Classification of companies in the Kingdom of Saudi Arabia

Classification of companies in the Kingdom of Saudi Arabia

Construction Contractor Classification in Saudi Arabia

The Saudi government has a system for classifying construction contractors based on their financial, technical, administrative, and operational capabilities. This system aims to ensure that government contracts are only awarded to qualified contractors who hold construction contractor classification certificates.

The classification grades are as follows:

  • Grade 1: This is the highest grade and is reserved for contractors with the highest level of capabilities.
  • Grade 2: This grade is for contractors with good capabilities.
  • Grade 3: This grade is for contractors with average capabilities.
  • Grade 4: This grade is for contractors with basic capabilities.

To be classified and obtain a certificate, a contractor must submit an application to the Construction Contractor Classification Agency (CCA) through the Baladi platform. The CCA will then assess the contractor's capabilities based on a number of factors, including:

  • The contractor's financial data, including financial statements and financial analysis of those statements.
  • The contractor's experience in completing projects in the Kingdom.
  • The number of key employees in the company and their key competencies.
  • The assets and equipment owned by the contractor.
  • The contractor's safety record.

The Construction Contractor Classification Agency will then award the contractor a classification grade. The contractor's classification grade will be valid for one year only.

Technical and Financial Classification Certificates

To obtain a classification certificate and classification grade, companies or institutions must obtain two classification certificates: a technical classification certificate and a credit rating certificate.

Technical Classification Certificate

This certificate refers to the company's human resources and its compliance with the procedures and regulations for hiring workers, the number of years of experience they have, as well as localization rates. Through it, you can obtain the certificate for technical classification.

Financial or Credit Rating Certificate

This is a financial certificate issued by one of the financial or credit rating agencies in Saudi Arabia, and it is specific to the financial and administrative strength of the establishment through the strength of its resources and its ability to manage those resources.

If you are a contractor in Saudi Arabia and want to maintain your classification, contractors must submit an annual update to the Construction Contractor Classification Agency. The update must include information about the contractor's financial performance, experience, employees, equipment, and safety record.

The construction contractor classification system is an important part of the Saudi government's efforts to ensure the quality of construction projects. By classifying contractors, the government can be confident in awarding government contracts only to qualified contractors.

Here are some of the benefits of the construction contractor classification system in Saudi Arabia:

  • It helps to ensure the quality of construction projects.
  • It helps to protect the public from unscrupulous contractors.
  • It helps to create a fair environment for all contractors.
  • It helps to improve the efficiency of the construction industry.

If you are a contractor in Saudi Arabia, it is important to be aware of the construction contractor classification system. By understanding the system, you can make sure that you are classified correctly and that you are qualified to bid on government contracts.

Here are some things you can do to improve your chances of being classified as a Grade 1 contractor:

  • Have a strong financial position.
  • Have a proven track record of completing projects on time and within budget.
  • Have a qualified and experienced workforce.
  • Have the necessary equipment and materials.
  • Have a good safety record.

By following these tips, you can increase your chances of being classified as a Grade 1 contractor and winning government contracts in Saudi Arabia.

Ibrahim Al-sulmi Company offers a comprehensive range of accounting and consulting services, including accounting, auditing, financial and tax consulting, and handling tax and zakat issues. The company has a distinguished team with high capabilities and practical experience in dealing with all types of cases.

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