Tender and Procurement is a process often utilised by governments, which allows them to place specific jobs up for bid to the private sector. Work on such a scale is regularly competed for by many entities due to the relatively secure nature. However, this also means that the stakes are quite significant for the companies and entities bidding.

Saudi Arabia had a regulatory structure in place concerning Tender and Procurement, and the law which has covered the matter first arose in 2006. Saudi is one of the most significant and vital economies in the world, though it has also seen profound changes to its legal structures to ensure it is on the level of the other world leaders.

One such change is that of the law surrounding Tender and Procurement. To ensure more rapid and substantial growth of the economy, one area which must receive attention is that of preventing corruption of any form. The new law looks to do just that.

New Tender and Procurement Law

The new law will replace the original from 2006 and seeks to prevent any individual interests from influencing how the Tender and Procurement process is carried out and how the winners of the bids are decided.

Under the new rule, there may now arise two forms of tenders. There is the standard Invitation to Bid, as well as the less common, Request for Proposal bids. RFP relates to products or projects with more unique requirements, and thus, more exceptional expertise is necessary. Price is not the only concern.

There are also further changes to the methods of dispute resolution. The arbitration will be a primary method, and this will mean that disputes can receive settlements more quickly and with significant expertise. Further to this, termination of the contracts will now also be possible in the case of consistent delays and similar roadblocks.

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