Government contracts are among the largest opportunities for foreign companies in Iraq, from infrastructure and energy to supply and services. Ministries, state companies and provincial authorities award these contracts through formal procedures. A bid that misses a procedural requirement can be rejected, however strong the offer. The Public Contracts Implementation Instructions set the rules every bidder must follow.
Legal Framework
The Public Contracts Implementation Instructions No. 1 of 2025 regulate how government contracts are prepared, tendered, awarded and executed in Iraq. They are issued by the Ministry of Planning and replace the earlier instructions that governed public contracts. Iraq does not have a single public procurement law, so these instructions are the main reference for public tendering.
The instructions work alongside standard bidding documents, Ministry of Planning guidance and the internal rules of contracting entities. Funding sources can also matter: projects financed by international lenders may follow the lender’s procurement rules. Tax and stamp duty rules apply to the contracts once signed.
Key Points for Foreign Companies
Tendering Methods
The instructions provide for several methods of awarding contracts. Public tender is the general rule, with other methods allowed in defined cases, such as limited tenders or direct invitation. The method affects who can bid and how the award is decided. Bidders should confirm the method in each tender announcement.
Tender Documents and Deadlines
Each tender is announced with documents setting out the requirements, specifications and deadlines. Bids must follow these documents exactly. Late or incomplete bids can be excluded. Clarification requests should be submitted within the period allowed.
Qualification of Bidders
Bidders must meet qualification requirements, such as financial capacity, experience and registration. Foreign companies often need a registered branch or local presence in Iraq to sign or perform the contract. Documents from abroad must usually be legalised and translated into Arabic.
Guarantees
Bidders are usually required to provide a bid guarantee with their offer. The winning bidder must then provide a performance guarantee before signing. Advance payments are normally secured by an advance payment guarantee. Guarantees must be issued in the form and by banks acceptable under the rules.
Evaluation and Award
Bids are evaluated by committees formed by the contracting entity. Evaluation follows the criteria in the tender documents. The award decision must be approved by the competent authority. Bidders may have the right to object to decisions within set periods.
Contract Execution
Once signed, the contract is managed by the contracting entity under the instructions and the contract terms. Variations, extensions and delay penalties follow defined rules. Contractors should keep careful records of instructions, delays and changes.
Payments and Final Settlement
Payments are made according to the contract and approved progress. Final payment and release of guarantees usually require tax and social security clearances. Planning for these clearances early avoids delays at project completion.
Practical Recommendations
- Read the full tender documents and confirm the award method before preparing a bid.
- Prepare legalised and translated company documents well in advance.
- Arrange bid and performance guarantees with acceptable banks early.
- Keep complete records of all correspondence, variations and delays during execution.
- Start tax and social security clearances before the final payment is due.
Conclusion
The Public Contracts Implementation Instructions shape every stage of a government contract in Iraq. Foreign companies that follow the procedures carefully improve their chances of winning bids and getting paid on time.
This article provides general information only and does not constitute legal advice. For advice on government contracts in Iraq, contact Etihad Law team.