Procurement Risk:
Critical
Score:
11/100
Government Policy
Q57
0/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This sub-indicator is not assigned a score in the GDI. Kuwait has legislation that explicitly covers all defence and national security purchases and agreements…
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The country has no legislation covering defence and security procurement that makes reference to corruption risks.
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It is difficult to assess how thoroughly these laws are implemented because officials refused to speak about these deals, and defence contractors are also…
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Q58
25/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The defence procurement cycle is partially formalised. Contract implementation, sign-off and asset disposal are formalised but the assessment of needs is generally missing, officials…
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The public only has access to a total figure for the amount of money made off asset disposal from the Finance Ministry and the…
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Since the area is sensitive, it does not get much media attention and security officials declined to speak about the matter but there is…
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Q59
33/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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Oversight mechanisms are formalised (6) but all auditors are subject to undue political interference by the Emir and his loyalists, officials and activists said…
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The oversight mechanisms are inconsistently active but they do demand witnesses and documents, activists said (1,2). Questioning goes nowhere, however. There appears to be…
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The oversight bodies including Parliament, do make some developments related to defence procurement public, but they do so inconsistently. Most of the news reports…
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Capability Gap and Requirements Definition
Q62
0/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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There are no publicly available procedures or policies which detail how the Government discriminates in its selection of suppliers and subcontractors. State auditors, who…
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This sub-indicator has been marked Not Applicable because it is unclear whether the security agencies have policies and laws that regulate how the Government…
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Q63
42/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Auditors say that internally the security agencies do attempt to tie their procurement decisions to their defence strategy (which is not available to the…
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Auditors have the right to scrutinise these processes but they are often not given the full facts, auditors said (1, 2 and 3). The…
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All purchases are tried to the country’s defence strategy but it is extremely vague, auditors said (1, 2 and 3). The absence of examples…
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Tender Solicitation, Assessment and Contract Award
Q64
13/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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According to SIPRI, 88 percent of Kuwait’s military purchases are from the US, which analysts and activists say suggests that these are not open…
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Parliament and the SAB have the right to question defence and security officials on everything and anything but their questioning is made almost pointless…
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Q65
31/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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The defence and security officials who authorise purchases are officers and they are subject to the code of conduct of the police and the…
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Despite the powers in law, it is almost impossible for auditors to access any information about most defence purchases and the ones that they…
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There is no information made available about the tender boards.
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The SAB often complains that it is sidelined by certain agencies and that some bodies even attempt to mislead them by giving them conflicting…
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Q66
0/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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Collusion between bidders is illegal in Kuwait in general, according to the PTA’s law (1). In fact, the whole tender process can be dissolved…
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This sub-indicator has been marked Not Applicable because it is unclear if there is such legislation that applies to the defence sector. There is…
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This sub-indicator has been marked Not Applicable because it is unclear if there is such legislation that applies to the defence sector.
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There is no evidence that training is provided to procurement officials with regards to collusion.
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Contract Delivery and In-Service Support
Q67
13/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Auditors said that they are told that there are formal procedures that empower defence and security officials to track and assess the supplier’s service…
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The Government does not release any information about agreements or the delivery obligations of contractors beyond occassionally declaring what they have bought, and only…
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It is unclear if defence and security officials follow through on the procedures they told auditors that they have, because they refuse to present…
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It is unclear if defence and security officials follow through on the procedures they told auditors that they have because they refuse to present…
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Q68
0/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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There are formal procedures in place for companies to complain, which include a court process and an internal complaint mechanism, but they are part…
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This sub-indicator has been marked Not Applicable because there is no reliable information available to the public or auditors about the cost of complaint…
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This sub-indicator has been marked Not Applicable because there are no available facts on the matter since the only people with access to them…
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There is only clear legislation for punishment when it comes to offset programs and the purchases that don’t fall under “defence materials” by the…
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This sub-indicator has been marked Not Applicable because auditors, analysts and activists could not evaluate how the security agencies investigate and sanction contractors for…
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This sub-indicator has been marked Not Applicable because auditors, analysts and activists could not evaluate how the security agencies investigate and sanction contractors for…
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Offset Contracts
Q70
25/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Offsets are permitted and managed by the Kuwait Direct Investment Promotion Authority (KDIPA). Any defence contract of the value greater or equal to KD3…
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When negotiating offset contracts, the Government demands that the contractor identifies all risks related to the program and how they would deal with them…
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Tbe ‘Guidelines for Kuwait Offset Program’ [1] includes an ‘Offset Milestone Schedule’, which includes six stages from ‘Concept Paper stage’ to ‘Offset Fulfilment certificate’,…
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The KDIPA website does not include details about specific offset contracts [1]. The 2018 Annual Report makes mention of an existing 20 projects, and…
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No details regarding completion reports could be found online. The security agencies refuse to give these reports, assuming they actually exist, to external auditors…
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There is not enough information to score this indicator. According to the 2018 Annual Report, five obligors failed to make a decision on fulfilling…
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There is no reason to believe that offset agreements (like all other defence agreements which are conducted in almost complete secrecy) are struck after…
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Agents / Brokers
Q73
0/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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There appears to be no restrictions on the use of intermediaries and agents in the procurement cycle, and there appears to be no will…
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This sub-indicator has been marked Not Applicable because there appear to be no restrictions on the use of agents and intermediaries in the procurement…
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Financing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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No information about the financial packages are made public. Sometimes even the auditors and lawmakers fail to access this information, officials and activists said…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This is indicator is not assigned a score in the GDI. Virtually all defence decisions are driven by political influence and that is why…
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This is indicator is not assigned a score in the GDI. The Government does not justify military purchases by referring to its military needs…
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This is indicator is not assigned a score in the GDI. Domestic politics do not influence these decisions mostly because local politicians do not…
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