and the importance of batches or products subcontracted or acquired on the Algerian market”.
Algeria: limited use of foreign companies and products in public procurement
The same article indicates that “whatever the procedure chosen, the contracting department must provide, in the specifications, measures allowing the use of the imported product only if the equivalent local product is unavailable or of a quality that is not does not meet the required technical standards.”
Also, the contracting service “should only allow the use of foreign subcontractors when companies governed by Algerian law are unable to meet its needs”.
Article 61 of the new Algerian public procurement code sets another condition for the use of foreigners. It provides that “with the exception of services governed by special rules, services related to craft activities are reserved for national craftsmen as defined by the legislation and regulations in force, except in cases of impossibility duly justified by the service contractor.”
Article 60 of the new public procurement code grants a “margin of preference” to products of “Algerian origin and/or to companies governed by Algerian law whose capital is majority-owned by resident nationals.”
Article 59 of the same text puts another barrier for the use of foreign companies in the context of public procurement, by establishing national preference. “When national production or the national production tool are able to meet the needs to be met by the contracting service, the latter must launch a call for national competition”.
Article 57 of the same code specifies that the specifications of international calls for competition must provide, for foreign bidders, “the commitment to invest in partnership” in Algeria, when “these are projects whose the list is fixed by decision of the head of the public institution or the minister concerned, for their projects and those of the public establishments which come under it.”
Public procurement: mandatory advertising on the approved electronic press
For the advertising of national and international calls for tenders, the new text makes advertising compulsory, which “takes place in the official bulletin of the public operator’s contracts (BOMOP) and through the approved written and electronic press, for certain forms of the method of awarding public contracts” (Article 46).
“Recourse to advertising must also be carried out at the level of the electronic public procurement portal, under the conditions defined by order of the Minister responsible for finance, for the aforesaid award methods, including for the consultation procedure referred to in l Article 18 of this law”.
Public procurement in Algeria: over-the-counter conditions
The new Algerian market code defines five cases where the contracting service can resort to over-the-counter or negotiated procedures. The first is when the call for tenders is declared unsuccessful for the second time, the second case concerns contracts for studies, supplies, and specific services whose nature does not require the use of a call for tenders.
“The specificity of these markets is determined by their object, the low degree of competition or by the secrecy of the services”, specifies article 42.
The contract department may use the negotiated procedure for works contracts falling within the exercise of the sovereignty of State institutions, contracts already awarded, which are subject to termination, and whose nature is not accommodate the deadlines for a new call for tenders.
It may also use over-the-counter transactions for operations carried out within the framework of the Government’s cooperation strategy, or bilateral concessional financing agreements, debt conversion into development projects, or donations when the aforementioned financing agreements foresee it.
“In this case, the contracting service may limit the consultation to companies only from the country concerned for the first case or from the donor country for the other cases”.
