Algeria’s Public Procurement Transformation: Key Insights and Implications

The Law on Public Procurement, also known as Law No. 23-12, enacted on August 5th, 2023, is a significant component of the comprehensive public finance reform plan. Its primary aim is to foster good governance, transparency, and accountability in the management of public funds. This essay explores the key procedural aspects and measures introduced by this law, highlighting its potential to promote fair competition, combat corruption, and expedite processes for the benefit of both the public sector and private enterprises.

  1. The Three Fundamental Principles:
    The Law on Public Procurement rests on three crucial principles: freedom of access to public contracts, equal treatment of candidates, and procedural transparency. These principles serve as the foundation for fair procurement practices, ensuring that all eligible entities have an equal opportunity to participate in public tenders.
  2. Revised Procurement Procedures:
    The law mandates that contracting authorities must adhere to the procedures of either competitive bidding or negotiated procedures with formal consultation. Competitive bidding, the general rule, replaces the existing »ordinary direct contract » and « direct contract after consultation » arrangements. These new procedures aim to balance efficiency and competition while maintaining transparency.
  3. Evaluation of Expertise and Capacities:
    To evaluate the technical, professional, and financial capacities of candidates and bidders, the law provides for the establishment of a national database, sector-specific databases, and databases at the level of each contracting authority. Regular updating and maintenance of these databases would ensure that only qualified participants are considered for public contracts.
  4. Ethical Standards in Public Procurement:
    As part of the fight against corruption, the law mandates the approval of a code of ethics and professional conduct for public agents involved in any stage of the procurement process. This code, approved by executive decree upon the proposal of the Minister of Finance, would establish the necessary ethical guidelines for ensuring integrity and fairness.
  5. Creation of the National Council for Public Procurement:
    An important addition brought by the law is the establishment of a National Council for Public Procurement, which will operate under the Ministry of Finance. This council’s responsibilities include offering consultations, assistance, and examination of matters related to public procurement. It is also entrusted with providing opinions on disputes arising from contracts with international partners and conducting an annual economic assessment of public procurement activities.
  6. Digitization for Efficiency: In a bid to expedite procedures and enhance oversight, the law replaces physical processes with a digital information exchange system. The Ministry of Finance will manage the electronic portal for public procurement, enabling swift communication and transparency in all relevant activities.
  7. Promoting Local Production:
    To stimulate national production, the law sets a provision that mandates contracting authorities to reserve a maximum of 20% of contracts exclusively for small or micro-enterprises, start-ups, or any entity labeled as such. This measure encourages local businesses and allows them to contribute to public service delivery.

The Law on Public Procurement, with its emphasis on transparency, fair competition, efficiency, and
accountability, represents a significant step forward in the reform of public finances. By introducing
fundamental principles, revised procedures, ethical standards, and the use of digital platforms, this law creates a framework conducive to promoting good governance and the responsible use of public funds. It sets the stage for enhanced trust, economic growth, and the achievement of national development goals through efficient and transparent procurement practices.

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