Discusses the legal requirements for selling to the host government, including whether the government has agreed to abide by the WTO Government Procurement Agreement or is a party to a government procurement chapter in a U.S. FTA. Specifies areas where there are opportunities.
Last Published: 2/4/2019

Selling to the government of Indonesia generally requires the use of a local agent or representatives.  Even where not officially required, a qualified local company can provide important insights and maintain the relationships necessary to succeed as well as to minimize cultural trade barriers.

Procurement by the government in Indonesia is regulated and facilitated by the Procurement Agency, LKPP (Lembaga Kebijakan dan Pengadaan Barang/Jasa Pemerintah). LKPP runs an online E-catalog website and a site for government tender information.  Companies seeking to sell to the government should consider getting listed in the e-catalog which must be done via an Indonesian company. Currently the e-catalog includes mostly heavy equipment, medicine and medical equipment, motorized vehicles, and technology (hardware and software).  This system is  primarily for for central government and the parliament, local and provincial governments are gradually expected to start using it. In 2016, it recorded that LKPP is used for 34% out of Total goods and capital expenditure by the central government[1].
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.

 
[1] Number is obtained from LKPP’s official report and Central Government Report of 2016(Audited).

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