Contracts Purchases Procurement and Implementation OTD

KIANGDOM OF SAUDI ARABIA ‫اململكة العربية السعودية‬
Royal Commission for Jubail and Yanbu

‫الهيئة امللكية للجبيل وينبع‬
KINGDOM OF SAUDI ARABIA

ROYAL COMMISSION FOR JUBAIL AND
YANBU
Regulations of Contracts, Purchases, Procurement,

and
Implementation of Works
Contracts, Purchases, Procurement, and Implementation of Works Regulations 1

Table of Contents
Chapter Title Article Page No.
1 Definitions ……………………………………………….. 1
2 Preparation Of Bid Documents & Advertisement ………. 2-17 3
3 Prequalification ………………………………………….. 18-19 8
4 Regulations for Entering Into Biddings ………………… 20-21 9
5 Submitting Proposals ……………………………….. 22-29 11
6 Bid Opening …………………………………………….. 30-37 15
7 Evaluation Of Bids ……………………………………… 38-46 18
8 Negotiations With Bidders ……………………………… 47-57 21
9 Awarding/Conclusion Of Contracts ……………………. 58-70 25
Execution And Management Of Contracts And Works 71-76 29
10
Schedule ………………………………………………….
11 Increase And Decrease Contractor's Obligations ………. 77-80 31
12 Direct Purchase/Electronic Purchase/Cash Purchase ….. 81-84 33
13 Bank Guarantees ………………………………………… 85-96 34
14 Payment Of the Financial Compensation ……………… 97-102 40
Procurement Of Needs By Leasing Or Replacement Of 103-104 42
15
Systems And Equipment With New Ones ………………
16 Penalties ………………………………………………… 105-121 44
17 Contracts Extension ……………………………………. 122-127 49
18 Withdrawal And Termination Of Work ………………… 128-139 51
19 Works Acceptance ………………………………………. 140-145 56
20 Receipt Of Supplied Items ……………………………… 146-147 58
21 Auctions And Sale Of Movable Assets ………………… 148-160 59
Compensation And Evaluation Of Contractors 161-163 62
22
Performance ……………………………………………...
23 General Provisions………………………………………….. 164-174 63
ts, Purchases, Procurement, and I
Chapter 1
Definitions
Article 1:
Whenever in these Regulations the following terms are used they shall have
the meanings hereinafter indicated unless the text stipulates otherwise:
The Kingdom: Kingdom of Saudi Arabia.
The Royal Commission: The Royal Commission for Jubail and Yanbu.
The Industrial City: Jubail Industrial City, Yanbu Industrial City, Ras Al
Khair Industrial City and future Industrial Cities under the Royal
Commission’s supervision.
Chairman: The Chairman of the Royal Commission for Jubail and Yanbu.
Chief Executive Officer: The Chief Executive Officer at the Headquarter/the
Industrial City.
Contractor: means the Second Party to the contract concluded with the Royal
Commission. Also, may be referred to as the Supplier, Vendor,
Concessionaire, Consultant, Contractor, Investor or Tenant. The
Contractor shall be regarded as one legal entity even if it consists
of many natural or corporate persons, such as, the association,
joint venture or consortium.
Bid Documents: Volume / Volumes that contain request for proposal

documents, schedule of quantities and prices, contract
basic form to be concluded and its various attachments
provided to competitors to submit their proposals for
projects, studies, purchases or services…etc placed by the
Royal Commission for bidding.
Bidding: The process of sourcing the best proposals in the bidding (public or
limited) or auctioning to perform the required work in accordance
with the terms of bidding.

Contract: The legal document concluded by the Royal Commission with

companies, organizations and offices, etc., to perform projects,
studies, designs and supply of goods and services…etc.
Reimbursable Cost: Costs of contracts, salaries or materials or supplies and

equipment that arise from contracting and any other
fees not related to the contractor and had not been
included in the scope of work contracted for.
Change Orders: Any modifications to the contract in accordance with its

conditions and the procedures prescribed by the Royal
Commission.
Purchase Orders: A concise contractual format that is often used to purchase

good or service directly or through limited bidding.
Warranty: Contractor's commitment to the soundness of what he has

performed, or supplied in accordance with the contract
conditions and specifications and during the period or periods
stated in the contract.
Cash Purchase: Use of financial petty cash, permanent and temporary

advances to meet the Royal Commission urgent needs for
purchases and services.
Initial Guarantee: A bank guarantee of 1% to 2% of the bid value submitted

by the bidder and its validity shall be as specified in the
bid documents.
Final Guarantee: A bank guarantee of five percent (5%) of the contract price
submitted by the bidder, and its validity shall be as
specified by the contract.
Chapter 2 Preparation of Bid Documents & Advertisement
Article 2:
The Royal Commission (RC) shall set up a five-year plan for its projects
derived from the master plan of each city, and thereupon an annual plan shall
be developed for the execution of the projects. The projects shall be placed for
bidding according to the RC approved plan whether such projects already have
approved funds in the budget or deemed important by the RC to be placed for
bidding and, according to the RC governing rules, are self-financing.
Article 3:
The RC concerned departments shall undertake the following:
A. Update their projects and works data prior to approval; review the
technical specifications, drawings and plans as well as undertake any
amendment or correction thereto prior to placement of their works in
public bidding, specifically the documents prepared long time ago or the
hardware and software specifications subject to continuous updating.
B. Perform soil investigations and probing as required for construction

projects prior to designing.
C. Update their current projects database and link it with the Government
Projects National Integrated Database.
D. Incorporate training and qualification programs for their employees and

the contractor’s Saudi employees in their contracts.
Article 4:
Prior to placing their works for public bidding or securing their purchases, the
concerned departments of the (RC) shall set up accurate detailed conditions
and technical specifications for the works required, provided that no reference
shall be made to the type or category, no trade mark shall be specified and no
specification that conforms only to certain trademarks are allowed, unless
deemed necessary.
Article 5:
Preference shall be given to the national products, and services and to the
products of national origin as well as to other countries products and services
which are treated same as national products and services provided that the
quality and specifications of the works to be executed shall be observed.
Article 6:

1 Prior to bid opening, the department concerned with estimates shall set
guiding estimated prices for works in the tables of quantities and prices
in conformity with the prevailing market prices, and previous prices
dealt with, and guided by the designer’s estimates. These prices shall be
submitted in a sealed envelope to be opened by the Bid Opening
Committee.
2 The concerned department shall maintain a comprehensive and
continuously updated directory of prices of materials and services
frequently provided.
Article 7:
In mixed works contracts, the required classification of project shall be
determined based on the major scope of works of the project.
Article 8:
When applying public biddings method, the following shall be observed:
A- The public bidding shall be advertised in the Official Gazette and

in two local newspapers. It shall be advertised also through
electronic media in both the official gazette and the Royal
Commission website.
In addition, the Secretariat General of the Chambers of Commerce

and Industry shall be provided with a soft copy of the advertisement.
The advertisement shall be on the Royal Commission website until
the last date for submission of bids.
B- Advertising abroad shall be through the major newspapers in the

countries which provide the services and through international
electronic advertising websites. If necessary, coordination with the
Kingdom’s embassies abroad may be made for advertising.
C- Bid advertisement shall include bid number, description, bidding

conditions, bid documents purchase prices and sale location as well
as the date and place of proposals submission and bid opening.

D- The Period from the date of issuance of the first advertisement in

the official gazette till the last date for submission of proposals shall
be thirty (30) days or more depending on the nature of the scope of
work. The concerned Department shall determine the appropriate
period. However, the bid documents shall be provided at least thirty
(30) days before the bid due date.
Article 9:
1 The copies of bid documents shall be numbered and stamped by the RC.
2 The price of the bid documents shall be reasonable.
Article 10:
1 The Royal Commission shall provide competitors with clear, complete
and integrated information on the required work. They shall be able to
obtain such information in a specific time prior to purchase of bid
documents. Moreover, sufficient number of copies of bid documents
shall be made available to those who wish to obtain them.
2 Competitors shall be furnished with the necessary clarifications and data
related to the works to be executed and shall be allowed to visit the work
site. They shall also be required to investigate the nature of works, and
the performance conditions and get acquainted with all the data and
details, and the factors that impact their proposals’ prices as well as the
risks that may affect their commitment before submitting their bids.
Article 11:
It is permitted to resort to limited bidding, taking into consideration the Royal
Commission public interests, the conditions of execution and the quantity, type
and specialty of works required to be provided. This is done through inviting
companies, establishments and engineering and consulting offices licensed
and qualified in accordance with the procedures determined by the RC in the
following cases:
A. Performing consulting and technical works, studies, preparation and

supervision of implementation of specifications and drawings and
chartered accountants, lawyers and legal advisers services.

