In force
Saudi Government Tenders and Procurement Law
نظام المنافسات والمشتريات الحكومية
The Government Tenders and Procurement Law of Saudi Arabia. This page presents the official Arabic text of each article with plain-English explanations for residents and businesses.
- Articles
- 99
- In force
- 99
- Amended
- 0
- Issued
- 13/11/1440 AH
Issued by: مرسوم ملكي رقم ( م/128 ) وتاريخ 1440/11/13هـ · قرار مجلس الوزراء رقم ( 649 ) وتاريخ 1440/11/13هـ
Each article shows the official Arabic text, which is the only legally binding version, followed by our plain-English explanation.
Browse Government Tenders and Procurement Law by topic
General Provisions and Principles of Government Tenders26 articlesQualifying Bidders and Dealing Conditions6 articlesTender Documents and Specifications11 articlesPublic and Limited Tenders6 articlesDirect Purchase3 articlesFramework Agreements and Reverse Auctions6 articlesSubmitting Bids and the Initial Guarantee7 articlesExamining Bids and Award16 articlesConcluding the Government Contract and the Final Guarantee10 articlesPayments, Price Adjustment and Change Orders7 articlesAssignment and Subcontracting2 articlesDelay Penalty and Contract Extension4 articlesTerminating a Government Contract6 articlesSelling Government Movables6 articlesGrievances and Violations in Tenders6 articles
Articles of the Saudi Government Tenders and Procurement Law
الباب الأول: أحكام عامةArticles 1–27
- Article 1The article defines the key terms used in the Government Tenders and Procurement Law, such as government entities, the portal, the framework agreement, qualification, the standstill period, and emergency and urgent cases.
- Article 2The article sets out the Law's objectives: regulating procedures for works and procurement and preventing abuse of influence, achieving the best value for public funds, and promoting integrity, equality, transparency and economic development.
- Article 3The article requires government entities to deal only with licensed persons, and, when dealing with foreigners inside the Kingdom, to first confirm that there is not more than one qualified local person.
- Article 4The article provides that everyone who meets the conditions for dealing with a government entity is given equal opportunities and treated on an equal footing with others.
- Article 5The article requires clear, unified information about the required works and procurement to be provided to competitors, and requires that they be able to obtain it at a set time.
- Article 6The article subjects public tenders to three principles: openness, transparency and equal opportunity.
- Article 7The article provides that bids may not be accepted, and contracts may not be made on them, except in accordance with the provisions of the Government Tenders and Procurement Law.
- Article 8The article requires works and procurement to be put out and contracted within the government entity's actual needs, and at fair prices not exceeding prevailing market prices.
- Article 9The article gives priority in dealing to local small and medium enterprises, local content and companies listed on the financial market, and refers the mechanism to the preference regulation mentioned in Article 96.
- Article 10The article provides that the Government Tenders and Procurement Law applies to all government entities.
- Article 11The article subjects government works and procurement carried out outside the Kingdom to the Law's provisions, and allows exempting them from some provisions as the Implementing Regulations explain.
- Article 12The article requires government entities to plan their works and procurement in advance and publish an annual plan at the start of each fiscal year, without the publication creating any obligation.
- Article 13The article sets the Ministry of Finance's tasks in carrying out the Law, such as establishing the portal and publishing lists of persons barred from dealing, and lets the Minister approve forms of tender documents and contracts.
- Article 14The article sets the powers of the unified procurement entity, including consolidating common procurement, concluding framework agreements, reviewing feasibility studies, preparing forms and training.
- Article 15The article requires entities to buy what is on the unified procurement lists through its framework agreements unless it approves otherwise, and to submit feasibility studies and tender documents to it before putting them out, with specific exceptions.
- Article 16The article requires government tender and procurement procedures to be put out through the electronic portal, unless that is not possible for technical or security reasons, as the Implementing Regulations explain.
- Article 17The article sets the portal's requirements: top privacy, security and transparency, information access for interested parties, a record for each government entity, and a fee set by the Council of Ministers.
- Article 18The article requires those government entities deal with to meet the conditions needed to carry out works and secure procurement, and refers the details to the Implementing Regulations.
- Article 19The article requires the government entity to carry out pre-qualification or post-qualification, and where pre-qualification is carried out, limits the invitation to the tender to those who passed it.
- Article 20The article requires pre- or post-qualification criteria to be objective and measurable, relate to technical, financial and administrative capabilities and contractual commitments, and be proportionate to the project.
