The Subcontractor Framework Agreement is essential for businesses operating in Saudi Arabia that require regular engagement of subcontractors for various projects or services. This agreement type is particularly valuable when a main contractor anticipates multiple work packages or service requirements over time, as it streamlines the contracting process while ensuring compliance with Saudi regulations, including labor law, Saudization requirements, and Sharia principles. The framework structure allows for efficient deployment of subcontractors through individual work orders while maintaining consistent terms, standards, and protections. It includes comprehensive provisions for performance management, risk allocation, and dispute resolution, making it suitable for both technical services and construction projects. The agreement must align with Saudi Arabian commercial law and regulatory requirements while providing practical mechanisms for ongoing business relationships.
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1. Parties: Identification of the main contractor and subcontractor, including commercial registration details and authorized signatories
2. Background: Context of the framework agreement, business relationship, and general scope of intended services
3. Definitions: Key terms used throughout the agreement, including technical, commercial, and legal definitions
4. Scope of Framework: General description of services/works covered, process for work orders, and framework operation
5. Work Order Process: Procedures for issuing, accepting, and executing individual work orders under the framework
6. Subcontractor Obligations: Core duties, performance standards, compliance requirements, and delivery obligations
7. Main Contractor Obligations: Responsibilities including payment, information provision, and coordination
8. Pricing and Payment: Fee structure, payment terms, invoicing requirements, and VAT provisions
9. Performance Standards: Quality requirements, KPIs, and performance monitoring processes
10. Workforce Requirements: Labor law compliance, Saudization requirements, and workforce management
11. Health, Safety and Environment: HSE standards, compliance requirements, and reporting obligations
12. Insurance and Liability: Required insurance coverage, liability limits, and indemnification provisions
13. Confidentiality: Protection of confidential information and trade secrets
14. Intellectual Property: Ownership and usage rights of IP created during project execution
15. Term and Termination: Duration, renewal provisions, and termination rights
16. Force Majeure: Events constituting force majeure and consequent rights and obligations
17. Dispute Resolution: Dispute resolution procedures compliant with Saudi law
18. Governing Law: Confirmation of Saudi law application and Sharia compliance
19. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement
1. Parent Company Guarantee: Required when subcontractor's financial standing needs additional security
2. Performance Bond: Include when additional performance security is required for high-value or critical works
3. Anti-Corruption: Detailed provisions for public sector work or when working with government entities
4. Local Content Requirements: Detailed provisions when project falls under specific local content requirements
5. Environmental Compliance: Extended environmental provisions for environmentally sensitive projects
6. Quality Assurance: Detailed QA/QC provisions for technical or complex projects
7. Technology and Systems: For projects involving significant IT or technical systems
8. Training and Knowledge Transfer: When local workforce development is a key requirement
9. Emergency Response: For high-risk or critical infrastructure projects
1. Schedule 1 - Scope of Services: Detailed description of services/works covered under the framework
2. Schedule 2 - Pricing Schedule: Rate cards, price lists, and pricing mechanisms
3. Schedule 3 - Work Order Template: Standard form for individual work orders under the framework
4. Schedule 4 - KPIs and Performance Metrics: Detailed performance requirements and measurement criteria
5. Schedule 5 - Required Insurances: Specific insurance types and coverage levels required
6. Schedule 6 - HSE Requirements: Detailed health, safety, and environmental requirements
7. Schedule 7 - Forms and Procedures: Standard operational forms and procedures
8. Schedule 8 - Technical Standards: Applicable technical standards and specifications
9. Schedule 9 - Key Personnel: Required positions and minimum qualifications
10. Appendix A - Required Permits and Licenses: List of regulatory approvals required for performance
11. Appendix B - Compliance Requirements: Detailed regulatory and compliance obligations
Relevant legal definitions
Clauses
Relevant Industries
Construction
Oil & Gas
Infrastructure
Telecommunications
Manufacturing
Technology Services
Facilities Management
Engineering Services
Maintenance Services
Industrial Services
Transportation
Energy
Mining
Defense
Relevant Teams
Legal
Procurement
Commercial
Operations
Supply Chain
Risk & Compliance
Finance
Project Management
Engineering
Health Safety & Environment
Business Development
Contract Administration
Relevant Roles
Commercial Manager
Procurement Manager
Contract Manager
Project Manager
Legal Counsel
Operations Director
Supply Chain Manager
Technical Director
Chief Operating Officer
Compliance Officer
Risk Manager
Construction Manager
Engineering Manager
Facilities Manager
HSE Manager
Finance Director
General Counsel
Business Development Manager
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