B. Purchase and rental of mechanical, electrical and electronic equipment,

materials, spare parts, equipment and vehicles.
C. Purchase of medical supplies.
D. Performance of high tech specialized projects and engineering,

procurement and performance projects that are exempted by a decision
from the Chairman for specific considerations and conditions.
Article 12:
In limited bidding it shall be observed that it is not permitted to deal with
certain companies and establishments continuously. The department
concerned with contracts and purchasing shall maintain lists of companies and
establishments wishing to be registered to provide their services in various
types of works.
Article 13:
1. Materials or services requisition shall include similar items. Such
materials or services may be split not for reason to be within direct
purchasing; or within the jurisdiction of authorized officials.
2. Bidding conditions may include a clause that permits bid splitting at

award as far as the split is in the best interest of the Royal Commission.
The bidding conditions may also include a clause permitting canceling
or reducing some items to arrive at the amounts approved for the project.
Article 14:
The Royal Commission may, as per its procedures, exclude companies and
firms for delay in performance or proven to be in default in other RC or third
party projects. This can be done by either not providing them with bid
document or during bid evaluation process. This includes companies and firms
that have other current projects that exceed their financial or technical
capabilities which affect their contractual obligations.
Article 15:
Procurement may be in accordance with a sample determined or approved by
the Royal Commission.
Article 16:

Ongoing services such as maintenance, cleaning, operation, food catering and

the like shall be placed for public bidding before the beginning of the last year
of the incumbent contract.
Article 17:
The Royal Commission may place its projects for bidding through “two
envelopes method”, where the bidder submits his proposal in one envelope that
contains two separate envelopes (technical envelope and a financial envelope)
with the number of copies as stated in the bid documents.
Chapter 3 Prequalification
Article 18:
When advertising for prequalification, the department concerned with
contracts and procurement shall take the following steps:
A. The prequalification request shall be advertised at least in the official

gazette and in two local newspapers. It shall also be advertised in web
site of the gazette and the Royal Commission website. In addition, the
Secretariat General of the Chambers of Commerce and Industry shall be
provided with a soft copy of the advertisement, and the advertisement
shall be on the Royal Commission website until the deadline for
submission of required documents.
B. Advertisement abroad shall be through the major newspapers in the

countries which provide the services and through international
electronic advertising websites. If necessary, coordination with the
Kingdom’s embassies abroad may be made for advertisement.
C. Prequalification advertisement shall include bid number, description,

bidding conditions, and the time and place of submission of the required
documents.

Article 19:
When bidding through prequalification method, the RC procedures and
formats of prequalification shall be followed in order to select classified
companies and establishments who have technical experience, financial
capability as well as human resources, equipment and tools necessary for
performance of the scope of work of the projects that the Royal Commission
intends to place for public bidding. These procedures organize the
advertisement method, data collection process and prequalification criteria as
per the contract type. The studies required for prequalification include site
visits to the companies and establishments and their projects sites, as well as
the administering and the supervising entities responsible for these projects if
necessary.
Chapter 4
Regulations for Entering into
Biddings Article 20:
It is not permissible to deal with the persons listed below as per these
regulations terms:
A. Government employees with the exception of the following:
1. Non-commercial works if they are permitted to practice such

works.
2. Purchase of books written by them whether directly from them or
from publishers or bookstores.
3. Assign technical works to them or purchase their copyright or
technical patent rights or their classified works.
4. Entering into public auctions if the items to be purchased are for
their personal use.
B. Prisoners who are found guilty during contracting process.

C. Those prohibited to be dealt with as per the law until they are cleared.
D. Bankrupt persons, or those who requested declaration of insolvency,

or proved insolvent, or those who were put under custody by an order.
E. Dissolved or liquidated Companies.
F. Those who are under eighteen (18) years of age.
G. Persons lacking legal capacity.
H. Those not to be dealt with by virtue of an ordinance from legally

authorized entities or by virtue of a judicial judgment till the end of
the period of banning.
Article 21:
1. Those interested in dealing with the Royal Commission shall have the
following documents and licenses:
- The commercial registration or license in the field of work placed for

bidding.
- Classification certificate if required by the scope of works.
- Zakat or tax clearance certificate.
- Certificate from the GOSI stating that bidder has paid all social
insurance dues.
- Chamber of Commerce membership certificate.
- Investment license if the bidder is licensed under the "Foreign
Investment law". It can be delayed until contract pre-award.

- Certificate of achievement of Saudization percentage prescribed by

the law.
2. The documents and licenses referred to in Paragraph (1) of this Article

shall be valid prior to contracting.
Chapter 5
Submitting of Proposals Article 22:
A single proposal may be submitted by associated contractors according to the
following rules:
A. All associated contractors shall be classified in the field of work and at

least one of them shall be classified in the field and grade required for
performance. The rest of the associated contractors shall have a similar
grade or only one degree lower classification.
B. Associated contractors shall have the Royal Commission approval of

the association before submission of the proposal.
C. The association shall be formed prior to proposal submission by virtue

of an agreement concluded by the associated parties, and authenticated
by concerned authority such as the Chamber of Commerce and Industry.
D. The association agreement shall include that the parties to the

association shall be jointly or severally liable to execute all works and
service placed for bidding.
E. The association agreement shall state the legal representative of the

parties who is authorized to complete the contracting procedures, and
execute the contract with the Royal Commission.
F. The proposal documents shall be signed and stamped by the authorized

representative of the associated parties and the original copy of the
association agreement shall be attached to the proposal.
G. No party to the association shall be allowed to submit a proposal

separately or enter into an association agreement with another bidder
competing for the same project.
H. The association agreement shall not be modified without the Royal

Commission’s approval.
Article 23:
Bidders shall be required to consider the field and grade of classification of
works they bid for. Non-conforming proposals shall be excluded except in
cases that do not legally require classification.
Article 24:
Proposals shall be submitted on the original formats received from and
stamped by the Royal Commission and shall be in sealed envelopes to
ensure their confidentiality and to be secured against opening. They shall
be sent via registered mail or hand delivered to the department concerned
with contracts & purchasing. The bidder shall be given a receipt showing
submission date and time. Any proposal delivered by the bidder or received
by the department after the bid opening by the committee shall not be
accepted.
Article 25:
Electronic means may be used for preparation of bid documents and
submission of proposals as follows:
A. Bid documents may be opened for perusal and their contents shall not
be modified. The bidder shall prepare its proposal on the format he
receives, insert its prices in the table of quantities and submit it to the
department concerned with contracts & purchasing along with the other
proposal documents.
B. The electronic signature technology shall be used for receiving

proposals electronically (when approved).
Article 26:
1. The bidder shall submit its price according to the conditions,
specifications and tables of quantities approved by the Royal
Commission as a basic proposal. The bidder may not make any
modification or reservation thereto or cancel any of the bid items or
specifications. Non-conforming bids shall be excluded.
2. The bid unit and total prices shall be inserted in the tables of
quantities in local currency unless it is stipulated to use another
currency.
3. The bidder may not amend, erase or blot out the price list. Any
correction made by the bidder shall be rewritten, signed and stamped.
4. If the price categories subjected to modification, erasing or blotting

out exceed 10% of the price list, the proposal may be excluded.
5. If the Bidder omits or leaves out any of the bid items unpriced, it
shall be required to submit a separate appropriate prices for such
items without increasing the total proposal price, otherwise the
bidder shall be considered withdrawn from competition.
Article 27:

1. The Royal Commission may request Bidders to submit an alternative

Proposal and stipulate the same in the bidding conditions.
2. The original or alternative proposals shall be submitted under an

official covering letter stating total prices and all increases or
reductions thereto in words and figures. Any reduction or proposal
under a separate letter shall not be considered even if it is attached to
the proposal.
3. The bid shall be signed and stamped by the bidder. If the bid is
submitted by a company, an establishment or an association, it shall
be signed by the legally authorized representative.
4. The bid shall be accompanied by original letter of initial bank

guarantee. Non complying bid shall be excluded.
5. Copies of all documents specified in the bid documents shall be

submitted along with the proposal.
6. If the bidder fails to submit, along with its proposal, any of the
documents required in the bid documents in spite of their availability
at the time of submitting its proposal, or if some of the documents
submitted are not valid, the bidder may be granted a grace period to
complete such documents. If it fails to submit the documents within
the fixed period, the bidder shall be excluded.
Article 28:
The bidder may withdraw its proposal prior to the date of bid opening.
Article 29:
It is not permissible to change the proposal prices whether by increase or
decrease after submission except in cases stipulated in these regulations.

Chapter
6 Bid opening Article 30:
One committee or more shall be formed to open bids. It shall be composed of
a head in at least grade (12) as per the Direct Hire Program, and representatives
of Supply Management Department, the administering Department and the
Legal Affairs Department. The decision shall provide for appointment of a
deputy head to replace the Head of the Committee in his absence. The
Committee shall perform its duties as per the RC applicable procedures
Article 31:
Bids shall be opened on the date and time specified. The committee shall
complete the opening of all bids in the same session.
Article 32:
A. Proposals submitted after opening any bid and reading its prices shall
not be accepted. The committee may wait for no longer than 15 minutes
before opening bids if it expects the arrival of more bidders for public
interest.
B. When using the two envelopes method, the Contracts and Purchases
Department shall receive bids at the specified time. After opening and
examination of technical bids, the bidders whose bids are technically
accepted shall be notified in writing of the time and location of opening
financial bids. The sealed financial bids shall be returned (unopened) to
bidders whose proposals are technically unacceptable.
Article 33:
The Bids’ Opening Committee shall ensure the submittal of the basic legal
documents required by the conditions and specifications documents. It may
exclude incomplete bids and return them to bidders.
Article 34:
1. The Bid Opening Committee shall ensure soundness of envelopes and

their conformity with the bid documents, and shall record in its
minutes the number of proposals submitted, and assign each bid a
serial number.
2. The Committee shall announce to present bidders or their

representatives the name of the bidder, its total bid price, and any
increase or decrease thereof mentioned in the proposal letter.
3. The Head of the Committee and all members shall document the
contents of bids opened and specify the samples and specifications of
appliances and materials (catalogues) submitted with the proposal,
sign the original proposal letter, bank guarantee letter, and the
minutes in which the Committee records its procedures.
4. It is not permissible for the Bid Opening Committee to ask bidders to

correct errors or avoid comments stated in their bids.
Further, the Committee shall not be allowed to receive any bid,

envelope, letter or sample submitted by bidders after bid opening.

