Government Tenders and Procurement Law and its Executive Regulation

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  • Royal Decree No. (M/128) dated 13/11/1440H

  • Royal Decree

  • By the grace of God Almighty

  •                 We, Salman bin Abdulaziz Al Saud

  •                                                 King of the Kingdom of Saudi Arabia

  • Based on Article (70) of the Basic Law of Governance, issued by Royal Order No. (A/90) dated 27/8/1412H.

  • And based on Article (20) of the Council of Ministers Law, issued by Royal Order No. (A/13) dated 3/3/1414H.

  • And based on Article (18) of the Shura Council Law, issued by Royal Order No. (A/91) dated 27/8/1412H.

  • And after reviewing the decisions of the Shura Council No. (117/32) dated 20/7/1440H, and No. (188/48) dated 21/10/1440H.

  • And after reviewing the decision of the Council of Ministers No. (649) dated 13/11/1440H.

  • We decree the following:

    • First: Approval of the Government Procurement and Competitions Law, in the accompanying form.

    • Second: Continuation of the provisions of Articles (61, 62, and 63) of the Government Procurement and Competitions Law, issued by Royal Decree No. (M/58) dated 4/9/1427H, and Chapter (19) of its Implementing Regulation related to the organization of rules for leasing and investing government real estate and related provisions, until the issuance of the specific law for leasing and investing real estate and its implementation.

    • Third: Continuation of the committee formed under Article (78) of the Government Procurement and Competitions Law, issued by Royal Decree No. (M/58) dated 4/9/1427H, to consider the claims for compensation from contractors and suppliers and to prevent dealings with them, which were registered with it before the enforcement of the law mentioned in item (First) of this decree, until the committee makes a final decision on those claims. In the event of the cancellation of any decision made by the committee regarding the claims for compensation from contractors and suppliers, the competent court shall consider the case and make a final ruling.

    • Fourth: Consideration of requests for contract extensions and addressing delays in implementation for cases prior to the issuance of the law, according to its provisions. The Ministry of Finance shall complete any previous requests made before the issuance of the law according to the procedures previously in place.

    • Fifth: With due regard to what is stated in item (Fourth) of this decree, the law shall apply to works and procurements that were tendered before its enforcement according to a mechanism established by the Minister of Finance, without prejudice to the procedures taken regarding those works and procurements before its enforcement.

    • Sixth: Delegation of the following powers to the Minister of Finance:

      • Approval of the mechanism for making available and applying contracting and procurement methods and models of competition documents and standards stipulated in the law, and the Minister of Finance has the authority to extend the period for another year based on his assessment of the readiness of government entities for implementation by the end of the first period. Approval of the continuation of applying exceptions regarding Vision Realization Programs from the application of the law, for a period ending at the end of the next fiscal year, provided that the Minister of Finance, in agreement with the Strategic Management Office at the Council of Economic and Development Affairs, submits to the Council of Ministers, at least six months before the end of the mentioned period, a proposal regarding the continuation of applying the controls after the end of the period.

    • Seventh: Notwithstanding the provisions of Article (99) of the law, the provisions of paragraph (4) of Article (17) of the law shall be effective from the date of its issuance.     

    • Eighth: His Highness the Deputy Prime Minister, ministers, and heads of relevant independent agencies - each in their respective capacity - shall implement this decree.

  • Salman bin Abdulaziz Al Saud

 

  • In the name of God, the Most Gracious, the Most Merciful

  • Decision of the Council of Ministers No. (649) dated 13/11/1440H

  •  

  • The Council of Ministers

  • After reviewing the transaction received from the Royal Court No. 60677 dated 25/10/1440H, which includes a letter from His Excellency the Minister of Finance No. 3862 dated 11/5/1439H, regarding the draft Government Procurement and Competitions Law, for which the Shura Council issued Decision No. (117/32) dated 20/7/1440H, and No. (188/48) dated 21/10/1440H.

  • And after reviewing the mentioned draft law.

  • And after reviewing the Government Procurement and Competitions Law, issued by Royal Decree No. (M/58) dated 4/9/1427H.

  • And after reviewing the minutes No. (180) dated 1/2/1440H, and No. (1532) dated 23/8/1440H, and the memorandum No. (1940) dated 8/11/1440H, prepared by the Bureau of Experts at the Council of Ministers.

  • And after considering the decisions of the Shura Council No. (117/32) dated 20/7/1440H, and No. (188/48) dated 21/10/1440H.

  • And after reviewing the recommendation of the General Committee of the Council of Ministers No. (7061) dated 12/11/1440H.

  • It is decided as follows:

    • First: Approval of the Government Procurement and Competitions Law, in the accompanying form.

    • Second: Continuation of the provisions of Articles (61, 62, and 63) of the Government Procurement and Competitions Law, issued by Royal Decree No. (M/58) dated 4/9/1427H, and Chapter (19) of its Implementing Regulation related to the organization of rules for leasing and investing government real estate and related provisions, until the issuance of the specific law for leasing and investing real estate and its implementation.

    • Third: Continuation of the committee formed under Article (78) of the Government Procurement and Competitions Law, issued by Royal Decree No. (M/58) dated 4/9/1427H, to consider the claims for compensation from contractors and suppliers and to prevent dealings with them, which were registered with it before the enforcement of the law until a final decision is made on those claims.

