Angola - Selling to the Government Angola - Selling to the Government
Angolan Government Law on Public Contracting Law amended in June 2016 under Law No. 9/16, allows for two main methods of awarding contracts: direct contracts and tenders. There are three categories of public tenders: by invitation, restricted, and open. The contracting authority selects the type of award according to contract amount and activity (acquisition of goods and services or civil works). Details on each of these contracting methods as specified in Law No 9/16 are described below.
Due to local currency devaluations, the Angolan public tender law was amended by Presidential Decree Nº 282/18, November 2018 to adjust the values public officials are authorized to approve.
Authorizing values are as follows:
- No limit: The president of the Republic of Angola
- 2 500 000 000.00 Kwanzas: Cabinet Minister
- 2 000 000 000.00 Kwanzas: Ministers/Governors:
- 1 000 000 000.00 Kwanzas: Public Companies, Institutes, Funds and Local/regional Governments
Direct contracting is permitted (per Article 143 – 149) if the total contract is equal to or more than 182 million kwanzas (around USD 535,294). Tender values are authorized by specified senior government officials as follows: President of the Republic (with no value limit), the Vice-President (up to 364 million kwanzas or around USD 1,070,588), Cabinet Ministers (up to 182 million kwanzas or around USD 535,294), Ministers, Provincial Governors, public institutes, public companies, autonomous funds, and
managers of budgeting units of the central government and local/regional administration (up to 72 million kwanzas or around USD 211,764).
Tenders by invitation are required for contracts up to 182 million kwanzas (approximately USD 535,294). To be considered, an Angolan company must be registered in the centralized Angolan Government Databank (per Article XIII of the law). A minimum of three entities must be invited to participate in tender (per Articles 138 – 142).
Restricted tenders and open tenders are required when the estimated value of the contract is equal to or exceeds 182 million kwanzas (approximately USD 535 294.18). Bidders must be pre-qualified to be able to participate in restricted tenders (per Articles 117 – 135 of the law).
In the case of open tenders (per Articles 69 – 116) the tender announcement must be published in the “Diário da República” (Daily Gazette) and the “Jornal de Angola” (government national daily newspaper). Cabinet Ministers can authorize open tenders for up to 2.5 billion kwanzas (around USD7,352,941). For open tenders above that value, the responsible Ministry must work through the Presidency’s Procurement Office.
The Public Contracting Law (per Article 53 and Annex V), determines that foreign companies are only allowed to compete directly on tenders with values greater than 182 million kwanzas (around USD 535,294) for goods and services, and greater than 500 million kwanzas (around USD 1,470,588) for public works. The current benchmark values are higher than the previous public procurement law in which foreign companies were allowed to bid directly only on tenders valued at or above 73 million kwanzas (around USD 214,705). Below these values, foreign companies can only participate in government procurements as a supplier or subcontractor to an Angolan company fulfilling a government contract. (Note: exchange rate used in this section is 340Kwanzas to USD 1 based on average rate at the time of publishing this report).
Implementing regulations associated with Public Contracting Law No. 9/16 are as follows:
• Presidential Decree nº 196/16 dated 23 September which approves the Regulation on the price of selling of bidding documents;
• Presidential Decree nº 198/16 dated 23 September which approves the Regulation on registration and certification of State suppliers;
• Presidential Decree nº 199/16 dated 23 September which approves the Regulation on procedure for and execution of framework contracts;
• Presidential Decree nº 201/16 dated 27 September which approves the standard contract forms for works, goods and services.
Reform and modernization of Angola’s Public Procurement law was a condition of the African Development Bank (AfDB) loan to support electric power sector reform in Angola. The 2016 Public Procurement Law aims at modernizing and simplifying the public contract procedures; however, the African Development Bank (AfDB) has identified areas of this law that require strengthening to improve transparency. Angola is not party to the WTO Procurement Agreement.
Foreign companies can compete for Angolan Government business, but to qualify must have a legal presence in Angola or have a legally designated Angolan representative.
Government institutions cannot pay vendors unless the relevant expenditure was authorized in the national budget; therefore, companies should conduct careful due diligence to ensure that an expenditure has been budgeted before pursuing. Due to Angola's growing international debt, and the requirement for companies to transact business through the local banking system, the Angolan government has pushed for contracts to be exclusively in local currency. International companies need to consider this factor very carefully in structuring their business to participate in government contracts with local agents or partners especially given the ongoing difficulty in remitting foreign exchange out of the country.
Oil production companies operate in joint ventures with the national oil company, Sonangol, and are required to announce formally their procurement tenders through the national daily newspaper Journal de Angola and list these business opportunities on their corporate website.
Currently, most projects depend heavily on external financing. In the case of a bilateral export credit agency, financing procurements would adhere to the specific country’s sourcing requirements. Procurements using financing from regional and International organizations, such as the World Bank or AfDB, are subject to the international tender rules of those organizations.
Many governments finance public works projects through borrowing from the Multilateral Development Banks. Please refer to “Project Financing” Section in “Trade and Project Financing” for more information.