The regulation for public administrations contracting with companies that do not have a regional office in the Kingdom, recently approved by the Council of Ministers, confirmed that it is not permissible for public administrations, in carrying out their business and insuring their purchases, contract with companies that do not have a regional office in the Kingdom or any related party except in accordance with its provisions.
The controls specified the cases in which government bodies will be able to contract with companies that do not have a regional office in the Kingdom, provided that business and purchases whose estimated cost does not exceed one million riyals or which are carried out outside outside the Kingdom excluded from the application of these controls.
The following are the most important of these regulations, which will take effect 6/19/1445 AH:
Control goals
The controls aim to regulate the contracting of public bodies with companies that do not have a regional headquarters in the Kingdom, or with any related party.
Mandatory checks
Article 4 of the controls provides that it is not permitted for public bodies – in carrying out their work and in ensuring their purchases – to contract with companies that do not have a regional office in the Kingdom or any related party except in compliance with the provisions by art. the controls. All government agencies are obliged to implement controls, whether they are subject to the provisions of the Government Procurement and Procurement Act or any other law or regulation, and the controls are complementary to the provisions applied by government agencies in carrying out their work and guaranteeing their purchases .
Exceptions and allow concurrency
Article 4 of the controls provides that deals and purchases whose estimated cost does not exceed one million riyals are excluded from controls. The Minister may, for reasons of public interest, order the modification of this amount, suppress this derogation or temporarily suspend its activity. Works and purchases that are carried out outside the Kingdom are also excluded.
Article six stated that these controls do not prevent companies which do not have a regional office in the Kingdom or any related party from bidding for any open competition offered by any of these agencies, provided that such agencies do not accept submissions from those companies or related parties, unless in either case: there is more than one technically acceptable offer and the offer submitted by the company not having a regional office in the Kingdom or by the interested party is the best offer, after the full technical valuation, and is financially less than 25% or more of the value of the Second Best Offer.
Prepare a list of companies
The control statute obliges the Ministry of Investments, in coordination with the Ministry and the General Authority for Foreign Trade, on the basis of rules and controls to be agreed, to list the names of companies that do not have a regional office in the Kingdom. The list is periodically updated – or whenever the need arises – and published on the portal.
Cases in which it is permitted to invite companies to compete
Article 7 of the controls stipulates that government agencies cannot invite companies that do not have a regional office in the Kingdom or any related party to participate in the restricted competitions they offer, except in one of two cases: There is no more than one qualified competitor other than companies that do not have a regional office in the Kingdom or related parties to conduct business or secure required purchases, or the existence of an emergency situation which can only be addressed by inviting businesses that do not have a regional office in the Kingdom or related parties.
Cases where contracts with companies are available
Article 8 of the checks confirmed that it is unlawful for governments to invite businesses which do not have a regional office in the Kingdom or any related party to contract directly with them except in one of two cases: that the works or purchases are exclusively disposition of the company which does not have a regional office in the Kingdom or of the affected person, or the existence of an emergency situation which can only be dealt with by direct bargaining with the company which does not have a regional office in the Kingdom or the interested party.
Obligations imposed on public entities
The articles stipulate that government agencies contracting with any company that does not have a regional office in the Kingdom or a related party – in accordance with the legislation – must prepare a report including the reasons for the contract, and provide the Public Audit Office and to the Authority for efficiency in spending and state works with a copy of the same, within a term not exceeding 30 working days from the date of signing the contract.
Formation of a contracting commission
On the basis of these controls, a committee called the “Committee for exemption from the procurement regulations of Public Administration Bodies with Companies that do not have a Regional Headquarters in the Kingdom and Related Parties” will be set up, linked to the Ministry of Local Procurement and Public Administration, one representative of the Authority for Governmental Spending and Project Efficiency, one representative of the Committee for Emiratisation and Balance of Payments and a number not exceeding three members with experience and expertise to be appointed by decision of the Minister in agreement with the Minister of Investments, and the rank of government agency representatives shall be no lower than rank 14 or Equivalent, provided that the committee selects government agency representatives from among its members to serve as vice chair, provided that the committee is competent to consider requests from government agencies for esc to remove companies which do not have a regional office in the Kingdom and related parties from controls, and to deliberate on the matter.
Exception Request Procedures
The checks confirmed that public bodies should apply to the committee for exclusion from the checks for a project or projects or for a certain period of time of a company that does not have a regional office in the Kingdom or of a related party, provided that The application is submitted before the competition or direct procurement procedures start.
The request must contain the name of the company which does not have a regional office in the Kingdom or of the interested party to be excluded, the reasons and justifications for the request, the studies or supporting reports, the project or projects in question, or the period of time of the same, the goods and services in question and the estimated cost For contracts whose conclusion is envisaged upon approval of the application, provided that the Committee decides on the application, accepting or rejecting it, depending on what believes it is in the public interest.
