Gentlemen/ Members of the chamber
Greetings,
Asharqia Chamber extends its best regards to you, and informs you that it has received the letter of the Federation of Saudi Chambers of Commerce No. (45515074/1) dated (13/7/1446 AH), which refers to the letter of the Ministry of Municipalities and Housing No. (4600211977/3) dated (5/7/1446 AH), regarding the Contractors Classification System issued by Royal Decree No. (M/9) dated (18/1/1443 AH) and what is stated in Article (3) thereof, which states: “Government agencies, bodies, institutions and agencies with a public legal personality may not award or accept any offer or bid for any project subject to classification unless the contractor is classified and the project falls within the field, activity and degree in which the contractor was classified,” and referring to paragraph (1) of Article (71) of the Government Tenders and Procurement System, which states:
The contractor may not subcontract with another contractor, contractor or supplier without obtaining written approval from the government agency, and it specifies The Regulations of Subcontracting Conditions and Controls, and Article (18) of the Executive Regulations of the Government Tenders and Procurement System, which states:
Taking into account what is stated in Article (71) of the System, the following is required for subcontracting:
Obtaining the prior approval of the government entity before contracting.
The contracts concluded with subcontractors shall include the quantities and works assigned to them and the prices of contracting with them in accordance with the requirements, conditions and specifications of the project.
The subcontractor shall not be one of the persons referred to in Article (14) of the Regulations, and shall be licensed in the works contracted to be implemented and classified in the field and at the required level if the works are among those that require classification and shall have the qualifications and capabilities sufficient to implement those works.
The percentage of works and purchases assigned to the subcontractor shall not exceed (30%) of the contract value.
Whereas the Ministry is in the process of updating the mechanism for classifying contractors and engineering consulting offices, and is also working on adding new criteria, including the “performance record” to evaluate the previous work of the establishment requesting classification and the establishment’s role in implementing the project (main, subcontractor, solidarity), the Ministry will not approve any subcontractor project in the performance record of establishments unless prior approval for the subcontracting from the government entity is attached.