- Article 21The article requires tender documents to contain the works and procurement information as the Implementing Regulations specify, to be available electronically on the portal or on paper if technically impossible, and refers cost criteria to the Regulations.
- Article 22The article requires technical specifications to be detailed and precise, and bars reference to a particular brand or supplier except by a conditional exception, with no exaggeration and with persons with disabilities taken into account.
- Article 23The article requires the government entity, before setting the estimated cost, to study market prices carefully and set an upper limit for the expected contract value, and to put in place controls to keep the cost confidential.
- Article 24The article requires the government entity to set in the tender documents the criteria for evaluating, comparing and accepting bids, as the Implementing Regulations explain.
- Article 25The article requires non-price evaluation criteria to be objective, proportionate to the nature of the works and procurement, and quantifiable as far as practically possible.
- Article 26The article bars splitting works and procurement in order to bring them within the authority for direct purchase, limited tenders or the authority of delegated officials.
- Article 27The article allows bids submitted jointly to be accepted in government tenders, and refers the regulation of this to the Implementing Regulations.
الباب الثاني: أساليب التعاقدArticles 28–36
- Article 28The article makes the public tender the standard method for putting out all government works and procurement, except what is excepted under the Law's provisions.
- Article 29The article requires a public tender to be announced on the portal as the Implementing Regulations explain, and refers to the Regulations the means of announcement if that is not possible for technical reasons.
- Article 30The article allows the government entity to contract by limited tender in five cases, including those not exceeding SAR 500,000 in estimated value, urgent cases and consulting services.
- Article 31The article allows the government entity to put out a tender in two stages if the final technical specifications and contractual conditions cannot be fully and precisely determined because of the works' complex and specialized nature.
- Article 32The article sets six cases in which the government entity may contract by direct purchase, including weapons, an exclusive supplier, a value not exceeding SAR 100,000, and emergency cases.
- Article 33The article allows the government entity to conclude a framework agreement with the winner of the tender if quantities, the volume of works or services, or the time of execution cannot be determined.
- Article 34The article allows the government entity to use the electronic reverse auction on conditions: detailed specifications, a competitive market, bids received and ranked automatically through the portal, set dates, and information given to competitors.
- Article 35The article allows the Local Content and Government Procurement Authority, on its own initiative or at a government entity's request and with the Ministry of Finance's approval, to contract for localizing an industry and transferring knowledge.
- Article 36The article allows the government entity to contract for the best idea and design or other intellectual property rights by way of a competition, as the Implementing Regulations explain.
الباب الثالث: العروض والترسيةArticles 37–54
- Article 37The article requires bids to be submitted encrypted through the portal by the set deadline, allows sealed envelopes if the portal is technically unavailable, and requires the entity to announce the names of those who applied.
- Article 38The article allows the government entity to ask competitors to attach a sample of the required procurement to their bids.
- Article 39The article sets bid validity at 90 days from opening, with the initial guarantee not returned to a bidder who withdraws during it, and allows extension by another 90 days with the guarantee also extended.
- Article 40The article requires total prices and any increase or reduction to be stated in the bid letter itself, disregards a reduction in a separate letter, and bars changing prices after submission except where negotiation is permitted.
- Article 41The article requires the competitor to submit an initial guarantee of 1% to 2% of the bid value with his bid, and a bid without the guarantee is excluded.
- Article 42The article excepts five cases from the duty to provide the initial guarantee, including direct purchase, the competition, contracts among government entities, and contracting with local small and medium enterprises.
- Article 43The article provides for forming one or more bid-opening committees by decision of the head of the government entity or his delegate, as the Implementing Regulations explain.
- Article 44The article requires bids to be opened in the presence of all committee members when the receiving period ends, with minutes prepared, lets bidders attend, and requires referral to the examination committee within 3 days.
- Article 45The article governs forming the bid-examination committee, its tasks, the unified procurement entity's participation and recording its recommendations in minutes, and bars combining its chairmanship with award authority or with the opening committee.
- Article 46The Article requires bids to be examined against the tender documents' criteria, non-compliant bids excluded and their guarantees returned; where bids are split, technical bids are examined first, then the financial bids of accepted technical bids.
- Article 47The Article allows the bid examination committee to negotiate with the best bidder and then the next ones if the price is clearly above market prices or exceeds the approved amounts, and explains when the tender is canceled.
- Article 48The Article bars excluding a bid for its low price unless it is 25% or more below the estimated cost and market prices, after discussing it in writing with its holder and the committee is not satisfied of his ability to perform.
