Developments in new Procurement Law
On 16 May 2023, the new procurement law was promulgated into force. It comes as the replacement of the 2012 procurement law. The adoption of this new law is a part of the Strategy for the Reformation of the Public Procurement System 2019 -2025.
What are the developments?
If compared to the repealed law, the new procurement law provides more comprehensive provisions, an additional chapter, and with some higher penalties.
The Structures: Notably, the 2012 law has only 14 chapters; meanwhile, the new procurement law has 15 chapters. The additional chapter in the new procurement law is on the monitoring of procurement works, auditing, and financial inspection (to be specific, Chapter 10 of the 2023 procurement law). This chapter entitles the Ministry of Economy and Finance to conduct any impromptu inspection if necessary.
- The Scope:
If looking into the scope of the law, the new law does not make any difference from the previous law as it maintains that it covers all public procurement except 1) the procurement under financial projects, 2) under public-private partnership law (under previous, it provided that “under other specific law”), and 3) the procurement that concerns the security’s secrecy.
- The Procurement Procedure:
Besides, more importantly, the new law clearly specifies the procurement process which includes:
- preparation of tender documents,
- public announcement of invitation to bid,
- sale of the tender documents and collection and record of the application,
- issuance of the invitation to submit bidding documents,
- evaluation of all bids, and
- awarding of the contract.
- The Bidders
Meanwhile, for the qualification of the bidder, the new procurement maintains the concepts and provisions of the previous law. All bidders are given equal opportunities to participate in the procurement unless prohibited by the court or placed on the blacklist by the Ministry of Economy and Finance. All bidders are required to register with the Ministry of Economy and Finance.
- The Existing Supplemental Regulations
Nevertheless, based on the transitional provision of the new law, all regulations that were adopted under the framework of 2012 are continued to be in force until replacement.
In summation, the new law maintains most of the existing framework while including new several mechanisms.
This alert is for general information only and is not a substitute for legal advice.