New system favors local firms

The new Government Procurement and Competition System has come into effect following its publication in the Official Gazette, with the aim of regulating public spending, increasing transparency, and promoting competition. The system requires government entities to prepare an annual procurement plan at the beginning of each fiscal year, enabling the market and companies to better prepare and reducing unplanned practices. It also emphasizes prioritizing local content and small and medium-sized enterprises (SMEs), with mechanisms established to determine priority percentages and incorporate them into the evaluation of bids. Public competition is now established as the primary basis for procurement, with the limit for direct purchases raised to one million Riyals. Priority is given to local SMEs. Offers that are low in price cannot be excluded unless they are more than 25% below the estimated cost; in such cases, bidders must explain the reasons for the low offer and demonstrate the ability to deliver. Additionally, the system specifies a suspension period of between 3 to 10 working days after contract award to allow for objections, with certain exceptions outlined in the regulations.

Size: 120%Text Size

Notice: This Is an AI-Generated Summary

Display The Full Article