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Saudi Arabia procurement law to impact companies competing for government contracts

Published by , Editorial Assistant
World Cement,

Saudi Arabia’s new public sector procurement law, which will come into effect on 29 November 2019, known as the Government Tenders & Procurement Law (GTPL), covers all government projects and aims to streamline procurement and promote the use of local companies on public sector works.

The new law centralises tendering and contracting across government ministries and agencies, and removes the need for a full public tender for particular works and services.

It also includes a provision for prioritising local companies, small and medium-sized enterprises, and Saudi-listed companies over foreign companies for government contracts.

“The new government procurement law will have a significant impact on companies competing for government contracts in Saudi Arabia,” said Richard Thompson, Editorial Director at GlobalData. “It will introduce greater flexibility and transparency in procurement in the kingdom and also increase the requirement for companies to meet the country’s strategic goals, such as sourcing supplies from the local market.

“Saudi Arabia is embarking on a complete restructuring of its economy that involves huge levels of investment, but it also requires rewriting the playbook for the way the capital projects are delivered. The new law is an important part of this process.

“Riyadh wants to streamline project delivery in the kingdom, remove the corruption, create jobs and business opportunities, and attract investment.”

GTPL is expected to pave the way for the establishment of an entity in charge of unified strategic procurement.

The Saudi government approved the new GTPL in July and published it in the kingdom’s official gazette on 1 August. It replaces the previous law, which was issued in 2006.

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