5. Upon completion of its work the Bid Opening Committee shall refer
its minutes and bid documents to the department concerned with
contracts and purchasing for forwarding to Bids Evaluation
Committee.
Article 35:
Bid opening may be postponed in the following cases:
A- If there are acceptable reasons for postponement of bid

opening date, e.g., need to amend quantities schedules, or
bidding conditions.
B- Upon a justified request, acceptable to Royal Commission,
from most of purchasers of request for proposal (bid
documents).
C- If there is no sufficient number of bidders to purchase request
for proposal (bid documents), or if the number of bidders
interested to submit their proposals is not sufficient.
Those who purchased the RFP shall be notified in writing of the
new date.
D- If the Bid Opening Committee is unable to convene, the bids
shall be received by the department concerned with contracts
and purchasing. Bidders shall be notified in writing of the new
date for bid opening and in such case, it is not permissible to
accept new bids during the postponement period.
Article 36:
Bids may be submitted and opened via electronic means as per the Royal
Commission applicable procedures.
Article 37:
The names of companies and firms who submitted proposals in bids and
purchases shall be announced as per the following regulations:
A. Names of companies and firms that submitted proposals shall be

announced in a bulletin board in the department concerned with
contracts and purchasing and in a conspicuous place. The names shall
also be displayed in the electronic website and made available for not
less than 15 days.
B. The announcement shall be made after bids opening and announcing

prices provided that it includes the following:
1. The name, address and activity of the bidding company or firm and
the total amount of the proposal.
2. The title of the project, its purpose and location.
C. Works with a total cost of one hundred thousand Saudi Riyals or less
shall not be announced.
Chapter 7
Evaluation of Bids
Article 38:
One committee or more shall be formed to evaluate bids. It shall be composed
of a head in at least grade 14 as per Direct Hire Program and representatives
from department concerned with contracts and purchase, The Legal Affairs
Department, the administering department, department concerned with
estimations and Financial Comptroller. The decision shall provide for
appointment of a deputy head to replace the Head of the Committee during his
absence. The Committee shall perform its duties as per applicable RC
procedures. The committee may seek the assistance of experienced RC
employees or consultants to perform its duties, without having a vote.

Article 39:
It is not permissible for one person to chair both Bids Opening Committee and
Bids Evaluation Committee.
Article 40:
1. The department concerned with contracts and purchases shall

review the table of prices and quantities whether unit or total
prices and make necessary corrections to the proposal.
2. If there is a difference between the price indicated in writing

and that indicated in figures, the price indicated in writing shall
prevail.
3. If there is a difference between unit price and total price of an

item, the unit price shall prevail provided that such correction
shall not increase the total proposal price.
4. If there are evidences that the unit price is incorrect after
applying the correction method stated in paragraphs (2) and (3)
of this Article, the Bids Evaluation Committee shall use the
price it deems appropriate after it has verified the financial
balance between items prices, and after it has compared the unit
price with similar items in the bid, in other bids, the market
prices and estimated prices.
5. If the correction mentioned in paragraph (3) of this article

results in decrease of the total proposal price, the reduced
amount shall prevail with full effect on the ranking of bidders
unless the price submitted in the proposal letter is less than the
total price in the schedule of prices after correction. In this case,
the price mentioned in the proposal letter shall prevail.
6. The Bids Evaluation Committee may recommend exclusion of

the bid if arithmetic errors in prices, after correction in
accordance with the provisions of this Article, exceed 10% of
the total bid value by increase or decrease.

Article 41:
The Bids Evaluation Committee, other purchasing committees and technical
analysis committees shall comply with the technical and legal standards for
bid analysis, and determine the technical and financial capability of bidder in
accordance with the provision of these Regulations.
Article 42:
The Bids Evaluation Committee and the technical analysis team may ask
bidders to clarify, through the department concerned with contracts and
purchases, any data or any ambiguity in their bids, provided that this shall not
prejudice the principles of equal opportunities and fairness among bidders; and
shall not cause change in essential issues, including the price.
Article 43:
In Procurement Contracts the bidder shall not be considered quoting for
unpriced items, and the proposal shall be excluded if the bidding conditions do
not allow splitting.
Article 44:
Recommendation shall be raised to award the best bid which is technically and
financially acceptable, and conforms to the required specifications as per
minutes prepared by Bids Evaluation Committee which shall accompanied by
a full evaluation including financial, technical and legal aspects for the three
lowest acceptable proposals.
Article 45:
The authorized person may accept the only proposal submitted or the only
acceptable proposal in a bidding if its prices are within the prevailing prices.
Article 46:
The Bids Evaluation Committee shall make its recommendations based on the
majority of members votes. In case there is a tie, the chairman has a casting
vote provided that the different view, if any, shall be referred to in a report
attached to the committee’s minutes.

Chapter 8
Negotiation with Bidders Article 47:
Negotiations shall be held with the bidder who submits the lowest proposal
that conforms to the conditions and specifications and then with the second
lowest bidder and so on, in any of the following cases:
A. If the proposal includes conditions or reservations unacceptable to the
Royal Commission, and to be withdrawn by the bidder.
B. If the proposal is higher by 35% or more than the Royal Commission’s

estimates.
C. If the proposal’s price is higher than the approved costs it shall be

reduced. If negotiations are unsuccessful and rebidding the project is
deemed unfeasible, and to avoid rebidding the project, the project shall
be awarded within the approved costs by postponing some of the
project’s elements or quantities and award the remaining works to the
same contractor within the basic contract period and with the same unit
prices after approval of contractor. However, the contract shall stipulate
that postponed works shall not be started until availability of funds.
D. In case of reduction of a part of the work provided that it shall not affect
utilization of the project and that the ranking of the accepted proposals
is maintained.
If the negotiations are not successful as per the above, the competition shall be
cancelled and rebidded.
Article 48:
1. The Bids Evaluation Committee shall verify that the price of the
lowest bid which conforms to the conditions and specifications is
fair. It shall be guided by the recent prices previously dealt with,
market prices and estimated guiding prices.
2. In case bid prices are higher than the approved amounts due to
escalation of prices over the estimated prices as well as the market
prices, negotiations shall be held first to reduce bid price to the

prevailing one, then to cancel or reduce some items, in accordance
with the provisions of Article (47) of these Regulations.
Article 49:
If two bids or more are equal in prices after correction, the lowest bid among
the equal ones shall be determined through closed bidding for which bids are
submitted in sealed envelopes, provided that the new proposal price for each
is not higher than the original proposal.
Article 50:
A proposal may be excluded in the following cases:
A. If its price is lower by 35% or more from the Royal Commission’s
estimates or the prevailing prices and it is determined after discussion
with the bidder and financial and technical analysis that the bidder is not
capable of performing the work.
B. If the bidder has a number of other ongoing projects beyond its financial
or technical capabilities which influence the performance of its
contractual obligations.
C. If the proposal does not conform to conditions and specifications.
D. If complete documents required are not submitted within the specified

period as per the Royal Commission’s applicable procedures.
Article 51:
Without prejudice to the provisions of Article (50) of these regulations, the
Bids Evaluation Committee, before recommending exclusion of low pricing
proposals, shall observe the following:
A- Verify that the estimated guiding prices of works are fair and conform
to the prevailing market prices at the time of proposals submittal.
B- Verify bidder's technical experience and that he has performed similar

works.
C- Peruse bidder's financial position to ensure his financial capabilities.
D- Discuss, with the bidder, the basis and standards upon which proposal
prices are specified.
Article 52:
Without prejudice to the provisions of Article (50) of these regulations the Bids
Evaluation Committee before recommending exclusion of the proposal of the
bidder whose contractual obligations are high and exceed his financial or
technical capabilities, shall observe the following:
A- Verify the size of the bidder contractual obligations regarding the

contracts being performed by it for the Royal Commission or other
entities, the standard of performance of those contracts, and whether
it is able to perform the subject project in addition to those active
contracts.
B- Verify bidder's technical experience, and financial capabilities, as

stipulated in paras. (b, c) of Article (51) of these regulations.
C- Exclusion shall be based on acceptable substantial reasons, where the

Royal Commission’s interests are taken into consideration, and
pursuant to a report prepared by the technical team.
Article 53:
Proposal based on a certain percentage reduction or amount shall be excluded
from lowest proposals.
Article 54:

Bidding may be cancelled by the person authorized for award in the following
cases:
A- For public interest, such as the project is no longer needed, or
amendment of the priorities of the project’s execution schedule and
cancellation or insufficiency of the funds or for any other reasons.
B- Due to the presence of errors in the conditions and specifications or a

violation of the provisions herein.
Article 55:
1. If the Royal Commission could not award the bid during bids
validity period, bidders shall be notified of the Royal
Commission’s intent to extend the validity period of their
proposals for an additional period of time.
2. Bidders who agree to the extension shall extend their guarantees

and notify the Royal Commission of the same within two weeks
from the date of the notice to extend. Bidder who fails to submit
the extended guarantee during said period shall be considered
disagreeing to its proposal extension, and its initial guarantee
shall be returned to him.
Article 56:
If the bidding is cancelled, the value of the bid documents shall be refunded or
the new bid documents are issued free of charge to bidders who had already
purchased them in case of rebidding. Bid documents value shall not be
refunded to companies or firms that had purchased them and did not submit a
proposal or whose proposals were excluded during bid opening. The amount
shall not be refunded to bidder unless it returns the purchased documents.
Article 57:
The excluded bidder shall be notified by an official letter of the reasons for its
exclusion.

