Article 96 of the Saudi Government Tenders and Procurement Law
المادة 96 من نظام المنافسات والمشتريات الحكومية · الباب السابع: أحكام ختامية
The Article tasks the Ministry of Finance with preparing three regulations: conflict of interest, conduct of those applying the Law, and preference for local content, small and medium enterprises and listed companies, issued by the Council of Ministers.
Official text (Arabic)
This article has not been amended since the law was issued.
مع مراعاة ما تنص عليه الأنظمة ذات العلاقة، تعد الوزارة الآتي:
1- لائحة لتنظيم تعارض المصالح بشأن تطبيق أحكام النظام واللائحة.
2- لائحة لتنظيم سلوكيات وأخلاقيات القائمين على تطبيق أحكام النظام واللائحة.
3- لائحة تفضيل المحتوى المحلي والمنشآت الصغيرة والمتوسطة المحلية والشركات المدرجة في السوق المالية في الأعمال والمشتريات، وذلك بالاشتراك مع الهيئة والهيئة العامة للمنشآت الصغيرة والمتوسطة وهيئة السوق المالية، على أن تشمل:
أ- آليات تفضيل المحتوى المحلي وكيفية احتسابه وتطبيقه في الأعمال والمشتريات بما في ذلك نسبة أفضلية في التقييم الفني والمالي للعروض أو نسبة إلزامية للمحتوى المحلي من القيمة الإجمالية للعقد.
ب- آلية تفضيل المنشآت الصغيرة والمتوسطة المحلية والشركات المدرجة في السوق المالية في الأعمال والمشتريات بما في ذلك نسبة أفضلية في تقييم العروض أو نطاق سعر محدد أو نسبة مئوية من القيمة الإجمالية للعقود.
ج- الغرامات المترتبة بسبب عدم التزام المتعاقدين لمتطلبات المحتوى المحلي.
يصدر مجلس الوزراء اللوائح المشار إليها في هذه المادة خلال (مائة وعشرين) يوماً، ويعمل بها من تاريخ العمل بالنظام.
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 96 explained in plain English
This Article tasks the Ministry (the Ministry of Finance under Article 1), subject to what the relevant laws provide, with preparing three regulations:
- A conflict of interest regulation on applying the provisions of the Law and the Implementing Regulations.
- A conduct and ethics regulation for those applying the provisions of the Law and the Regulations.
- A preference regulation for local content, local small and medium enterprises and companies listed on the financial market, prepared jointly with the Authority (the Local Content and Government Procurement Authority), the General Authority for Small and Medium Enterprises and the Capital Market Authority, which must 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 local content percentage of the total value of the contract.
- a 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.
The Council of Ministers issues these regulations within 120 days, and they take effect from the date the Law takes effect. The Article does not itself set the percentages or the amounts of the fines, but leaves them to the regulation.
It differs from Article 97, which deals with the Implementing Regulations of the Law, since those are issued by the Minister rather than the Council of Ministers. Enterprises that want to know what they gain from preference or what fines they may face would do well to consult the text of the regulation and a lawyer specialized in administrative cases and government contracts.
Practical example
A small enterprise in Dammam manufactures local products and wants to take part in a government tender. This Article shows that the amount of preference it may receive, whether a percentage in bid evaluation, a price range or a percentage of the contract value, is set by the preference regulation issued by the Council of Ministers, so it should consult that regulation.
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 96 of the Saudi Government Tenders and Procurement Law
Who issues the local content preference regulation in government procurement?
The Ministry of Finance prepares it jointly with the Local Content and Government Procurement Authority, the General Authority for Small and Medium Enterprises and the Capital Market Authority, and the Council of Ministers issues it.
Do small and medium enterprises have preference in government tenders?
The Article provides that the preference regulation includes a mechanism for preferring local small and medium enterprises, including a preference percentage in evaluating bids, a specified price range or a percentage of the value of contracts, and leaves the details to the regulation.
Are there fines for failing to meet local content?
Yes, the Article provides that the preference regulation includes the fines for contractors' failure to meet local content requirements, without stating their amount.
When do these regulations take effect?
The Council of Ministers issues them within 120 days, and they take effect from the date the Law takes effect.
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.