The Construction Services Development Agency (LPJK / Lembaga Pengembangan Jasa Konstruksi) has issued Regulation No. 11 of 2006 to facilitate the classification, qualification, and certification of construction services contractors. The basic premise of the Regulation is to ensure that all service providers in this sector are registered. The Regulation is technical in nature and deals exclusively with the procedures for the registration process, the people and corporate entities covered, the type of construction services, and administrative matters relating to the application of the provisions of the Regulation.

The mandate contained in Law No. 7 of 1994 on the Ratification of the Agreement on the Establishment of the World Trade Organization and Law No. 18 of 1999 on Construction permits the Minister of Public Works (MPW) to define and determine the terms and conditions for participation of foreign companies in the procurement of goods/services in Indonesia.

The State Minister for National Development Planning / Head of the National Development Planning Board in accordance with Presidential Regulation No. 8 of 2006 which is the fourth amendment of Presidential Decree No. 80 of 2003 on the Procurement of Government Goods / Services. The Presidential Regulation requires that Government staff involved in the procurement of goods and services possess certification of expertise in this area.

The Government recognizes that there is a critical need with respect to the provision of infrastructure and that this need will be best driven with additional Government support and participation. The types of support that the Government envisages will rely heavily on the State Budget (APBN) and therefore requires the application of acceptable and appropriate risk control and management principles.

The Minister for Public Works has issued Circular No. 08/SE/M/2006 to clarify the requirements that must be fulfilled in the procurement of construction services. This is important as there is a significant amount of legislation covering this field including Law No. 18 of 1999; Government Regulations No. 28, 29, and 30; Presidential Decree No. 80 of 2003 and No. 70 of 2005; Presidential Regulation No. 32 of 2005; Minister for Regional Settlements and Infrastructure Decision No. 339/KPTS/M/2003; and Minister of Public Works Decision No. 448/KPTS/M/1995.

The Government late last week issued Presidential Regulation No. 8 of 2006, a fourth amendment to the government procurement rules set out in the Presidential Decree No. 80 of 2003. Aside from ensuring that these rules are in line with the state finance and treasury laws, the amendment specifically aims to simplify and expedite the procurement procedures while improving transparency of the process.

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