Written consent is a prerequisite for “subcontracting”

The Ministry of Municipalities and Housing stressed the need for all contracting companies to obtain written approval from the relevant government entity, before concluding any subcontract with a contractor, undertaker, or other supplier.
The Ministry confirmed in a circular to the Federation of Chambers that this procedure comes within the framework of its keenness to guarantee the rights of all contracting parties, and in implementation of the Government Competition and Procurement System and its executive regulations, with the aim of implementing projects with the highest standards of quality and efficiency.

The Ministry noted that the Contractor Classification System issued by the Royal Decree stipulates in its third article that “Government agencies, bodies, institutions and agencies with public legal personality may not award or accept any offer or bid for any project subject to classification unless the contractor is classified and the project is located in The field, activity, and degree to which the contractor is classified.”
The Ministry also relied on Paragraph (1) of Article (71) of the Government Competitions and Procurement System, which states: “The contractor may not subcontract with another contractor, contractor, or supplier without obtaining written approval from the government entity, and the regulations specify the terms of the contract.” from the subcontract and its controls.”

In this context, the Ministry reviewed Article (18) of the Executive Regulations of the Government Competitions and Procurement System, which specifies the conditions for subcontracting, including: obtaining the prior approval of the government entity, and that contracts concluded with subcontractors include the quantities, work assigned to them, and contract prices with them. In accordance with the requirements, conditions and specifications of the project, and that the subcontractor is not one of the persons referred to in Article (14) of the regulations, and that he is licensed and classified in the field and to the required degree, and that the percentage of work increases Purchases assigned to the subcontractor are 30% of the contract value.
The Ministry revealed that it is in the process of updating the mechanism for classifying contractors and engineering consulting offices, adding new standards, including the “performance record” to evaluate the facility’s previous work, and the facility’s role in implementing the project (main, subcontractor), stressing that it will not approve any subcontractor project in the performance record unless Prior approval from the government entity is attached.

The Ministry stressed that obtaining written approval is a basic condition to ensure the integrity of procedures, and no subcontract will be approved unless prior written approval from the competent government authority is attached.
The Ministry called on all contractors to adhere to this procedure and communicate with the competent government authorities to obtain the necessary approvals before subcontracting, in order to guarantee their rights and not be exposed to legal accountability.