Tendering in Oman: Practical Issues

Foreign companies wishing to tender in Oman need to understand a wide range of matters such as legal procedures, applicable government policies, the procurement guidelines, approvals required, and the implications of policy and law changes.

In this article, we highlight some issues which may impact on tendering in Oman.

• The Tender Board: Article 3 of the Tender Law provides that contracts for the supply or execution of works or transport or offers of services, consultancy studies, technical works, and purchase and lease of real estate shall be through public tenders. Certain types of contracts such as security and defence units do not go through the Tender Board; rather, these are carried out through other ministries.


• Registration: Before a foreign company may submit a bid to the Tender Board, it must register with the Tender Board. The criteria for registration depends on whether the project is for construction, supply, consultancy, or training.


• Local Representation: It is not necessary for the foreign company to have a local presence in Oman at the time of bid submission. Article 23 of the Tender Law provides that foreign companies, however, must form a local entity within 30 working days of winning the bid. Some quasigovernmental entities require foreign companies to submit their tenders through a local Omani agent, but there is no such requirement with the Tender Board.


• Standard Government Contract: Companies should be aware that the contract entered into with the government is the Omani Standard Forms and Conditions, which is based on the FIDIC standard form.


• Applicable Laws: In addition to the Tender Law, companies also should be aware of other relevant laws such as the Law of Engineering Consultancy Offices and the Foreign Capital Investment Law.


• International Treaties: The U.S.-Oman FTA and the GCC-Singapore FTA each include a dedicated chapter on government procurement.


• Oil and Gas Projects: There are additional requirements for companies wishing to bid on oil and gas projects. For example, some tenders require Oman Society for Petroleum Services (OPAL) certification.

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GCC - Singapore Free Trade Agreement

The recent signing and implementation of the landmark GCC-Singapore Free Trade Agreement (GSFTA) is poised to bolster trade and create business opportunities between Oman and Singapore.

The GSFTA provides a framework for integration of the Gulf economy with that of the Asian financial center by promoting and facilitating the greater flow of goods, services, investment, and people between the two regions.

The Agreement also represents a political milestone for the GCC as the first Free Trade Agreement (FTA) entered into by the organization comprised of member states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

The GCC is Singapore’s seventh largest trading partner, with bilateral trade reaching a record height of S$42.4 billion in 2007, up 127% since 2002. Total exports from the GCC to Singapore were worth S$34.8 billion, while Singapore exported an estimated S$7.5 billion worth of goods to the GCC. Singapore’s investments in the GCC totaled S$357 million in 2006. Oman’s primary exports to Singapore are petroleum crude, refined petroleum products, alcohols phenols and derive, lime cement stones, and heating and cooling equipment.

The GSFTA covers primarily Trade in Goods, Trade in Services, and Government Procurement. Additionally, it streamlines customs procedures, pledges ongoing cooperation in areas such as air services, Halal certification, and business visit cooperation, and commits the parties to complete negotiations on bilateral Investment Guarantee Agreements (IGAs) within two years.

Key elements of the GSFTA include:

1. Trade in Goods. The Agreement provides for comprehensive tariff elimination that will make each party’s goods more competitive vis-à-vis other foreign imports.
2. Customs. The GSFTA streamlines customs procedures for both countries, facilitating the flow of goods across borders. Under the Agreement, each party’s customs authorities will:

• • Provide an advance ruling on the eligibility of originating goods for preferential tariffs and tariff classification. Such a ruling will provide traders with greater certainty on the status of goods at the country of import.
• • Waive the requirement for a certificate of origin for low-value originating goods, allowing traders to save on time and cost.
• • Enhance transparency in customs controls so that traders can be fully aware of the customs requirements and procedures in their respective countries.

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