    • Fourth: Consideration of requests for contract extensions and addressing delays in implementation for cases prior to the issuance of the law, according to its provisions. The Ministry of Finance shall complete any previous requests made before the issuance of the law according to the procedures previously in place.

    • Fifth: With due regard to what is stated in item (Fourth) of this decision, the law shall apply to works and procurements that were tendered before its enforcement according to a mechanism established by the Minister of Finance, without prejudice to the procedures taken regarding those works and procurements before its enforcement.

    • Sixth: Delegation of the following powers to the Minister of Finance:

      • Approval of the mechanism for making available and applying contracting and procurement methods and models of competition documents and standards stipulated in the law, and the Minister of Finance has the authority to extend the period for another year based on his assessment of the readiness of government entities for implementation by the end of the first period. Approval of the continuation of applying exceptions regarding Vision Realization Programs from the application of the law, for a period ending at the end of the next fiscal year, provided that the Minister of Finance, in agreement with the Strategic Management Office at the Council of Economic and Development Affairs, submits to the Council of Ministers, at least six months before the end of the mentioned period, a proposal regarding the continuation of applying the controls after the end of the period.

    • Seventh: Notwithstanding the provisions of Article (99) of the law, the provisions of paragraph (4) of Article (17) of the law shall be effective from the date of its issuance.     

    • A draft royal decree has been prepared in this regard, the text of which is attached.

    • Eighth: Companies in which the state owns more than (51%) of the capital shall adhere to the general principles and rules for tendering and executing works and procurements in a manner that achieves integrity and transparency and obtains fair competitive prices, giving preference to local content and small and medium enterprises according to controls prepared by the Public Investment Fund in coordination with the General Organization for Social Insurance and the General Organization for Retirement.

    • Ninth: The Ministry of Finance shall coordinate with the Local Content and Government Procurement Authority when undertaking the following:

      • Setting policies, issuing directives, instructions, and guidelines related to the implementation of the provisions of the law and regulation or making any amendments to them, according to subparagraph (b) of paragraph (1) of Article (13) of the law. Preparing the Implementing Regulation of the law or making any amendments to it.

    • Tenth: The competent authority for unified procurement mentioned in the law shall be the Center for Achieving Spending Efficiency.

  • Prime Minister

 

Chapter 1: General Provisions

Article 1

  • In this Law, the following terms shall have the meanings assigned thereto unless the context requires otherwise:

    • Law: Government Tenders and Procurement Law.

    • Regulations: Implementing Regulations of the Law.

    • Minister: Minister of Finance.

    • Ministry: Ministry of Finance.

    • Authority: Local Content and Government Procurement Authority.

    • Unified Procurement Agency: The agency in charge of unified strategic procurement which is determined pursuant to a resolution by the Council of Ministers.

    • Government Agencies: Ministries, government bodies, public agencies, authorities, and institutions, and other entities with an independent public corporate personality.

    • Head of Government Agency: Minister, president, governor, or principal officer of a government agency.

    • Portal: The electronic portal designated for government procurements which is under the Ministry’s supervision.

    • Framework Agreement: An agreement between one or more government agencies and one or more suppliers, contractors, or operators, that includes the terms and conditions of contracts awarded during a specific period.

    • Electronic Reverse Auction: An electronic method which allows for bids to be submitted successively within a given period in order to select the lowest offer.

    • Consultancy Services: Services of a professional or consultative nature, such as accounting and legal services, which include, but are not limited to, conducting research and studies, and developing and supervising the implementation of specifications, schemes, and designs.

    • Pre-Qualification: Measures taken by a government agency to ensure that a bidder, prior to submitting his proposal, is qualified to carry out the required works and procurements.

    • Post-Qualification: Measures taken by a government agency, upon selecting the best proposal and prior to awarding the tender, to ensure that the selected bidder is qualified to carry out the required works and procurements.

    • Suspension Period: A period for deciding appeals submitted by bidders which starts from the date of notifying them of the winning proposal.

    • Emergency: A state wherein the risk to public safety, security, or health is serious and unforeseen; involves an abrupt disorder that may cause loss of life or property; and which cannot be addressed through regular tendering procedures.

    • Urgency: A case where it is crucial for works and procurements to be carried out in a short period of time to ensure that government agencies operate efficiently.

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Article 2

  • This Law aims at:

    • 1. regulating procedures relating to works and procurements, and preventing abuse of power and conflict of interest to protect public funds;

    • 2. achieving optimal value of public funds when concluding contracts of works and procurements, and implementing them at fair and competitive prices;

    • 3. promoting integrity and competitiveness, maintaining equality, and ensuring fair treatment of bidders, in fulfillment of the principle of equal opportunity;

    • 4. maintaining transparency in all procedures related to works and procurements; and

    • 5. fostering economic growth and development

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Article 3

  • 1. Government agencies shall, in carrying out their works and procurements, only contract licensed persons, subject to applicable laws and regulations.

  • 2. Government agencies shall, before contracting foreign persons to carry out procurements or works inside the Kingdom, ensure the unavailability of more than one local person qualified to carry out said works or procurements. The Regulations shall specify the terms and conditions for implementing the provisions of this paragraph.

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