Chapter 9
Awarding/Conclusion of Contracts
Article 58:
The Royal Commission shall prepare its own special contracts formats. Such
contracts (form of contract, general and special conditions and payment
conditions) shall be in the Arabic language and as per the provisions herein.
Another language beside the Arabic language may be used, provided that the
Arabic version shall prevail for contract interpretation. Contract attachments
and documents may be in any language.
Article 59:
Contracting shall be as follows:
A- Constructing shall be as per the Royal Commission’s conditions and

specifications or any other specifications approved by the Royal
Commission.
B- The Contractor shall guarantee its work against any defects that may
appear during the period specified by the contract conditions. He shall
also guarantee against the partial or total collapse of constructed
structures for ten years from the project’s final acceptance by the Royal
Commission if such collapse is the result of defects in performance
unless the Royal Commission reaches an agreement with the contractor
that structures shall remain for less than ten years.
Article 60:
Contracts may include issuance of a payment not exceeding seventy five
percent (75%) of the value of materials and equipment procured by the
contractor at the work site according to the following conditions:

A- Materials and equipment are acceptable to the Royal Commission.
B- Materials and equipment prices shall be included in price categories

stipulated in the contract.
C- The purchase of materials and equipment shall be substantiated by

documents acceptable to the Royal Commission.
D- The materials and equipment shall be ready for transportation to the

work site under the contractor’s responsibility provided that it provides
a bank guarantee equivalent to the amount paid to it against
procurement.
Article 61:
The total contract value shall include and cover all performance costs as per
its conditions including fees and taxes paid by the contractor. Such taxes and
fees shall not be exempted. Moreover, the RC contractors profits or their
employees income shall not be exempted from the tax except what is excluded
as per a legal text.
Article 62:
The Royal Commission may include, in contracts, specific amounts for
reimbursable costs.
Article 63:
1. The period of performance of ongoing services contracts, such
as maintenance, cleaning, operation and catering contracts,
shall be adequate to the Royal Commission’s need and the
nature of the work, provided that the performance period shall
not exceed five years. This period may be extended in
coordination with the Ministry of Finance if the award of the
follow on contract is delayed.

2. A prior agreement shall be made with the Ministry of Finance

for contracts whose performance periods exceed five years and
that they require financial allocations from the Ministry.
Article 64:
The performance periods for construction contracts shall be adequate to the
size and nature of works and the annual funds allocated for payment against
the project.
Article 65:
Proposals shall be awarded by the authorized person within the validity period
specified by the Royal Commission in the bid documents.
Article 66:
The contracts financed by the State’s budget and with a performance period of
more than one year and a value of five million Riyals or more shall be
submitted to the Ministry of Finance for review before execution or as per the
new procedures issued in this regard. If the Ministry does not respond within
two weeks from the date of receipt, this is considered as an approval.
Article 67:
1. The department in charge of contracts and purchases shall set a time for
contract execution.
2. The contract shall be executed between the Royal Commission and the
entity to whom the works have been awarded following their
notification of the award and submission of the final guarantee letter,
and finalizing the award legal procedures.
3. The contract shall be executed by the authorized person as per the Royal
Commission approved authorization matrix.
Article 68:
1. The Royal Commission shall announce the results of the biddings
contracted for execution and whose value exceeds one million Riyals
each, provided that the announcement shall include the following
information:
a. Contract title and works awarded.

b. Address of the person who can be contacted for obtaining

information on contract.
c. Contract location, total value and awarding date.
d. Name and address of the company or firm awarded the contract.
2. Each contract information shall be announced separately on the Royal

Commission website and the Official Gazette.
3. An electronic copy of the announcement shall be provided to the

Council of the Chambers of Commerce and Industry.
Article 69:
1. The contract shall be signed in quadruplicate, one copy for the
contractor, one copy for the central archive, one copy for the
accounts department and one copy for General Audit Bureau.
2. Related governmental entities shall be provided with the information

they require about the contract.
Article 70:
1. The contract administering department shall ensure that the contractor
submits the required insurance documents in the specified time as per
the contract’s requirements.
2. In construction contracts, the work site shall be handed over within a

period not exceeding 120 days after the contract’s execution.
3. Worksite in ongoing service contracts requiring mobilization to

maintain services, shall be initially handed over before the expiry of
current contract to enable the contractor to prepare and mobilize for
work through coordination with the incumbent contractor.

Chapter 10
Execution and Management of Contracts and Works Schedule
Article 71:
The Royal Commission may pay an advance payment to the contractor not
exceeding twenty percent (20%) of the total contract value against a bank
guarantee for the same amount. The advance payment shall be stipulated in the
conditions and specifications during bidding. This payment shall be deducted
in installments from the contractor’s invoices as per the Royal Commission’s
applicable procedures.
Article 72:
In construction contracts, contractor shall be responsible for detailed review of
the engineering and technical designs, and shall immediately notify the Royal
Commission of any technical errors that may affect the soundness of
structures, or any errors in the specifications or drawings when detected.
Further, it shall review soil investigation reports and recommendations.
However, this shall not relieve the designing or supervising consultant of its
contractual liabilities.
Article 73:
1. If the contractor doesn’t perform items included in the total contract

price, they shall be performed at its expense or the amount equivalent to
their cost shall be deducted in accordance with the prevailing prices.
2. If the Royal Commission refrains from performance of any item

included in the proposal’s total value, the equivalent amount of the said
item cost shall be deducted according to the prevailing prices.

Article 74:
The contractor’s dues shall be paid in installments against works completed
and based on the invoices approved by the Royal Commission.
Article 75:
The Royal Commission shall withhold ten percent (10%) of the contract value
until the initial acceptance of works. This percentage may be reduced to five
percent (5%).
Article 76:
The Royal Commission may withhold contractors’ dues in the following cases:
a. If it became clear that the contractor is not capable of completing the
contract as per its conditions and specifications in the remaining period
with the possibility of terminating the contract and performing the work
at the contractor expense.
b. If the contractor delays payment of the salaries and dues of its workers,
suppliers or subcontractors approved by the Royal Commission beyond
the specified dates although it was notified in writing and after elapse of
the period specified in the notification.
c. Upon the request of any governmental or judicial entity in the Kingdom.

Chapter 11
Increase and Decrease of Contractor's Obligations
Article 77:
The following rules shall be observed in the increase or decrease of the
contractor's obligations, or making any amendment or change to the contracted
works:
A. The additional works shall be within the Industrial City or the
contract scope of work.
B. The required work amendments or changes shall achieve the

interest of the Royal Commission provided that this shall not
prejudice the terms and specifications.
C. Ensuring the availability of necessary funds to cover the value of

the additional works before authorizing the contractor.
D. The same items or quantities unit rates stipulated in the contract

shall be used.
E. If the contract does not contain items or quantities similar to the

additional works, then the matter shall be referred to the competent
committee, to study the assignment of such works, and negotiate
with the contractor for their performance. The committee shall
verify appropriateness of the prices quoted by the contractor
compared with the prevailing prices. If the contractor does not
accept the conclusion reached by the committee then the contractor
shall be notified to perform those works and submit supporting
documents for the total actual cost. The prices and the
appropriateness of the cost shall be verified and the contractor shall
be reimbursed accordingly.
F. No additional works shall be assigned after the acceptance of the

contract's works unless the contract period is not expired.
G. All orders related to the increase or decrease of the contractor's

obligations, the periods required for the additional works, and
change orders shall be issued by the authorized person.
Article 78:
Contractor shall not be assigned to perform any works or services not included
in the quantities and items of the contract without a written authorization.
Article 79:
The period of ongoing services contracts, such as maintenance, janitorial,
operation and catering contracts, may be extended provided that the total
amount of extensions shall not exceed 10% of the contract amount.
Article 80:
The contractor’s obligations may be increased by not more than ten percent
(10%) of the contract’s price or decreased by not more than twenty percent
(20%) of the contract’s price, subject to article (77) and using the same price
categories stipulated in the contract. If the contract does not include price
categories, an agreement shall be reached with the contractor to include such
categories in the contract with reasonable prices. The contractor may be
assigned works outside the scope of work of the contract and in the same field
of its classification to perform important and urgent works not exceeding five
percent (5%) of the increase percentage mentioned above, or five million
Riyals (SR 5.000.000), whichever is less.
Chapter 12 Direct Purchase / Electronic Purchase / Cash

Purchase
Article 81:
The Royal Commission may resort to the direct purchase method from one or
several specific sources as it deems appropriate and as per the Royal
Commission applicable procedures and authorizations. However, the
following shall be observed:
A. Securing the needs for materials, works or services at reasonable

prices.
B. Opportunity shall be given, in direct purchase, to the largest number
of dealers so that the dealing shall not be restricted to a limited
number, or deal continuously with certain companies or
establishments. Lists of companies and establishments interested to
be registered to provide their services in various fields shall be
maintained.
Article 82:
Contracting via correspondence (without formulating a contract) may be used
if the contracting value does not exceed five hundred thousand Riyals (SR
500,000). The authorization letter issued by the authorized person shall be
considered as an approval to award and contracting.
Article 83:
The Royal Commission may secure its purchases via electronic methods
provided that the following rules shall be observed:
A- The contractor maintains a good record of dealing with the Royal
Commission.
B- The dealing via electronic methods shall be as per the Royal

Commission applicable procedures.
Article 84:
The Royal Commission may resort to the cash purchase method within the
limits of financial loan and as it deems appropriate in accordance with the
Royal Commission applicable procedures.

Chapter 13
Bank Guarantees First: Initial Bank
Guarantee:
Article 85:
A bank guarantee that ranges between one to two percent (1% to 2%) of the
proposal's value shall be submitted. The bank guarantee and the proposal shall
be valid for a period as stipulated in the bid documents. A specific grace period
shall be given to correct the shortage in the period and the value. The
guarantees of the lowest three acceptable proposals shall be maintained until
the award. In case of submission of a basic proposal and an alternative
proposal, the bidder shall submit a bank guarantee of one to two percent (1%
to 2%) of the higher proposal's value.
Article 86:
1. The percentage and validity period of the initial guarantee shall be
specified in the terms of bidding.
2. Proposal submitted with insufficient initial guarantee shall not be

accepted if the shortage exceeds fifteen percent (15%) of the guarantee’s
value. If the shortage is less than that, the bidder shall be given a grace
period specified by the Bid Opening Committee, to correct the
guarantee’s value. The guarantee shall be proportionate to the proposal
total price before review and correction.
3. Any proposal accompanied with a bank guarantee with a shortage in its

validity period shall not be accepted if the shortage exceeds thirty
percent
(30%) of the guarantee’s validity period as stipulated in the bid
documents. However, if the shortage is less than that, the bidder shall
be given a grace period specified by the Bid Opening Committee, to
correct the guarantee’s validity period.

