Dubai lays the foundations for increased government outsourcing

The rules, which came into effect in March, allow greater outsourcing of public services as part of a drive by the Dubai government for greater collaboration between public and private sectors.

The new rules will also drive Emiratization with a requirement that service providers employ at least one UAE national for every non-UAE employee.

“The new rules should enable greater opportunities for service providers looking to strengthen their position with the Dubai government,“ said Martin Hayward, an outsourcing expert with Pinsent Masons in the UAE.

Dubai’s Department of Finance will oversee the outsourcing process, which includes strict rules on how the new outsourcing deals will operate, including length of contracts and financial terms. The rules set out the contract terms that will need to be in place between the Dubai government entity and the service provider.

Dubai government entities will be required to assess any potential strategic risks and the impact that outsourcing might have on service quality before entering into any outsourcing arrangements. They must monitor service provider performance to ensure the achievement of efficiency gains and end user satisfaction.

Service providers will be required to align with Dubai’s data protection and confidentiality requirements issued by the Dubai Digital Authority and the Dubai Electronic Security Centre.

Government departments and service providers will have three years, until March 2029, to comply with the requirements of the new law.

“These new rules represent the latest reform to Dubai’s landscape for government contracting, following in the wake of the 2022 digital services regulations and 2020 contracts law,” added Alexandra Aikman, a senior commercial contracts specialist at Pinsent Masons.