Saudi Gazette report

RIYADH — Minister of Municipalities and Housing Majid Al-Hogail has approved new amendments to the executive regulations of the Saudi Contractors Classification Law. The amendments grant the contractor the ability to divide the project according to divisible areas, subject to specific conditions, including that the project value must be a minimum of SR600 million and that the value of the part to be divided must not be less than SR75 million.

Under the amended regulations, requests for classification, reclassification, upgrade, addition, deletion, or amendment must be decided within no more than 60 working days after the contractor completes all requirements. Requests for extension of classification certificate validity should be processed within 10 working days.

The amendments specify six cases under which contractors' expertise is not counted in implementing projects. These include cases under which the contract signing date precedes the commercial registration date, or if the project's scope does not fall within the contractor’s classification scope. These include cases under which the project is withdrawn from the contractor or it is proven that the contractor is not involved in project implementation. The amendments also include cases under which approval for subcontracting is not provided or the financial limit for permitted work is exceeded, or the required documents and data are not submitted.

Under Article 6, a contractor’s classification certificate is issued for the relevant field and activity and the appropriate grade, based on available information, data, and evaluation points. According to the amendments, classification certificate will be issued electronically, and that the owner must verify its validity through the ministry's website. The validity can be extended for a single period of 90 days. The contractor has the right to request an amendment to his certificate, whether by raising the grade or deleting the activity, within 90 days of its issuance.

The Ministry’s Agency for Regulating City Operators may cancel a contractor’s classification request if requirements are not fulfilled within 90 days after notification. The regulations emphasize the contractor's obligation to update his data if any legal change occurs to his status in the commercial register within 30 days. He also has the right to object to classification decisions before the competent committee within 60 days, and then to file a grievance before the Administrative Court.

It is noteworthy that the Saudi Contractors Classification is a system implemented by the Ministry of Municipalities and Housing that categorizes contractors based on their financial, technical and administrative capabilities. Through an evaluation process, contractors receive a classification grade from 1 (highest) to 5 (basic), which determines the size and type of government and major projects they are qualified to undertake. The classification certificate serves as a mandatory requirement for participating in government tenders.