What is in a Saudi FM contract

That has one consequence worth sitting with: anything the contract does not say, nobody will decide for you later. There is no default position on who pays for a failed chiller compressor, no statutory response time, and no implied right to the maintenance history when the contract ends. Every one of those is a drafting choice.

Public-sector FM contracts carry an additional layer. They are governed by the Government Tenders and Procurement Law, and that law is changing: a new GTPL was published on 4 September 2026 and takes effect on 2 January 2027 Government Tenders and Procurement Law: in force · , replacing the law issued under Royal Decree M/128 of 2019, with implementing regulations still to come. If you are drafting or bidding government work across that boundary, check which law governs your contract and do not plan against penalty figures quoted from the outgoing regime. We are not publishing any here for that reason.

That repair-versus-replace boundary is the most common source of mid-term dispute in this market, and it is usually a single missing sentence. A compressor fails in year two. Is that a repair inside the fee, a repair chargeable as a variation, or a capital replacement for the client? A contract that does not answer it will produce a six-week argument and a strained relationship, every time it happens.

Borrowed benchmarks with undefined terms are unenforceable, and most SLAs in circulation are borrowed. Practice clusters around minutes to hours for P1 and days to weeks for P4, but the numbers are the easy part. The definitions are what get argued about at month eight.

Three definitions carry the weight. The clock starts at ticket creation in the CAFM, not at the phone call and not when the technician is dispatched. The working-hours calendar is named, including Fridays, public holidays and Ramadan hours. And the valid pauses are listed exhaustively: awaiting parts, awaiting client access, awaiting a third-party warranty response. An unlisted pause is not a pause.

One more: define what a P1 is in terms a helpdesk operator can apply at two in the morning without ringing anybody. If the definition requires judgement, the priority assigned will track how angry the caller sounded.

That last rule eliminates more bad KPIs than any amount of benchmarking. If producing the number requires someone to open a spreadsheet and make a judgement about which tickets to exclude, both parties will make a different judgement and the report becomes a negotiation.

An uncapped penalty regime does not buy better service. It gets priced into the bid, and you pay for it whether or not anything goes wrong. A capped regime with a cumulative failure threshold behind it works better: miss enough to cross the threshold and the contractor owes a rectification plan, then a step-in right, then termination. That escalation is what actually changes behaviour.

Consider an earn-back. A contractor who has already lost the maximum credit for the month has no financial reason to recover before the month ends, which is precisely backwards. Letting credits be earned back on sustained recovery keeps the incentive pointed forwards.

For government contracts the cap is set by the governing procurement law rather than negotiated. Confirm which version of the GTPL governs your contract and take the cap from the instrument itself.

Labour Law Article 18 addresses a change in the establishment's ownership or legal form, such as a merger or a partition: employment contracts remain in force, service is deemed continuous, and predecessor and successor are jointly and severally liable for accrued entitlements. That is a business transfer. Whether it reaches a service contract re-tender is a question for an employment lawyer with the facts in front of them.

The practical consequence for the programme is visa lead time. Transfers through Qiwa under the Labour Reform Initiative take as long as they take, and on a mobilisation plan that is usually the longest single item, longer than recruitment. Price it and schedule it first.

Then contract for the rest of the employment layer explicitly: Saudization band commitments under Nitaqat, Wage Protection System compliance, GOSI registration, and who bears iqama, medical and levy costs. Leaving those to be assumed is how a bid that looked competitive stops being deliverable.

The asset register is the deliverable that matters most and the one most often carried over unverified from the last contract. A tendered asset register that nobody has walked means every bidder priced a different building, and the cheapest bid is simply the one that guessed lowest.

Not owning the CAFM data is the quiet failure that compounds. Three years of maintenance history, asset condition and failure patterns sit in the contractor's system, and at re-tender the client goes back to market as blind as last time. Every subsequent bid is a guess, every mobilisation rebuilds the register, and the incumbent has a structural advantage nobody intended to give them.

The exit plan belongs in the contract at signature, not negotiated at termination: handover period, data and asset handback in a named format, spares transfer, and a duty to cooperate with the incoming provider. Alongside it, the commercial frame that stops the whole thing drifting: term and renewal, price review or indexation, variation pricing, performance bond and retention, assignment and novation, insurance limits, and termination both for convenience and for cause.

The three clauses worth an extra hour of anyone's time, because they cause most of the disputes: the repair-versus-replace boundary, the SLA clock definition, and CAFM data ownership.