4. If the final bank guarantee of the successful bidder is delayed, then the
concerned department shall request extension of the initial bank
guarantee.
5. The initial guarantees shall be returned to the other bidders after the
award, in case of bidding cancellation or after the expiry of the time
specified for the validity of the proposals, unless the bidder expresses
its interest to maintain its proposal in accordance with Article (55) of
these Regulations.
6. The Royal Commission, at its own discretion, may release the initial
bank guarantees before the award, if after bid opening and disclosure of
the prices, it is clear that the prices of these proposals are high, or
violating the terms and specifications, that debar the award of the
contract.
Second: Final Bank Guarantee:

Article 87:
A final guarantee of five percent 5% of the contract value shall be submitted
within ten (10) days from date of award. The Royal Commission may extend
this period for similar periods. However, if it fails to do so within the specified
period, the initial guarantee shall not be refunded, and negotiations shall be
conducted with the next bidder.
Article 88:
1. If a final bank guarantee is required in the contract, it shall be submitted
within the specified period in accordance with Article (87) of these
Regulations.
2. The department concerned shall extend the final bank guarantee period
before its expiry date for reasons specified for that according to these
Regulations.
3. The department concerned shall forward the extension request directly

to the bank and the contractor shall be provided with a copy thereof. The
extension shall be for the required period. It shall be referred in the

extension request that if the bank fails to finalize the extension
procedures before the expiration of the guarantee validity period, then
the bank shall deposit the guarantee amount to the Royal Commission’s
account immediately.
Article 89:
1- The final bank guarantee shall not be required within the period
specified for submission in the following cases:
A. If the contractor procures all the required items and finally accepted
by the Royal Commission.
B. If the contractor completes the works of the subject contract and

finally accepted by the Royal Commission.
C. If the contractor performs part of the works and accepted, and its
price is sufficient to cover the value of the final bank guarantee, the
covering amount of the guarantee shall not be paid unless after the
contractor performs its obligations and finally accepted by the Royal
Commission.
2- The final bank guarantee’s validity shall be extended if the contractor

delays the performance of the works and/or works guarantee.
3- The contractor shall not be required to provide a final bank guarantee in

case it is assigned additional works if the basic final bank guarantee is
not reduced.
4- In public auctions, the value of the final bank guarantee shall be 50% of
the value of the agreement and it shall be submitted upon award. In
sealed envelopes, the final guarantee shall be 25%.
5- The final bank guarantee shall be retained until the contractor performs
all its obligations set forth in the contract or the agreement.
6- The final bank guarantee may be reduced in ongoing contracts annually

according to the progress of work provided that it shall not be less than
5% of the value of the remaining works.
Article 90:
With respect to initial and final bank guarantees the following shall be
observed:
A. They shall be as per the text and conditions approved by the competent
authorities.
B. The guarantee shall be in the following forms:
1. A bank guarantee letter from a local bank.

2. A bank guarantee from a foreign bank to be submitted through a local
bank operating in the Kingdom.
3. A cash deposit in addition to a bank guarantee in cases relating to

catering or which require urgent supply within a period not
exceeding fifteen (15) days.
4. A certified check or a cash amount for auctions.
Article 91:
The bank guarantee shall not be required in the following cases:
A. Initial and final bank guarantees in direct and cash purchasing.
B. Final bank guarantee in consultation works contracts.
C. The initial and final bank guarantees when contracting with a

governmental entity, public institutions, companies that the government
owns not less than 51% of its capital, charitable and public societies
provided that it performs the works by itself.
Third: Advance Payment Guarantee Conditions
Article 92:
The advance payment guarantee shall be at least equal to its amount, and shall
be valid until the recovery of the total amount of the payment. The department
concerned shall notify the bank issuing the guarantee to reduce its amount by
the same percentage that has been recovered from the advance payment
according to the invoices and without any request from the contractor.
Fourth: Bank Guarantee Confiscation

Article 93:
1. In case there are justifications for the confiscation of the contractor's
bank guarantee according to these Regulations and contract
conditions, the department concerned, shall refer the matter to the
committee in charge to study the case and make a justified
recommendation for the authorized person, taking into consideration
the impacts resulting from confiscation and the guarantee validity
period.
2. The confiscation request shall be restricted to the guarantee related

to the job in which the contractor violates its obligations and shall
not cover guarantees for other jobs, also it is not permissible to
confiscate the guarantee for reasons other than those for which the
guarantee has been submitted.
3. In case of confiscation of the initial guarantee in split biddings, the

confiscation shall be limited to part of the guarantee value in
proportion to the value of works determined to be awarded to the
contractor.
4. If the Royal Commission decides to confiscate the guarantee, it shall

clearly request from the bank issuing the guarantee, to confiscate the
guarantee using the phrase "guarantee confiscation".The request
shall be forwarded directly to the bank and the bank shall be asked
to respond to the request immediately.
Fifth: General Terms for Bank Guarantees

Article 94:
1. If the guarantee is issued by a foreign bank via a local bank, as stated
in Articles (89 and 90) of these Regulations, the department
concerned shall ensure that the local bank abides by the terms and
rules of bank guarantees specified by the Ministry of Finance.
2. The guarantee may be issued by several banks, and each bank shall
be committed to pay a specified percentage of the guarantee amount.
3. The guarantee shall be payable upon the first request by the Royal
Commission without the need for a judicial verdict or an arbitration
committee decision.
4. The guarantee shall be unconditional, irrevocable, and its amount is

free from any deductions related to taxes, fees or other expenses.
5. The department concerned shall maintain special records to control
the guarantees submitted by its contractors; and to follow-up the
procedures for their extension, confiscation or release.
Article 95:
Cash deposit referred to in Article (90) of these Regulations shall be submitted
according to the following rules:
a) The cash deposit amount shall be handed over to the cashier of the
entity concerned against a receipt.
b) These amounts shall not be entered into the cashier account or financial
records and shall be available at the request of the department in charge
of the contract, and shall be spent by the department concerned.
c) The Royal Commission shall notify the contractor to replenish the spent
amounts immediately. If he delays in replenishing, the amount shall be
deducted from its accruals, or its accruals shall be withheld until it pays
the amount.
d) The cash deposit shall not be used or confiscated for purposes other
than those for which it is allocated.
e) The cash deposit or its balance shall be refunded to the contractor after
the completion of contract against the receipt issued to the contractor.

f) The cash deposit may be deposited in an account in the Saudi Arabia

Monetary Agency or any bank according to the financial instructions of
budget and accounts.
Article 96:
a) The bank guarantees' terms, forms and conditions referred to in these
Regulations shall apply to all guarantees requested by the Royal
Commission, including the guarantees requested for public auctions for
sale of movable assets or for lease and investment of real estate.
b) The bank guarantee forms and texts as approved by the Ministry of

Finance shall be adhered to.
Chapter 14
Payment of the Financial
Compensation Article 97:
If it is decided to pay advance payment to the contractor in accordance with
provisions contained in Articles, (71) and (92) of these Regulations, the
following rules shall be observed:
1. Availability of the necessary cash flow in the allocated fund.
2. The contractor shall submit a bank guarantee for the advance payment
before its issuance.
3. The advance payment shall be deducted on installments from contractor's

invoices, provided that the deductions shall not be less than the percentage
of the advance payment.
4. No advance payment shall be paid in cases of the renewal of a current

contract, its extension or assignment of additional works.
Article 98:
Contractor's accruals shall be paid progressively as the work proceeds in
accordance with the Article (74) after deduction of any penalties or other
deductions according to the contract conditions; the payment period shall not
exceed thirty (30) days from the date of approval of the payment order.
Article 99:
The computations for construction contracts shall be based on the actual
measurement of the quantities, items and numbers executed.
Article 100:
Without prejudice to what is stated in Article (75) of these Regulations, the
final invoice shall be paid after the contractor has completed all its contractual
obligations, return of Royal Commission Property and submittal of the
following certificates:
1. A certificate from Zakat and Income Tax Department demonstrating
that he had paid the due Zakat or Taxes.
2. A certificate from GOSI certifying that its establishment is registered

with GOSI and has paid its insurance obligations.
3. Certificates required as per approved contract formats.
Article 101:
The contractor, after the approval of Royal Commission, may assign his
accruals under this contract to a third party, without prejudice to the terms of
contract and the rights of the Royal Commission.
Article 102:
The contracts' value shall be paid in Saudi Riyal, and may be paid in any other
currency after coordination with the Ministry of Finance. The proposal
currency shall be stated in the bid documents. The contract value shall not be
paid in more than one currency.

