The statutes have been reviewed with the aim of improving existing regulations. The grade of a contractor is a key factor when tenders are invited for various public and private sector projects and this will minimize the time required by contracting companies to prepare their bids.
It is hoped that the move will help speed up development work in the country.
“The grading will also help the contracting sector to keep pace with the rapid growth of the Kingdom in all spheres,” said Minister of Municipal and Rural Affairs Prince Mansour bin Miteb.
The prince said the new statutes incorporate all legal, financial, technical and administrative standards and increase transparency. The grade of a contractor is determined based on these standards, he added.
When a contractor applies for grading he should submit the documents to support his claim. The statutes emphasize the quality of the performance of a contractor, the minister said. The statutes do not, however, make any distinction between a Saudi and non-Saudi contractor when it comes to quality.
“The statutes also encourage small contractors to merge into large companies in order to attain high quality standards. … After a merger the grade of the new company may be reviewed,” the minister said.
Prince Mansour said the system for evaluation of a contractor is one of the main features of the new statutes. “When the experts at the ministry study the documents and statements accompanying an application for grading, they will visit the office and work sites of the contractor to verify the claims. The visit is also aimed at appraising the potentials of a contractor,” he said.
A basic factor in the grading process is the observations of a government department whose project the contractor has undertaken, Prince Mansour said.
The statutes also aim at making the contractor organize his work in line with the basic principles of accounting, financing, organizational matters with the help of good technical and administrative cadres, he said.
The statutes also provide for the reevaluation of a contractor after four years when the validity period of a grading certificate expires, the minister said, adding that the evaluation for the second grading will not be affected by a company's previous grading.
Saudi Arabia, the largest construction market in the Middle East, is currently witnessing a building boom with multi-billion dollar projects under way and many more in the planning stage by both the public and private sectors.
Population growth and surging oil revenues are the key dynamics stimulating both public and private sector investment in construction projects.
