Law 182 of 2018 on public contracts: a contractor's guide
Law 182 of 2018 on contracts made by public bodies is the Egyptian law that governs public bodies' contracts, including works contracts and supply and services contracts; its Executive Regulation was issued by Minister of Finance Decree 692 of 2019. What matters most to a contractor: certificates paid within 60 days of a complete submission, 5% of the value of work retained until provisional taking-over, mandatory price adjustment for works contracts of six months or more, and the limits on delay charges.
By Ta3mir engineering team · Published · Last updated
The law and its Regulation in brief
The law was published in the Official Gazette (no. 39 bis (d), 3 October 2018) and its Executive Regulation in Al-Waqa'i' al-Misriya (no. 244 cont. (b), 31 October 2019). Many of its rules distinguish «works contracts» from «other contracts» (supply and services), with different limits and rates. The law and its Regulation may be amended, so always check the text in force when you sign.
This guide summarises, in our own words, the articles that matter to a contractor during execution and payment; it does not cover tendering and award. The text published in the Official Gazette and Al-Waqa'i' al-Misriya governs.
The articles that matter to a contractor
| Article | Subject | What it means in practice |
|---|---|---|
| Law art. 44 | Advance payment | Paid with the competent authority's approval against an unconditional bank guarantee of the same value and currency, provided the tender conditions state its rate and uses; recovered from payments, with the guarantee reduced in proportion. |
| Regulation art. 92 | Advance rates | Up to 25% of the contract value, up to 50% for medium, small and micro enterprises; the Minister of Finance may allow more before tendering. If the tender conditions state no rate there is no advance, a bid asking for more is excluded, and no price adjustment is paid on purchases funded by it. |
| Law art. 45 | Paying certificates | Payments on account within 60 days of submitting a complete certificate. If it is refused, the contractor may send it by express mail and the clock starts on receipt. Late payment carries a financing cost at the Central Bank credit and discount rate at the time, against official documents. (Supply and services: within 30 days of inspection, acceptance and approval.) |
| Regulation art. 93 | What a certificate pays | 95% of the value of conforming work done is paid and 5% is held until provisional taking-over, or released earlier against a guarantee expiring 30 days after it. 75% of the value of permanent materials delivered is paid after a count. After provisional taking-over the final statements are drawn up; after final taking-over the final account is settled and the final security returned. |
| Law art. 46 and Regulation art. 96 | Quantity changes | Each item may rise or fall by up to 25% in works contracts (15% in other contracts) at the same rates, under conditions including a provision in the tender conditions, the competent authority's approval and budget cover, and only during the execution period, not the guarantee period, with the duration adjusted. |
| Law art. 47 and Regulation art. 97 | Price adjustment | Mandatory for works contracts of six months or more, every three contractual months, on producer price indices; any contrary agreement is void. Differences are paid within 60 days of the claim, and the certificate is not held back for them. |
| Law art. 48 and Regulation art. 98 | Delay charges | An extension without charge if the delay is beyond the contractor's control. Otherwise a delay charge runs from the start of the extension: in works contracts capped at 10% if the delay is within 10% of the duration, and 15% beyond it, on the value of the delayed work if it does not prevent use of what was done, otherwise on the final account. |
| Regulation art. 99 | Failure to take over | If the public body does not take over conforming work on time, the contractor may request a neutral committee, formed within 7 days, whose report, due within 30 days of its formation, binds both parties. |
How the delay charge is worked out in works contracts
Regulation art. 98 in summary: a delay of up to 1% of the total duration carries 1%; the rate then rises with the delay share itself up to 10% at a 10% delay; beyond a 10% delay it becomes 15%. Illustrative example: a 400-day contract, delayed work worth EGP 2,000,000 that does not prevent use of what was done.
| Delay (days) | Share of the duration | Delay charge rate | Charge (EGP) |
|---|---|---|---|
| 2 | 0.5% | 1% | 20,000 |
| 20 | 5% | 5% | 100,000 |
| 50 | 12.5% | 15% | 300,000 |
Your contract's method, rounding and base govern. If the delay is beyond your control, ask for the extension in writing before any charge is applied.
Terms you will need
| Term | Meaning as summarised from Regulation art. 97 |
|---|---|
| Execution period | Counted from the latest of: handing over a site free of obstacles, the contractor receiving the advance, or receiving the approved drawings needed to start. |
| Variable items | Items or their inputs subject to price adjustment, named by the contracts department in the tender documents from the list prepared by the Ministry of Housing. |
| Coefficient | The weight the contractor states in the bid for each variable item or input; never zero, and the coefficients of an item total less than 100%. |
| Rate of increase or decrease | The index at the time of accounting less its value at the opening of the technical envelopes, divided by the value at opening. |
Unlike FIDIC, the law and its Regulation set no period for notifying, detailing or answering claims, so those periods are whatever the contract agrees.
Worked example: what a public-contract certificate pays
A certificate with conforming work done worth EGP 1,000,000, plus permanent materials delivered to site with a scheduled value of EGP 200,000 after the count. Figures are illustrative; the rates are from Regulation art. 93.
| Line | Amount (EGP) |
|---|---|
| Paid on work done (95%) | 950,000 |
| Held until provisional taking-over (5%) | 50,000 |
| Paid on materials delivered (75%) | 150,000 |
| Total paid before other deductions | 1,100,000 |
Then whatever the contract provides is deducted, such as advance recovery and taxes. If the complete certificate is submitted at the start of a month, payment is due within 60 days of submission, and any later payment carries the financing cost.
Practical steps for a contractor on a public contract
- Before bidding: read the advance rate and uses and the variable items in the tender conditions, and put your coefficients in the technical envelope.
- Record the dates of site handover, advance receipt and approved drawings, since the execution period runs from them.
- Submit every certificate complete with its documents, keep proof of the submission date, and use express mail if it is refused.
- Track the 60 days for each certificate and claim the financing cost for late payment with official documents.
- Submit the price adjustment claim every three contractual months, separately from the certificate.
- If you are delayed for reasons beyond your control, ask for an extension in writing.
- At completion request provisional taking-over and recover the retention; if the public body fails to take over, request the neutral committee.
- After final taking-over settle the final account and recover the final security.
How to do it in Ta3mir
When you create a project in Ta3mir you choose the contract type: public under Law 182, FIDIC, or custom. Ta3mir fills the contract terms with guide values to check with your contracts adviser, and every value stays editable per project.
- Review, approval and payment periods, the quantity change limit, advance and recovery, retention, the delay-charge cap and price adjustment.
- A due date for every approved certificate from the contract's payment period, with overdue bands in receivables.
- A warning when quantities pass the contract's variation limit.
- An in-app contracts reference: Ta3mir's own-words summaries of Law 182, its Regulation and FIDIC 2017, with periods, percentages and the payment flow.
Sources
- Law 182 of 2018 on contracts made by public bodies (Official Gazette no. 39 bis (d), 3 October 2018)
- Executive Regulation, Minister of Finance Decree 692 of 2019 (Al-Waqa'i' al-Misriya no. 244 cont. (b), 31 October 2019)
This guide is an explanatory summary written by the Ta3mir engineering team. It is not the text of the law or of any contract and it is not legal advice. Figures in the examples are illustrative. Your contract and the officially published text govern, so check them with a contracts adviser before acting.