A new draft bill circulated by the Ministry of Finance seeks to deal with the worrying phenomenon that has steadily spread in recent years in public tenders: the involvement of crime organizations in government and public procurement processes.
Under the proposed legislation, Accountant General Yali Rothenberg will be in charge of a mechanism that will make it possible “to disqualify suppliers and prevent them from contracting with public bodies.” A committee for examining suppliers will operate, headed by a senior official in the Accountant General’s Office. The committee will make recommendations for the disqualification of suppliers on the basis of opinions submitted by the police. The final decision will require approval by the accountant general himself. An important innovation in the bill is the ability to act against companies connected to criminal elements, even if the companies themselves are not directly involved in criminal activity.
The state carries out procurement deals and allocations of land to a value of more than NIS 120 billion annually. It is estimated that billions of shekels find their way into criminal hands. “There is in Israel a phenomenon of involvement, and even control, of criminal elements in tenders in various areas by public bodies, including in local government, especially in Arab communities,” the Ministry of Finance explained, on the basis of data presented by the police. “In recent years, increasing involvement by criminal elements both in State of Israel infrastructure tenders and in land transactions has been identified.”
If the legislation passes the Knesset, any supplier seeking to contract with a public body will have to present authorization from the accountant general in the Ministry of Finance certifying that there is no bar to transacting with him. The supplier’s chief sub-contractors will also have to pass a similar check. The check will be based on an opinion from the police, and the committee for examining suppliers will make its decision after giving the supplier an opportunity to argue his case.
The draft bill specifies the areas to which it will apply, where there is apparently significant involvement by criminal elements: construction and infrastructure; security and guard services; contracting and project management in construction and rehabilitation; transport; waste treatment; and land allocation.
When it comes to land, the law will apply only to commercial deals and not to the purchase of individual private dwellings. Specifically, it will apply to deals consisting of more than four housing units, or an area of more than half a dunam (500 square meters), or with a value of over NIS 5 million.
A decision to disqualify a supplier will be valid for three years.
The bill is part of a broader set of measures to combat organized crime in Israel, among them an amendment to the law on registration of contractors, regulation of the waste treatment market, and disqualification of contractors involved in crime in the inter-ministerial committee on outsourcing government work. Together, these measures are intended to create what the bill calls “comprehensive regulatory continuity” to combat the penetration of criminal elements into positions of influence in the Israeli economy.
Published by Globes, Israel business news – en.globes.co.il – on May 19, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