Chapter 15 Procurement of Needs By Leasing or Replacement of

Systems and
Equipment with New Ones
Article 103:
Royal Commission can procure its needs by leasing or replacing its systems
and equipment with new ones according to the following:
First: Leasing of equipment, systems and software:

In case of procurement through leasing, the following rules shall be observed:
a. Leasing shall satisfy the interest of the Royal Commission better than
purchasing.
b. Assessment of leasing shall be based on justifications submitted by

department concerned and leasing request shall be approved by the
authorized person.
The leased systems or supplies shall be either insured by the Lessor,
or under its warranty during the lease term, provided that the Lessor
shall be committed under all circumstances to maintain them during
the lease term.
c. The lease period shall be proportionate with the approved costs
allocated for the contract in the budget.
Second: Replacement of Systems and Equipment with New Ones

In case of replacement of systems or equipment with new ones, with settlement
of difference in value, the following rules shall be observed:
a. Equipment shall be replaced either for the expiry of their life span,
or for being such type that undergoes continuous development, or
for the high cost of maintenance and spare parts compared to the
cost and maintenance of the new systems.
The replacement shall serve the interest of Royal Commission better
than selling.

b. A committee shall be formed to inspect the old systems and prepare

a report thereon covering the contents of paragraphs (a & b) of this
article and indicating current condition and estimated value.
c. The conditions and technical specifications of the new systems
placed for competition shall include the estimated value of the old
systems. Competition shall be confined to the value of the new
systems.
d. Pay item concerned shall cover the cost of the new asset.
e. The total cost of the new asset shall be deducted from the allocated
fund. The value of the old asset shall be entered in the revenues as
government sales. The old asset shall be delivered to the supplier
with payment of the difference in value.
Article 104:
The Royal Commission requirements of equipment and systems whether
provided through leasing or replacement shall be placed for limited
competition.
Chapter 16
Penalties
Article 105:
In procurement contracts, if the contractor delays the performance of its
contractual obligations, a penalty of one percent (1%) of the value of the
delayed items shall be imposed for each week of delay, provided that the total
penalty amount shall not exceed (6%) of the total contract value.
Article 106:
1- If the procurement authorization is immediately effective, without
specifying a period, the delay penalty shall be effective after one week
of the date of authorization.
2- Delay penalty shall not be applicable to periods less than one week.
Article 107:
The penalty set forth in the contract shall be applied, provided that the total
value of such penalty shall not exceed (10%) of the contract total value if the
contractor delays or defaults in implementing its obligations in any of the
following contracts:
A- Supervision contracts.
B- Contracts for design, studies, specifications, drawings, technical work

and accountants, solicitors and legal advisors services.
C- Continuous services contracts, such as maintenance, operation,

cleaning,
catering service, transportation and manufacturing contracts.
Article 108:
In contracts referred to in Article 107 of these Regulations the conditions of
contract shall stipulate the manner of the application of the penalty, to cover
all aspects of the default or delay in the implementation and application shall
be gradual. The penalty shall be proportionate to the degree of violation,
whether a lump sum, or a certain percentage of the value of the item in which
the default occurred, or in another way adequate to the nature of the item in
which the default occurred.
Article 109:
In addition to application of the penalty to contracts mentioned in Article 107
of these regulations, the value of unimplemented items and services or that
have been implemented contrary to what has been agreed upon whatever their
value might be, shall be deducted as unperformed items such as poor standard
of performance represented in poor implementation or shortage of technicians,
labor, materials or equipment required for implementation.
Article 110:
If the contractor delays the completion of the work in the construction contracts
and fails to deliver complete work on deadlines, it shall be subject to a fine of
delay, provided that the total deducted fines shall not exceed ten percent (10%)
of the contract value, and calculated based on the daily average cost of the
project by dividing the contract value by contract duration in days as follows:
a- The penalty against the first period of delay shall be equivalent to 1/4 of
the daily average cost for each day of delay until the longer period
reaches either 15 days or 10% of the Contract Period.
b- The penalty against the second period of delay shall be equivalent to 1/2
of the daily average cost for each day of delay until the delay for the two
periods reaches either 30 days or 15% of the Contract Period whichever
is greater.
c- The penalty against the third period of delay shall be equivalent to the
full daily average cost for each day of delay following the longer period
mentioned in(A) and (b) of this article.
d- If, in the judgment of the Royal Commission, the delayed portion of the
work will neither prevent the full utilization of the work at the specified
completion date, disrupt the use of other facilities, nor adversely affect
the use of that part of the work completed, then the penalty shall be
applicable to value of delayed works in accordance with the method
applied in computing the penalty applicable to original works, provided
that the total amount of penalty shall not exceed 10% of delayed work.
Article 111:
Application of penalty in mixed contracts shall be as per contract classification
subject to Article 7 of these Regulations.
Article 112:
In case of withdrawal of work from contractor after expiry of contract period,
a penalty against the period following the expiry of the contract period up to
the date of withdrawal shall be imposed, provided that it shall not exceed the
total delay penalty mentioned in these regulations.

Article 113:
The delay or default penalty shall be deducted from the contractor's accruals
when due. Deducting of not more than (10%) from the value of each invoice
against delay penalty due from the contractor may be sufficient. The remaining
penalty amount shall be deducted from the final invoice.
Article 114:
The contractor shall incur the project's supervision costs during the delay
period during the contract validity, on basis of the costs of the supervising
consultant contract. If the supervision is undertaken by the Royal Commission,
the costs of supervision during period of delay shall be calculated at the rate
of eleven percent (11%) of delayed works value.
Article 115:
If the consultant staff are supervising more than one project for the Royal
Commission at the same time, fees of the consultant staff for the delayed
project shall be computed as follows:
Monthly supervision fees for delayed project =
Employee(s) monthly salary X Project Value
----------------------------------------------------------
Total value of the projects supervised by Consultant (Not accepted)
Upon specifying the total monthly supervision fees for the project, the
supervision costs shall be deducted from the contractor's accruals on basis of
the period of delay.
Article 116:
In case of extension of contract period, contractor shall be exempted from the
supervision costs of the period of extension.
Article 117:

In case of expiry of contract original period and the contractor has not
completed the work, the number of staff of the supervising consultant shall be
reconsidered and an agreement shall be reached with the it regarding the
number and cost of the supervisory staff required according to the phase of the
project as well as the type and volume of remaining works.
Article 118:
1. It is permissible to impose a penalty against each phase of completion
of work in which the contractor delays the work if the contract
schedule provides for specific date to complete each phase.
2. If contractor delay extends beyond the final date for the completion of
all works of the contract, the contractor shall bear the costs of
supervision (if any) during the period of delay at the rate of eleven
percent (11%) of the value of the delayed works.
Article 119:
Prior to applying fine and collecting its value, the contractor shall be notified
of the delay or default attributed to it and granted a period of time to be stated
in the letter of notification to correct the error in cases where possible, or to
prove that the delay or default is due to reasons beyond its control and without
negligence or default on its part.
Article 120:
The Royal Commission may exempt the contractor from the fine, provided that
the delay is due to force majeure, or for justifications acceptable to the Royal
Commission.
Article 121:
The Royal Commission may apply the penalties contained in the Government
laws in accordance with the Royal Commission applicable procedures, and
their value shall not be considered within maximum delay fine.


Chapter 17 CONTRACTS EXTENSION

Article 122:
The Royal Commission may extend contracts before the specified date for their
expiration by issuing a change order or direction letter, taking into account set
rules, in the following cases:
A- If the contractor has been assigned extra works.
B- If the Royal Commission suspended work under a suspension

notification.
C- Insufficient funds to spend on the project within its period specified in

the schedule.
D- If the contractor works interface with other contractors or other entities,

and that would impact the schedule of the contract.
E- In case of force majeure or cause beyond the contractor's control without

mistake or negligence on the part of contractor. The additional costs (if
any) and the new date for completion of work shall be specified by a
change order.
F- If the awarding of the follow on contract in the operation and

maintenance contracts is delayed.
Article 123:
1. It is not permissible to issue change order or a letter of authorization to
extend contract period or notify contractor of extension of its contract
in any case other than those specified under Article (122) of these
Regulations, without approval of the authorized person.
2. In cases other than those stipulated in Article (122) of these Regulations,

if the contractor is given the chance to complete the works this shall not
be considered extension not subject to penalty.

Article 124:
In cases specified under Article 122 of these Regulations, the request for
extension shall be technically and legally studied by a specialized team to
determine the reasons of the delay and due periods for each individual reason.
The study results shall be submitted to the concerned committee, and then the
recommendation shall be forwarded to the authorized person.
Article 125:
The suspension letter to contractor shall be issued by the authorized person to
suspend the contractor's works or part thereof, and the contractor shall be
notified by a letter specifying the date of start of suspension of works or part
thereof, and shall be notified to resume the works after removal of the causes
of suspension.
Article 126:
Without prejudice to Article 122 of these Regulations, the contractor shall be
compensated for the entire duration of the total suspension with similar
duration. If the suspension is partial, the contractor shall be compensated with
duration commensurate with the impact of the part suspended on the progress
of the project based on a technical report prepared by the department in charge
of the contract.
Article 127:
In addition to the content of Article 126 of these Regulations, the contractor
shall be compensated for each continuous 30 days of total suspension by three
days period for purpose of mobilization and preparation to resume the works,
provided that the total compensation period shall not exceed forty-five days.

Chapter 18
Withdrawal and Termination of
Work Article 128:
If the contractor delays in signing the contract without an acceptable excuse, it
shall be issued a warning letter sent by registered mail. If he has not come to
sign the contract within fifteen (15) days from the date of warning notification
the work will be withdrawn from it, according to the provisions of Article 129
of these Regulations.
Article 129:
The Royal Commission may withdraw contract / purchase order partially or
wholly in the following cases:
A- If the contractor fails to provide the final bank guarantee within
the specified period after the award of contract.
B- If the contractor delays work commencement, slows down

execution or withdraws from work.
C- If it waives the contract or enters into subcontract without a prior

express written consent of the Royal Commission.
D- If the contractor declares bankruptcy, requests to declare

bankruptcy, proved insolvent or his company liquidated.
E- If the contractor fails to perform the contract or to fulfill its basic

contractual obligations.
F- If the contractor dies and its competency is considered when

concluding the contract and its inheritors do not have adequate
technical or financial guarantees to complete the work.

