Article 35 of the Saudi Government Tenders and Procurement Law
المادة 35 من نظام المنافسات والمشتريات الحكومية · الفصل السابع: توطين الصناعة ونقل المعرفة
The article allows the Local Content and Government Procurement Authority, on its own initiative or at a government entity's request and with the Ministry of Finance's approval, to contract for localizing an industry and transferring knowledge.
Official text (Arabic)
This article has not been amended since the law was issued.
للهيئة من تلقاء نفسها أو بناءً على طلب من إحدى الجهات الحكومية -بعد موافقة الوزارة- التعاقد على توطين صناعة ونقل معرفة وفقاً للضوابط التي تحددها اللائحة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 35 explained in plain English
This article concerns a special type of contracting: contracting to localize an industry and transfer knowledge. The body authorized to do it is not any government entity, but the Authority, which under the definition in Article 1 is the Local Content and Government Procurement Authority.
This contracting is set in motion in one of two ways:
- The Authority takes the initiative itself.
- Or it is at the request of a government entity.
In both cases the text requires the approval of the Ministry, that is, the Ministry of Finance under the definitions. The article refers to the Implementing Regulations the setting of the controls for this contracting, so it does not itself state its conditions, scope or duration.
In practice, the point is that some government procurement can be used to build industrial and knowledge capability inside the Kingdom, instead of merely buying the finished product from abroad. It is one of the special contracting methods the Law regulates, like the electronic reverse auction in Article 34 and the competition in Article 36.
Local or foreign companies interested in this type of contract need to know the controls the Implementing Regulations set, and can therefore consult a lawyer who specializes in administrative disputes and government contracts or a lawyer in investment matters.
Practical example
A government entity asked the Local Content and Government Procurement Authority to contract for localizing the manufacture of spare parts it needs regularly instead of importing them. With the approval of the Ministry of Finance, the Authority contracted with a company for localization and knowledge transfer under the controls the Implementing Regulations set.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 35 of the Saudi Government Tenders and Procurement Law
Who has the authority to contract for localizing industry and transferring knowledge?
The Local Content and Government Procurement Authority, on its own initiative or at the request of a government entity.
Is another body's approval required for a localization contract?
Yes. The text requires the approval of the Ministry of Finance.
Where are the conditions for industry localization contracts?
The article refers to the controls set by the Implementing Regulations of the Law.
More articles on Framework Agreements and Reverse Auctions
- Article 14
The article sets the powers of the unified procurement entity, including consolidating common procurement, concluding framework agreements, reviewing feasibility studies, preparing forms and training.
دون إخلال باختصاص الهيئة العامة للصناعات العسكرية، وتنفيذاً لأحكام النظام؛ تختص الجهة المختصة بالشراء الموحد بما يلي: 1- تحديد الأعمال والمشتريات التي تحتاج إلي
- Article 15
The article requires entities to buy what is on the unified procurement lists through its framework agreements unless it approves otherwise, and to submit feasibility studies and tender documents to it before putting them out, with specific exceptions.
1- لا يجوز للجهة الحكومية تأمين المشتريات أو تنفيذ الأعمال الواردة في القوائم التي تعدها الجهة المختصة بالشراء الموحد إلا من خلال الاتفاقيات الإطارية التي أبرمت
- Article 33
The article allows the government entity to conclude a framework agreement with the winner of the tender if quantities, the volume of works or services, or the time of execution cannot be determined.
للجهة الحكومية إبرام اتفاقية إطارية مع من رست عليه المنافسة تتضمن الأحكام التي سيجري في إطارها تنفيذ العقد، وذلك في الحالات التي يتعذر فيها تحديد كميات الأصناف
- Article 34
The article allows the government entity to use the electronic reverse auction on conditions: detailed specifications, a competitive market, bids received and ranked automatically through the portal, set dates, and information given to competitors.
للجهة الحكومية استخدام أسلوب المزايدة العكسية الإلكترونية وفقاً لما توضحه اللائحة، مع مراعاة الآتي: 1- أن تعد الجهة الحكومية مواصفات فنية مفصلة. 2- أن يكون هناك
- Article 36
The article allows the government entity to contract for the best idea and design or other intellectual property rights by way of a competition, as the Implementing Regulations explain.
للجهة الحكومية أن تتعاقد على أفضل فكرة وتصميم، أو غيرها من حقوق الملكية الفكرية، عن طريق أسلوب المسابقة، وفقاً لما توضحه اللائحة.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.