The Kingdom of Saudi Arabia announced the regulations of contracting between government agencies in Saudi Arabia and companies that do not have a regional headquarters in the Kingdom.
Official sources revealed the cases in which government agencies will be allowed to contract with companies that do not have a regional headquarters in the Kingdom, with the exception of businesses and purchases whose estimated cost does not exceed one million riyals or those that are carried out outside the Kingdom.
Article VII of the regulations stipulates that government agencies may not invite companies that do not have a regional headquarters in the Kingdom or any other related party to participate in their limited competitions except in one of the following two cases; the absence of more than one qualified competitor other than companies that do not have a regional headquarters in the Kingdom to carry out the business or provide the required purchases, or the occurrence of an emergency that can only be dealt with by inviting companies that do not have a regional headquarters in the Kingdom.
As Article VI states: “Without prejudice to the statutory provisions applied by government agencies while carrying out their business and providing their purchases, the regulations do not prevent companies that do not have a regional headquarters in the Kingdom or any related party from submitting offers for any public competition offered by any of these agencies, provided that these agencies shall not accept what those companies or related parties have offered except in one of two cases. The first case is the absence of more than one technically acceptable offer, and the second case is that the offer submitted by the company that does not have a regional headquarters in the Kingdom or by the related party is the best offer according to the overall evaluation from a technical point of view and is financially less by 25% or more than the value of the second best offer.”
These articles oblige government agencies that contract with any company that does not have a regional headquarters in the Kingdom or with another related party in accordance with the regulations to prepare a report that includes the reasons that prompted them to contract, and to provide the General Audit Bureau and the Expenditure Efficiency and Government Projects Authority with a copy of it, within a period not exceeding 30 working days from the date of signing the contract.
Moreover, the Ministry of Investment is preparing a list of the companies that do not have a regional headquarters in the Kingdom, and is going to update the list periodically or whenever needed, in coordination with the Ministry and the General Authority of Foreign Trade based on standards and controls they agree upon
