Timor-Leste — Public Law

New Code for Procurement and Public Contracts in Timor-Leste

1 June 2025 will mark the entry into force of Decree-Law no. 1/2025, published on 8 January, approving the new Code for Procurement and Public Contracts (“CPPC”) and revoking the previous Legal Regime of Procurement, Public Contracts and Related Infringements, approved by Decree-Law no. 22/2022, of 11 May.

This new law aims to create the conditions necessary to ensure efficiency, flexibility, and transparency in public procurement and the economic and social development of Timor-Leste. Its main goals are to:

establish a more organised and efficient general public procurement regime to avoid the proliferation of special schemes;
offer greater flexibility, allowing public entities to select the procurement procedures best adapted to their needs, with the revision and extension of the types of procurement procedures;
create a framework that provides greater support for the development of national companies and suppliers, through the establishment of new local content protection rules;
speed up the public procurement process by introducing shorter deadlines for public procurement and contracting procedures.

Contacts

establish a more organised and efficient general public procurement regime to avoid the proliferation of special schemes;
offer greater flexibility, allowing public entities to select the procurement procedures best adapted to their needs, with the revision and extension of the types of procurement procedures;
create a framework that provides greater support for the development of national companies and suppliers, through the establishment of new local content protection rules;
speed up the public procurement process by introducing shorter deadlines for public procurement and contracting procedures.

The CPPC enters into force on 1 June 2025, without prejudice to the fact that, as a rule, it will only apply to procurement procedures launched after that date and to the performance of contracts concluded as a result of those procurement procedures.

Main changes

The CPPC brings several changes to public procurement and contracting procedures, among which we highlight:

The reintroduction of the restricted tender procedure for particularly complex or specific goods and services related to small-scale markets, e.g., pharmaceutical products and medical equipment for the national health system, road works, or custom software solutions. This procedure is implemented by sending invitations for participation to all suppliers registered as State suppliers.
Changes to the value criterion for the selection of the type of procedure, allowing for greater flexibility in this selection. The contracting entity will now be able to (i) pursue direct award in procedures with a value of US$50,000 or less; and (ii) request price quotations in procedures with a value of US$200,000 or less.
The introduction of special rules for procurements financed by development partners. The contracting entity can adapt the procurement procedure to the requirements contractually agreed with its development partners, to the extent justified and strictly necessary, within certain limits.
The provision of a new framework agreement regime regulating future contractual relations, by setting the respective terms and conditions in advance. This regime aims to ensure the continuous supply of goods and services, without any disruptions that could jeopardise key sectors.
As such, framework agreements can be concluded for the aggregate purchase of goods, services, or works (i) in the case of established and recurring needs, which are based on identical or similar specifications; and (ii) whenever the consolidation of several supplies in a single procedure allows for payment facilities or price discounts.

The establishment of rules supporting the strengthening and development of national companies and suppliers, by increasing (i) the score of the bids, by not more than 10% of their overall score, when the award criterion is the best price-quality ratio; and (ii) the price presented, by not more than 10% of the price presented, when the award criterion is the lowest price.
Permission for advance procurement, whereby it is possible, under certain conditions, to open procurement procedures before prior approval of the expense, in order to ensure the timely supply of goods, services and works. In these cases, contracting is subject to the approval of the expense in the following year.
The exclusion of the rules on work contracts under the general regime, which should be set forth in a separate statute, respecting the general contracting principles of the CPPC.
The establishment of a duty to report illegal practices and of mechanisms to protect whistleblowers acting in good faith, with a view to increasing control and accountability in the field of public procurement.
The adoption of an anti-abuse rule to prevent contract splitting and to strictly determine the value of the procedure. Therefore, if a contracting entity carries out procurements with the same object (or complementary object) within the same 12-month period, each of these procurement procedures corresponds to the sum of the values of all prior procurements