Decree-Law No. (94) of 2026 amending certain provisions of Law No. (49) of 2016 on Public Tenders introduced, among other amendments, a revised Article (31), which prohibits the use of a local agent or commission agent in all contracting procedures, in accordance with the rules to be adopted by the Council of Ministers based on the proposal of the competent Minister and following coordination with the relevant authorities.

The principal effect of this amendment is to prohibit the engagement of a local agent or commission agent in such capacity in the contracting procedures. Accordingly, the bidder is required to undertake the contracting procedures in its own name and for its own account, without using a local agent or commission agent to undertake such procedures on its behalf or for its account.

It should be noted that the provision uses the wording “the use of a local agent or commission agent”, and does not impose a general prohibition on carrying out commercial agency activities. Nor does it provide that the mere existence of an agency or distribution relationship between a bidder and a manufacturer or supplier, in itself, prevents participation in a tender. Accordingly, the applicability of the prohibition depends on the capacity in which the relevant party undertakes the contracting procedures and the nature of the role it performs in connection with such procedures.

Accordingly, a distinction must be made between a company that participates in the contracting procedures in its capacity as an agent of another manufacturer or supplier, thereby representing that party or acting as its intermediary in its dealings with the relevant contracting
authority, and a company that submits the bid in its own name and for its own account, enters into the contract in its own capacity, and directly assumes all rights and obligations arising therefrom. The former would, in principle, fall within the scope of the prohibition, whereas in the latter case, the mere existence of an agency or distribution relationship with a manufacturer or supplier would not, in itself, be sufficient to establish that the prohibition applies.

Furthermore, the use by the legislator of the phrase “in all contracting procedures” indicates that the prohibition extends to the various procedures and stages associated with the contracting process and is not limited to the execution of the final contract. Accordingly, the determining factor is the actual role performed by the agent in the contracting process, rather than merely the designation or name of the party appearing in the contract.

This interpretation is further supported by the fact that Article (31) simultaneously regulates the direct participation of a foreign bidder and prohibits the use of a local agent or commission agent in the contracting procedures. This indicates, based on the wording of the provision, an intention for the bidder to undertake the contracting procedures itself, without relying on a local intermediary acting in such capacity.

The significance of this prohibition is further reinforced by the Decree-Law's provision repealing any provision in other legislation that conflicts with the final paragraph of the amended Article (31).

Author: Mazen M. Talaat – Head of Litigation & Consultancy

GHK Lawyers