G- If it has been proved that the contractor itself or through others

attempted, directly or indirectly to bribe a staff member of the
Royal Commission or its consultants.
The Royal Commission may implement the remaining works at the

contractor's expense, in the manner it deems appropriate while maintaining
right to backcharge the contractor for compensation for damages that it
incurred as a result of that according to the Royal Commission applicable
procedures.
Article 130:
In the cases where the Royal Commission may terminate the contract, a written
notice shall be sent to the contractor and shall be granted a period of fifteen
days to remedy the default, or provide evidence acceptable to the Royal
Commission that he is able to remove the causes of default.
Article 131:
In cases other than default of the contractor, the Royal Commission may,
according to its wish terminate the contract wholly or partially in the events
such follows:
(a) If there are new developments which make the Royal Commission
believe that there is no need to complete the remaining works of the
contract, or wishes to postpone them.
(b) If the Royal Commission needs to rebid the remaining works of the
contract according to specifications different from the original
contract specifications and this can not be achieved through change
orders.
(c) Unavailability of sufficient financial funds in the budget to cover the

remaining works and term of the contract.
(d) If the Royal Commission decides to implement the remaining contract

works by itself and through its direct staff.
Article 132:
1- If the contractor delays, slows or refuses to receive the work site in
construction contracts, it shall be notified by a registered letter. If the
site has not been received within fifteen days (15) from the date of
notification, the department concerned with contract shall prepare a
legal delivery minutes and inform the contractor of the same. It shall be
notified to begin implementation within fifteen (15) days from the date
of notification. If it has not commenced the work after elapse of
this period, works may be withdrawn from it in accordance with Article
129 of these Regulations.
2- If the contractor protests for existence of obstacles that prevent it from

receiving the site, and department concerned with contract is not
convinced of that, it has not the right to refuse receipt of the site and if
it has reservations about the site they shall be recorded in the minutes
of the delivery of the site.
3- If the contractor delays in receipt of the site in the continuous services

contracts, it shall be notified by registered letter. If the site has not been
received within fifteen days from the date of notification, the works may
be withdrawn from it in accordance with Article 129 of these
Regulations.
Article 133:
The work will be withdrawn, wholly or partially, from the contractor by a
decision from authorized person according to recommendation from the
committee concerned, and the contractor shall be notified by a registered letter.
Article 134:
The departments concerned shall withhold the accruals of the contractor whose
works have been withdrawn for default and extend the guarantees submitted by
the contractor to maintain their validity until a final decision is taken to confiscate
them in order to cover their claims against the contractor until final financial
disposition of the project works. The contractor shall be banned from
participating in the new competitions for a period not exceeding five years.

Article 135:
In the event the Royal Commission has decided to execute the works at expense
of contractor from whom works have been withdrawn, execution shall be in
accordance with the same conditions and specifications upon which the contract
was concluded with the contractor whose works have been withdrawn.
If the Royal Commission deems that the interest requires modification of

withdrawn work specifications to be implemented at the contractor's expense, the
responsibility of the contractor from whom the work was withdrawn shall be
according to the new contractor prices and under the conditions and specifications
before work withdrawal. It is not allowed in any case to backcharge the contractor
from whom work was withdrawn for the increase resulting from such
amendment.
Withdrawn works shall be performed through one of the following methods:

a) Agreement with the second bidder to perform the works at the same
prices. If the contractor disagrees, negotiation shall be held with other
bidders in sequence order. If same prices have not been reached, the
remaining works shall be placed for closed competition for all bidders
in order to perform the works within the prevailing prices, provided that
price quotation exceeding original offers value shall not be submitted.
b) If it is not possible to carry out the works in line with paragraph (a)
above, they shall be performed in the manner deemed appropriate to the
RC.
c) If the value of withdrawn works does not exceed SR. 300,000.00 (Three
hundred thousand Saudi Riyals), they may be secured in the appropriate
manner.
Article 136:
1- A minutes shall be prepared jointly with the contractor whose works
have been withdrawn, or its authorized representative, substantiating
the project's status at the time of withdrawal, together with available
tools, materials and equipment on site. If the contractor or its
representative is not present after being notified of the same in writing,

it shall not have the right to object to the contents of the minutes.
2- The Royal Commission shall have the right to withhold materials,

equipment and machinery available on site and use them in completing
the work.
3- The Royal Commission shall have the right to use materials equipment
and machinery to complete works withdrawn after their condition has
been substantiated as provided for in paragraph (1) of this article,
provided that materials cost and equipment and machinery similar
rental rate shall be assessed according to the prevailing prices (In case
there is a need to use them).
4- The contractor whose works have been withdrawn has the right to
recover the materials, equipment, machinery and items belonging to it
and not included in the settlement after settlement of its accounts and
payment of amounts due from it.
Article 137:
The Royal Commission may administer by itself the project or works contracted
for, or it may assign that to a consulting office if it sees that it will be more
beneficial for the project than withdrawal.
Article 138:
In the event the contractor (individual) dies and his heirs are not desirous of
continuing performance of the contract, in accordance with (Article 129, para. f)
of these Regulations, the contract shall be rescinded and all performed works and
materials available on site shall be inventoried under a minutes signed by the
heirs attorney-in-fact or their representative. The final guarantee shall be released
after all rights and obligations resulting from the contract have been settled.
Article 139:
Before approval of assignment of the Contract or part thereof, the following shall
be observed:

(a) Identify the causes of assignment request, and whether there are other
contracts assigned by the Contractor before, under a declaration
submitted by the Contractor to the Royal Commission.
(b) Assignment shall be under an agreement concluded between both

assignment parties to specify their obligations towards the Royal
Commission. The agreement shall not be considered valid unless after
approval of the Royal Commission.
(c) Assignment shall not affect the project.
(d) The assignee shall meet the conditions of contracting with the Royal
Commission.

Chapter 19
Works Acceptance Article 140:
1. In construction contracts works shall be initially accepted after the
contractor has submitted a notice of completion. The Department
concerned with the contract shall start inspection and acceptance within
15 days from the date of receipt of the contractor's notice.
2. The Department concerned with contract shall accept as built drawings,

appliances and equipment specifications, operation and maintenance
manuals and documents relevant to the project prior to approval to pay the
final payment.
3. In case the department concerned could not accept the project for reasons
not attributed to the contractor or for reason attributed to the RC, the
department shall prepare inspection minutes (to determine the condition)
jointly with the contractor or its authorized representative to determine all
works completed in the project.
Article 141:
If the contract period expires in the construction contracts and the contractor has
not handed over the works, the department concerned shall form a technical
committee to inspect the works and prepare a minutes (to determine the
condition) jointly with the contractor to determine completed works, percentage
of progress and causes of and obstructions delaying performance. In case the
contractor or its authorized representative fails to attend during inspection after
has been notified in writing, it shall not have the right to object to the minutes
contents.
Article 142:
Without prejudice to the provisions of Article 59 of these Regulations, the project
in construction contracts shall remain under the contractor's warranty for a period
of not less than one year starting as of the date of initial acceptance. This period
shall start in relation to the project deficiencies (if any) as of the date of their
initial acceptance.

Article 143:
1) The contractor shall undertake during the warranty period referred to in
Article 142 herein, to repair and replace deficiencies in used materials,
or in execution of works.
2) Acceptance of works by the department concerned without giving any

comments thereon, or further deficiencies, or materials which are not in
conformity with the specifications, which could not have been noticed
during the initial acceptance, shall not relieve the contractor of its
warranty obligation towards them. If the contractor fails to meet its
obligations after being notified, works shall be carried out at its expense,
through the method deemed appropriate by the Royal Commission,
provided that the prevailing prices are not exceeded.
3) The warranty referred to in Article 142 of these Regulations shall not
include periodic or routine maintenance resulting from use, unless
otherwise, the cause is attributed, according to technical principles, to
defect in materials or performance.
Article 144:
Final acceptance of works in construction contracts shall be made after the expiry
of the warranty period referred to in Article 142 herein, and after the contractor
has performed its obligations and handed over the approved as built drawings,
Operation and Maintenance Manuals, systems and equipment specifications and
documents pertaining to the project as per the provisions set forth in the
construction contract.
Article 145:
1- In ongoing contracts, the department concerned with the contract shall
inspect and accept works after the expiry of the contract period and in
accordance with a minutes signed by either the contractor or its authorized
representative.
2- If any default or deficiency is found in works performed, the contractor

shall undertake to complete them. If the contractor fails to do so, after being
notified, works shall be carried out at its expense, and through the method
deemed appropriate by the Royal Commission, provided that prevailing
prices are not exceeded.

Chapter 20
Receipt of Supplied Items Article 146:
Without prejudice to the contents of the Royal Commission Warehouses
regulations, contractor shall deliver the items to the warehouses of the Royal
Commission, or to the place designated for delivery according to the contract.
Article 147:
1- The Department concerned shall temporarily receive items that require
inspection and an interim receipt notice shall be issued accordingly stating
items supplied. Items interim receipt date, if they are acceptable, shall be
considered the final acceptance date.
2- The supplier shall be notified of the date of Inspection and acceptance to

attend inspection and final acceptance process. The items acceptance or
rejection shall be deemed effective once approved by the Department
concerned.
3- If one item or more of the supplied items has been rejected, the supplier
shall be notified via registered letter of the rejected items and reasons
thereof and they shall be withdrawn and replaced within the period
specified by the department concerned.
The Royal Commission shall not be held responsible for what might occur
to the items such as loss or damage after the elapse of the period set for
their withdrawal.
4- If the supplier requests reinspection of the rejected items for nonconformity

with the specifications or approved sample, and such request is accepted,
the supplier shall bear inspection cost unless results come out in its favor.

