DUBAI: Saudi Arabia's government has approved a law to improve the way it procures contracts and services by saving money, making the process fairer, and boosting local bidders, the Finance ministry said late on Tuesday.
Saudi Arabia has embarked on a series of economic reforms, called Vision 2030, designed to free the kingdom from dependence on oil exports.
The new Government Tendering and Procurement law is an "important measure" within those reforms, the ministry said, as it helps to improve the government's fiscal position by maximising costs and improving the efficiency of financial planning.
"The law seeks to allocate and manage financial resources effectively, provides more transparency in all tenders and procurement procedures," Finance Minister Mohammed al-Jadaan said in a statement.
Among other changes, it introduces flexibility in the price of contracts and compensations in the case of increases in raw material prices, custom duties and taxes.
It also aims to ensure wider participation by small and medium enterprises by giving them priority over larger competitors and exempting them from providing initial guarantees.
(Reporting by Davide Barbuscia; editing by Jonathan Oatis) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: email@example.com))