How to Conclude a Contract with a State-owned Company under Iranian Laws and Regulation
Concluding contracts with state-owned companies are part of Iranian administrative law and there is a number of restrictions and formalities governing this field. The Iranian Law on Tendering and Constitutional restrictions and requirements are some of the legalities to begin with.
Rise Up to Conclude an Agreement with Iran Public Sector
For concluding a contract with a state-owned company or a governmental institution, first you have to appear as a company. Your company formation could happen in any form and the preferences depend on any given field of business, but in general, governmental institutions in Iran are more willing to conclude contracts with joint stock companies, in comparison with limited liability companies and other forms.
Administrative Contracts vs Civil Contracts
There is a body of special requirements governing administrative contracts and makes important differences between this thread of agreements and civil contracts. Of course, the basic principles of the latter, are also enforceable for the former. As a principle, one should know, the governmental institutions and state-owned companies are not free to agree upon any terms and conditions they wish in a contract, but there are some regulations, general or genre-specific, which determine necessary clauses.
Pre-Selected Contractual Terms and Conditions
For example, the “regulation of purchasing consultative services” establishes the playground for governmental institutions and state-owned companies to meet their needs to experts and specialists. The terms embedded in this regulation include: ITC= Information to Consultants, LOI = Letter of Invitation, PQ = Pre-qualification, EC = Evaluation Committee, RFQ = Request for Qualification, QCBS = Quality and Cost Based selection, Engineering and procurement and Construction, Provisional Sum, etc.
Tendering and Governmental Transactions
As you already know, governmental institutions and state-owned companies choose their contractual parties by the means of tenders. The Iranian “Law on Tendering” presents a clear and detailed process of selecting contractors. Article 4 of this law divides tenders into single / two stage tender, and also open / selective tender. Article 5 deals with tender committee and the following articles discuss the details around it, like the mechanism for objecting to the committee decisions.
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