Article 9 of the Saudi Government Tenders and Procurement Law
المادة 9 من نظام المنافسات والمشتريات الحكومية · الفصل الثالث: المبادئ الأساسية
The article gives priority in dealing to local small and medium enterprises, local content and companies listed on the financial market, and refers the mechanism to the preference regulation mentioned in Article 96.
Official text (Arabic)
This article has not been amended since the law was issued.
تكون الأولوية في التعامل للمنشآت الصغيرة والمتوسطة المحلية وللمحتوى المحلي، وللشركات المدرجة في السوق المالية. وتوضح اللائحة المشار إليها في الفقرة (3) من المادة (السادسة والتسعين) من النظام آلية ذلك.
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 9 explained in plain English
This article sets priority in dealing with government entities for three categories:
- Local small and medium enterprises.
- Local content.
- Companies listed on the financial market.
How is the priority applied? The article does not detail this but refers to the regulation referred to in paragraph (3) of Article 96. According to that paragraph, the Ministry prepares a regulation for preferring local content, local small and medium enterprises and listed companies, jointly with the Authority, the General Authority for Small and Medium Enterprises and the Capital Market Authority, to include:
- Mechanisms for preferring local content and how it is calculated and applied, including a preference percentage in the technical and financial evaluation of bids or a mandatory percentage of local content out of the contract's total value.
- The mechanism for preferring local small and medium enterprises and listed companies, including a preference percentage in evaluating bids, a specified price range, or a percentage of the total value of contracts.
- The fines for contractors' failure to meet local content requirements.
Article 96 mentions these tools as options the regulation includes, without setting the percentages themselves; the amount of the preference is known from the regulation, not from the Law. The Authority means the Local Content and Government Procurement Authority, according to Article 1.
This priority comes with the control in Article 8 that limits contracting to actual needs and at fair prices not exceeding market prices. An enterprise that wants to know how far it benefits from the preference may consult a lawyer who specializes in government contracts and administrative disputes.
Practical example
A Saudi small enterprise in Qassim that produces office supplies locally is competing with a foreign company in a government tender. This article gives priority to local small and medium enterprises and to local content, and the preference regulation referred to in Article 96 is consulted to learn how this preference is calculated in evaluating its bid.
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 9 of the Saudi Government Tenders and Procurement Law
Do small and medium enterprises have priority in government tenders?
Yes. The article gives priority in dealing to local small and medium enterprises, and the regulation referred to in paragraph (3) of Article 96 explains the mechanism.
What is the preference percentage for local content?
The Law does not set the percentage; Article 96 provides that the preference regulation includes a preference percentage in evaluation or a mandatory percentage of local content, and the amounts are known from the regulation.
Are there fines for not meeting local content requirements?
Article 96 provides that the preference regulation includes the fines for contractors' failure to meet local content requirements.
Articles this article refers to
More articles on General Provisions and Principles of Government Tenders
- Article 1
The article defines the key terms used in the Government Tenders and Procurement Law, such as government entities, the portal, the framework agreement, qualification, the standstill period, and emergency and urgent cases.
يقصد بالعبارات والمصطلحات الآتية -أينما وردت في هذا النظام- المعاني الموضحة أمام كل منها، ما لم يقتض السياق خلاف ذلك: النظام: نظام المنافسات والمشتريات الحكومية
- Article 2
The article sets out the Law's objectives: regulating procedures for works and procurement and preventing abuse of influence, achieving the best value for public funds, and promoting integrity, equality, transparency and economic development.
يهدف النظام إلى الآتي: 1- تنظيم الإجراءات ذات الصلة بالأعمال والمشتريات، ومنع استغلال النفوذ وتأثير المصالح الشخصية فيها؛ وذلك حماية للمال العام. 2- تحقيق أفضل
- Article 3
The article requires government entities to deal only with licensed persons, and, when dealing with foreigners inside the Kingdom, to first confirm that there is not more than one qualified local person.
1- تتعامل الجهات الحكومية عند تنفيذ أعمالها وتأمين مشترياتها مع الأشخاص المرخص لهم بذلك، طبقاً للأنظمة والقواعد المتبعة. 2- على الجهة الحكومية عند تعاملها مع أش
- Article 4
The article provides that everyone who meets the conditions for dealing with a government entity is given equal opportunities and treated on an equal footing with others.
يعطى جميع الأشخاص الراغبين في التعامل مع الجهة الحكومية، ممن تتوافر فيهم الشروط التي تؤهلهم لهذا التعامل؛ فرصاً متساوية ويعاملون على قدم المساواة.
- Article 5
The article requires clear, unified information about the required works and procurement to be provided to competitors, and requires that they be able to obtain it at a set time.
تُوفَر للمتنافسين معلومات واضحة وموحدة عن الأعمال والمشتريات المطلوبة، ويمكَنون من الحصول عليها في وقت محدد.
- Article 6
The article subjects public tenders to three principles: openness, transparency and equal opportunity.
تخضع المنافسة العامة لمبادئ العلانية والشفافية وتكافؤ الفرص.
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.