The Saudi Council of Ministers has approved regulations in KSA for government agencies’ contracts with non-regional companies and related parties.
Which aims to provide equal opportunities for competition. And to increase the participation of Saudi companies in business enterprises and government initiatives.
Basically, the following are the regulations that will take effect on January 1, 2024:
- Excluding transactions and projects with estimated costs under one million riyals or fewer.
- Excluding transactions and ventures conducted outside the Kingdom.
- The exception’s time frame can only last for a maximum of three years.
- No technically feasible offer exceeds (by 25%) or by over the value of the second-best offer.
- The only companies that qualify as competitors are those without a regional headquarters located within the Kingdom.
- There is an emergency that requires the participation of pertinent parties or businesses without a regional office in the Kingdom.
- Only the company without a regional headquarters in the Kingdom or the relevant party may conduct business or make purchases.
- If an emergency arises that can only be resolved by direct contracting with the relevant party, or the company without a regional headquarters in the Kingdom.
The Regulations’ Significance
As part of its efforts to establish fair competition between Saudi and foreign companies, the Kingdom is demonstrating its dedication to bolstering the position of Saudi companies in the domestic economy by implementing these new regulations.
Additionally, the regulations in KSA help the Kingdom realise its Vision 2030 goals, which include raising the private sector’s share of GDP to 65%.
Anticipations are that the new regulations will help Saudi companies engage more in government projects and activities, boosting the country’s economic growth and creating jobs for citizens.
Given that they will be able to gain the experience and expertise required to offer top-notch services and goods, the controls will also help Saudi businesses become more competitive in international markets.