Tenders for most major non-military government projects are issued by the Tender Board, the government agency that evaluates civil government contracts in excess of RO [Omani Rial] 250,000 (approximately $650,000). Internal tender boards in the ministries handle smaller projects plus defense and telecommunications contracts. Under Tender Board guidelines, an Omani bid receives a 10 percent price preference, the factor by which its bid can be higher than that of a foreign company and still be judged equivalent. In addition, bid-closing dates are typically short, sometimes no more than one month. Nevertheless, the Tender Board has shown greater flexibility in issuing extensions for bidders on major projects. In some cases, tenders are announced only to firms pre-selected by consultant firms, although the government appears to be moving more towards an open tender process on major projects. Despite improvement in government efforts to publicize tenders to international bidders, the tender evaluation process for major projects remains relatively slow, often resulting in delays in awards and changing requirements that have raised bidders’ costs and discouraged some firms from participating.

THE TENDER PROCESS

In 1975 the government established a Tender Board to handle contracts for all large government projects, except those of the Ministry of Defense, the Diwan of Royal Court, PDO, and Oman Telecommunications. Ministries can award contracts through their internal tender boards for projects up to $650,000. Projects that exceed that amount must be referred to the Tender Board, which determines the terms of bidding, invitations for bids, and selection of firms for awards.

In most instances, there is no formal pre-qualification process for smaller contracts. In order to submit a bid, firms should have an Omani sponsor or partner (see appendices for list of commercial contacts) and must be registered with the Ministry of Commerce and Industry and with the Tender Board. However, the Tender Board will accept a bid from a firm without an Omani sponsor if the company is new to the Omani market and does not have time to secure a sponsor prior to submitting the bid. Still, a sponsor is advisable given the need for local follow-up. A temporary deposit in the form of a bank guarantee for 2 percent of value of the tender is required. Contracts are generally, but not necessarily, awarded to the lowest bidder.

The Tender Board takes into account factors other than price such as past performance, financial responsibility, compliance with registration procedures, proposed local content, and percentage of Omanization of the firm. That said, price appears to be the primary factor, with Omani registered firms granted a 10 percent price preference.

After notification is given of an award, final negotiations concerning clarifications and adjustments take place before the contract is executed. Sixty days usually pass from selection through award notification to signing of the contract.

Although there are frequent delays in evaluation of bids and awarding of tenders for major projects, Tender Board procedures are generally regarded as fair, with measures in place to eliminate malfeasance or bias towards a particular bidder. The Tender Board has improved its efforts to publicize bids to international companies. The Tender Board publishes tender announcements in the widely distributed Middle East Economic Digest.

Tender announcements are also published on the Tender Board website
[HTTP://www.tenderboard.gov.om]

Omantel website: http://www.omantel.net.om

The Oman Chamber of Commerce and Industry website: http://www.chamberoman.com

The Chamber of Commerce and Industry also offers tender updates service free of charge.