Chapter 21
Auctions and Sale of Movable Assets
Article 148:
The Royal Commission may waive surplus movable assets to government
agencies. The Royal Commission will inform the government entities in the same
area of the types and quantities of the items, and set a time to express their interest
in the items. If they do not respond during that period or do not receive the
movable assets and move them within a period to be determined by the Royal
Commission, the Royal Commission may donate them to charitable societies or
public utility entities or sell them.
Article 149:
The items with total estimated value not exceeding (SR500,000) will be sold in
the way the Royal Commission deems appropriate to achieve its interest. The
items with the total estimated value exceeding the above amount, will be sold in
public auction in accordance with the by the Royal Commission applicable
procedures.
Article 150:
If the auction is in sealed envelopes, the bidder shall submit with its proposal an
initial guarantee of two percent (2%) of bid value.
Article 151:
If the bids are by far less than estimations, or nobody bids for the auction, the
following shall be taken into consideration:
a- If there is nobody bids for auction, the items shall be advertised again, and
if there is nobody bids for auction in second time the items shall be
disposed of.
b- If the highest offer price in the auction is less than the estimated prices by
twenty-five percent (25%) or more, the items shall be advertised again after
re-estimating them. If a suitable price is not obtained, the items may be
sold or disposed of in accordance with the provisions of Article 148 of

these Regulations.
Article 152:
The leasing and investment of Royal Commission owned real estates shall be in
accordance with the price set by the Royal Commission or through public auction
according to the Royal Commission established procedures.
Article 153:
Without prejudice to Articles 148 to 152 of these Regulations, and the contents
of warehouses Regulations of Royal Commission, the authorized person shall
form an estimation committee of not less than three members, to estimate the
value of items and movable assets to be sold, taking into account the condition,
cost, life span …etc and other elements affecting estimations. The estimated
prices shall be put in a sealed envelope.
Article 154:
The estimated prices envelope shall be opened by the chairman of the sale
committee only in the presence of committee members after auction bids opening
or after the end of public auction.
Article 155:
1- A committee shall be formed of not less than three members for conducting
the public auction or bids opening and evaluating the proposals for the
items to be sold in the auction through sealed envelopes.
2- The committee shall ensure soundness of envelopes, auction documents

and bank guarantees submitted, review prices and announce the proposals
prices to bidders present or their representatives.
3- The committee shall complete the auction procedures, determine best

proposals that meet the conditions of the auction and submit its minutes to
the authorized person to approve awarding.

4- In case of public auction, the committee shall prepare a minutes after the
end of the auction in which the auction procedures, price of the successful
bidder and the bank guarantee submitted are stated. Then, the minutes shall
be submitted by the committee to the authorized person to approve
awarding.
Article 156:
If items or movable assets will get damaged quickly while in storage, they may
be disposed of in accordance with the provisions of Article 148 of these
Regulations.
Article 157:
Awarding of auction shall be made within a period not exceeding thirty (30) days
(excluding official holidays) from the date of bids opening or closing of the public
auction. If such period passes without awarding the auction, the bidder may
revoke its proposal and return its bank guarantee by submitting a letter to the RC
within ten (10) days from the expiry of the period specified for the award. Any
bidder who does not submit its revoke letter within such period shall be
considered agreeing to continue with its offer.
Article 158:
The successful bidder shall pay the auction value within ten (10) days as of the
date of being notified of the award approval. If payment is delayed, it shall be
issued a warning notice via a registered mail. If payment has not been made
within fifteen (15) days from the date of the notice, its bank guarantee shall be
confiscated and auction will be awarded to the next bidder.
Article 159:
After payment of the value of sold items and movable assets, successful bidder
shall move out items within the period stipulated in the sale agreement. In case
of delay, it shall be given a warning notice via registered letter to move them out
within a period to be determined by the department concerned (maximum similar
period). If it fails to move them out, they shall be sold to the next bidder with
deduction of the difference between the two prices from the first bidder
guarantee.
The Royal Commission shall not be held liable to any loss or damage in sold
items and movable assets after expiry of the period specified to move them out.

Article 160:
Licensed brokers may be sought to conduct a public auction against a commission
paid by the successful bidder. The commission shall not exceed the common
percentage, with a maximum of 2.5% of sale amount.
Chapter (22) Compensation and Evaluation of Contractors

Performance
Article 161:
The Royal Commission may study contractors compensation requests and decide
on acceptable settlement to the two parties according to contractual terms and
Royal Commission approved procedures before resorting to the judicial
authorities.
Article 162:
In case of amendment by increase or decrease of customs tariff, fees, taxes, or
officially quoted materials or services (following date of proposal submittal), the
contract value shall accordingly be increased or decreased by the amount of
difference (as the case may be). Payment of difference due to increase shall be
made under the following conditions:
(a) The Contractor shall prove payment of customs tariff, fees, taxes or
officially quoted materials or services based upon increase categories
for supplying materials specified for the contract.
(b) Amendment of customs tariff, fees, taxes, or officially quoted materials

or services should not have been issued after expiry of the period
specified for performance of contract; or that contractor incurred such
costs due to contractor delay in executing Works, unless contractor
proves that the delay was for reasons beyond its control.

Article 163:
The Royal Commission evaluates its contractors performance during
implementation of its projects according to the contractors performance
evaluation program approved by the Royal Commission in accordance with the
approved procedures.
Chapter (23)
General Article
164:
The Royal Commission Board of Directors issues financial and administrative
powers to the Chairman of the Royal Commission to decide on the competitions,
purchases, auctions, real estate investment, and implementation of works. The
Chairman of the Royal Commission may delegate some of his powers to Royal
Commission officials.
Article 165:
In the event the delegated person exceeds his powers, the matter shall be referred
to the person who delegated his powers to take the action he deems appropriate,
whether by approving the action taken or taking another action.
Article 166:
The Royal Commission and other entities may act on behalf of each other under
an agreement signed by the two parties on contracting and implementation
procedures.
Article 167:
The Royal Commission, when needed and after agreement with the Ministry of
Finance, may implement some of its projects not listed in the budget.

Article 168:
The Royal Commission may lease a real estate or part thereof against construction
of facilities in accordance with conditions and specifications set out by the Royal
Commission, then the ownership of such facilities shall vest in the Royal
Commission in accordance with the Royal Commission established procedures.
Article 169:
Contracts may include insurance conditions (against different risks) through
insurance companies licensed to practice insurance activities in the Kingdom,
provided that insurance requirements shall be incorporated in competition
conditions. This is not applicable to the purchase of goods as long as the supplier
is contractually committed to deliver complete and sound goods to the Royal
Commission before receiving its dues.
Article 170:
In case the insurance company pays insurance compensation, it may not pay
insurance value to contractor or affected party unless after the Royal Commission
approval.
Article 171:
The Royal commission may include furnishings and furniture items within
construction contracts.
Article 172:
These Regulations are updated whenever needed.
Article 173:
The Royal Commission internal procedures are updated to conform to these
Regulations and modifications issued thereto.
Article 174:
These Regulations shall be effective as of the date of their approval.
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KIANGDOM OF SAUDI ARABIA ‫اململكة العربية السعودية‬

Royal Commission for Jubail and Yanbu

KINGDOM OF SAUDI ARABIA

Regulations of Contracts, Purchases, Procurement,

Contracts, Purchases, Procurement, and Implementation of Works Regulations 1

ts, Purchases, Procurement, and I

Bid Documents: Volume / Volumes that contain request for proposal

Contracts, Purchases, Procurement, and Implementation of Works Regulations 3

Contract: The legal document concluded by the Royal Commission with

Reimbursable Cost: Costs of contracts, salaries or materials or supplies and

Change Orders: Any modifications to the contract in accordance with its

Purchase Orders: A concise contractual format that is often used to purchase

Warranty: Contractor's commitment to the soundness of what he has

Cash Purchase: Use of financial petty cash, permanent and temporary

Initial Guarantee: A bank guarantee of 1% to 2% of the bid value submitted

B. Perform soil investigations and probing as required for construction

D. Incorporate training and qualification programs for their employees and

Contracts, Purchases, Procurement, and Implementation of Works Regulations 5

A- The public bidding shall be advertised in the Official Gazette and

In addition, the Secretariat General of the Chambers of Commerce

B- Advertising abroad shall be through the major newspapers in the

C- Bid advertisement shall include bid number, description, bidding

Contracts, Purchases, Procurement, and Implementation of Works Regulations 6

D- The Period from the date of issuance of the first advertisement in

A. Performing consulting and technical works, studies, preparation and

Contracts, Purchases, Procurement, and Implementation of Works Regulations 7

B. Purchase and rental of mechanical, electrical and electronic equipment,

C. Purchase of medical supplies.

D. Performance of high tech specialized projects and engineering,

2. Bidding conditions may include a clause that permits bid splitting at

Contracts, Purchases, Procurement, and Implementation of Works Regulations 8

Ongoing services such as maintenance, cleaning, operation, food catering and

A. The prequalification request shall be advertised at least in the official

B. Advertisement abroad shall be through the major newspapers in the

C. Prequalification advertisement shall include bid number, description,

Contracts, Purchases, Procurement, and Implementation of Works Regulations 9

A. Government employees with the exception of the following:

1. Non-commercial works if they are permitted to practice such

B. Prisoners who are found guilty during contracting process.

Contracts, Purchases, Procurement, and Implementation of Works Regulations 10

D. Bankrupt persons, or those who requested declaration of insolvency,

E. Dissolved or liquidated Companies.

F. Those who are under eighteen (18) years of age.

G. Persons lacking legal capacity.

H. Those not to be dealt with by virtue of an ordinance from legally

- The commercial registration or license in the field of work placed for

Contracts, Purchases, Procurement, and Implementation of Works Regulations 11

- Certificate of achievement of Saudization percentage prescribed by

2. The documents and licenses referred to in Paragraph (1) of this Article

A. All associated contractors shall be classified in the field of work and at

B. Associated contractors shall have the Royal Commission approval of

C. The association shall be formed prior to proposal submission by virtue

D. The association agreement shall include that the parties to the

E. The association agreement shall state the legal representative of the

F. The proposal documents shall be signed and stamped by the authorized

G. No party to the association shall be allowed to submit a proposal

H. The association agreement shall not be modified without the Royal

B. The electronic signature technology shall be used for receiving

4. If the price categories subjected to modification, erasing or blotting

Contracts, Purchases, Procurement, and Implementation of Works Regulations 14

1. The Royal Commission may request Bidders to submit an alternative

2. The original or alternative proposals shall be submitted under an

4. The bid shall be accompanied by original letter of initial bank

5. Copies of all documents specified in the bid documents shall be