Evaluation of Contract Administration for Public Projects in Saudi Arabia

1
Evaluation of Contract Administration for Public
Projects in Saudi Arabia

• By Khaled A. Al-Gunaiyan
• Nov 1992

2
Outline

• Objective
• Research Methodology
• Survey Results
• Conclusion
• Recommendations

3
Objective

• Study and evaluate the Saudi Government
  Procurement Laws and Regulation (GPLR) articles
  on construction contracts.
• Introduce measures that assist in effectively
  managing construction contracts of public
  projects.

4
Research Methodology

• Literature review, Background History
• Questioner Developing Survey
• Data Collection Analysis
• Findings
• Conclusion and Recommendation

5
GPLR

• Done by Ministry of Finance and National Economy
• Published in 1977
• 14 basic laws 40 regulations
• The main purpose is to govern the procurement
  process and forms the framework of construction
  contract conditions and administration.

6
Deficiencies

• NO major revision since 1977
• NO Systematical procedure for updating
• NO enforcement of articles
• NO substantial evaluation

7
Survey Methodology

• Question Design
• Tendering Phase
• Construction Phase
• Contract Administration
• Sent to 100 government agencies that have the
  authority to do contracts.

8
Results Analysis

• Bid Bond
• Contract Award
• Retainage

9
Bid Bond

• A guarantee that the contractor will enter into a
  contract if it is awarded to him.

10
Bid bond Survey Result
11
Contract Award

• Started at bid opening and ended at contract
  signing.

12
Contract Award Survey Result
13
Retainage

• Is an amount of money held from payment to the
  contractor according to terms of the agreement.

14
Retainage Survey Results
15
Conclusion

• A strong support to still use the current
  practice 1 of bid price as a bid bond
• Using a project estimate as a base for contract
  award was highly recommended
• The current practice of retaining the last
  payment of the contractor but not less than 10
  of the contract value received was supported

16
Recommendations

• GPLR articles should be visited, organized and
  updated periodically.
• Government authorities are urged to initiate a
  contract administration program where consultants
  and contractors are invited to participate.

17
Thank you

• Comments !