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: 6/28/2019

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.

State procurement is regulated by the 2015 Law on State Procurement and several amendments, and applies to ministries, state agencies, and companies and enterprises in which the state holds more than 50% of the shares.  In 2014 the law was amended to allow vendors from member countries of the Eurasian Economic Union to participate in public procurement tenders on equal terms with domestic suppliers.

The latest amendments to the law include a clear definition of “dumping price” to avoid underpricing, introduction of a complaints’ register, requirements to exclude non-financially sound suppliers and offshore zone registered companies, measures to prevent unfair advantage by obtaining access to competitor information and changes to the principles for making single source procurements.   

The procurement system in Kazakhstan is highly decentralized with different government agencies and companies managing specific procurement projects. The Ministry of Finance develops procurement policies and the Committee for Public Procurement is responsible for enforcing the laws and regulations on public procurement.

The state procurement process is implemented through mandatory tenders announced by government agencies.  Newspapers designated by the Committee for Public Procurement publish the tender opportunities. To facilitate the procurement process, the government created an
e-procurement system.  The State procurement website (only in Kazakh and Russian) was launched in 2008 and the E-commerce Center (website is in Kazakh, Russian and English) was assigned as the sole operator in electronic state procurement. According to the latest changes in Law on State Procurement, from 2019 the E-finance Center provides services for accessing the portal on a paid basis and from 2020 a new concept of “e-wallet” will be introduced for potential suppliers and designed to conduct payments to guarantee bids.  Kazakhstan’s state procurement regulations seek to provide international standards of transparency and public accountability.  However, what appears in print and what happens in practice can be very different.  Short deadlines for tenders (suggesting a preselected supplier), a lack of transparency in business dealings, and nonpayment issues remain a challenge. The regulations often favor domestic suppliers over foreign companies.

U.S. companies are advised to approach any government tender deliberately. However, lucrative opportunities do exist, and American companies have had success in Kazakhstan.  Companies should be wary of payment-after-service arrangements and use payment schemes providing additional guarantees of timely payments.  Not doing so puts any firm at risk, with little recourse through Kazakhstan’s judicial system.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.