Saudi Contractors Authority set to launch Construction Standard Agreements

The building and construction sector is considered to be the second-largest non-oil sector in the Kingdom of Saudi Arabia. As the contracting industry represents an integral part of this sector, over the past decade the SCA has focused its aims on organizing and developing the contracting market, building distinctive productive competencies, and creating a safe environment in line with international standards.

To match these international standards, the Saudi Contractors Authority (SCA) is expected to officially launch the ‘standard agreements’ and ‘advisory services’ initiatives with the hope of stimulating sector growth and fostering an attractive investment environment in line with the requirements put forward in the Kingdom’s Vision 2030 plan.

Following the direction of the Kingdom’s Vision 2030 blueprint and the large-scale rollout of regenerative projects nationwide, the SCA aims to promote transparency and fair competition throughout the construction sector.

Through a series of new agreements, the authority is seeking to significantly reduce the percentage of stalled projects, whilst also adopting a mechanism for settling disputes and avoiding reliance upon the courts.

Via the SCA’s progressive ‘Muqawil’ platform, all standard agreements will be fully automated and linked with the Saudi National Digital Identity Management platform, to verify the parties to the agreement. Registering on the platform will be mandatory if contracting businesses wish to bid on Government projects.

Equally game-changing is the fact that the Muqawil platform enables owners and engaging parties to evaluate overall contractor performance and satisfaction. The SCA expects that providing transparency via the platform will spur a rise in the quality of services and works provided by contracting companies whilst providing conditions favorable for healthy competition.

Speaking to Arab News, the Saudi Contractors Authority said, ‘This initiative targets small and medium enterprises in the construction sector that are experiencing administrative or operational technical challenges, which negatively affects their performance, the implementation of these projects and the quality of their outputs.’

By streamlining the regulatory structure and instilling transparency across the board, the SCA hopes to increase the efficiency and speed of project implementation within the building and engineering sector.

The move is welcomed by industry leaders in the Kingdom at a time when the construction and engineering sector is again experiencing growth after the challenges of 2020.