- Article 49The Article requires the government entity to announce the tender results and notify the other bidders, as the Implementing Regulations explain.
- Article 50The Article bars accepting a sole bid, or the only compliant one, unless its prices are similar to prevailing prices and with the approval of the head of the government entity, and refers tied bids to the Regulations.
- Article 51The Article sets out five cases in which a tender is canceled: fundamental errors in the documents, an uncorrectable improper procedure, signs of corruption or collusion, all bids violating the documents, and the public interest.
- Article 52The Article requires that on cancellation of a tender the bidders be refunded the value of the tender documents and the initial guarantees, as the Regulations explain.
- Article 53After the award decision is issued and announced, the Article requires the government entity to observe a standstill period of 5 to 10 working days in which the award may not be approved or the contract signed, so bidders can file a complaint.
- Article 54The Article gives the head of the government entity the authority to decide tenders, additional work, cancellation, contract termination, direct purchase and sale of movables, and sets the delegation ceilings.
الباب الرابع: إبرام العقود وتنفيذهاArticles 55–79
- Article 55The Article requires government contracts and their documents to be drafted in Arabic, allows another language alongside it with Arabic governing, and allows correspondence alone to suffice if the contract value does not exceed SAR 300,000.
- Article 56The Article caps continuing service contracts at five years unless the Ministry approves more, requires the term to fit the work, and requires performance and evaluation conditions allowing termination or reduced payments.
- Article 57The Article refers to the Implementing Regulations the determination of the types of contracts that government entities may use.
- Article 58The Article allows government contracts to include clauses on transferring knowledge, training and operating skills to the employees of government entities.
- Article 59The contract is drawn up with the winning bidder after he is notified of the award and submits the final guarantee letter, and in public construction contracts the contractor must be enabled to start within 60 days unless the documents say otherwise.
- Article 60The Article requires government entities to submit the contracts specified by the Regulations to the Ministry of Finance for review before signing; the Ministry reviews them within 15 working days or they are deemed approved.
- Article 61The Article requires the winning bidder to submit a final guarantee of 5% of the contract value within 15 working days, and explains the consequence of delay, the cases exempt from it and how long it is kept.
- Article 62The final guarantee in continuing service contracts is reduced annually according to what has been performed, provided it is never less than 5% of the value of the remaining works.
- Article 63The Article sets the accepted forms of guarantee in tenders and government contracts: a guarantee letter from a local bank, from a foreign bank through a local bank, or any form the Regulations specify.
- Article 64Contract values in government contracts are paid in Saudi riyals, and the entity may specify one or more other currencies in the tender documents with the Ministry of Finance's prior approval.
- Article 65The total value of a government contract includes all the costs of performing it, including fees and taxes, and neither they nor taxes on the contractor's profits or employees' incomes may be waived or paid for them except by a special legal provision.
- Article 66The Article allows the government entity to pay its contractor an advance payment against a bank guarantee equal to its value, as the Regulations explain.
- Article 67The Article refers the method of paying the contractor's dues from the government entity to what the Implementing Regulations of the Law explain.
- Article 68The Article bars amending the prices of contracts and framework agreements up or down except in three specific cases, and refers the conditions and procedures to the Regulations.
- Article 69The Article allows the government entity, within its actual needs, to issue change orders increasing the contract by up to 10% of its value or reducing it by up to 20%, as the Regulations explain.
- Article 70The Article bars the contractor from assigning the government contract or part of it to another contractor, undertaker or supplier without written approval from the government entity and the Ministry of Finance.
- Article 71The Article requires written approval from the government entity for subcontracting, allows direct payment to the subcontractor, and makes the contractor jointly liable with him for performing the contract.
- Article 72The Article imposes on a contractor who is late a fine not exceeding 6% of the value of a supply contract and 20% of other contracts, which may be increased with the Minister's approval if announced in advance.
- Article 73The Article imposes on a contractor who defaults in continuing service contracts a fine not exceeding 20% of the contract value, with deduction of the value of the work not performed.
- Article 74The Article sets five cases in which a government contract is extended and the contractor is exempted from the fine, and refers the rules and procedures for extension and exemption to the Regulations.
- Article 75The Article allows the government entity to withdraw part of the works and purchases and carry them out at the contractor's expense if he breaches his contractual obligations after being warned.
- Article 76The Article lists the cases in which a government entity must terminate a contract and those in which it may, and how the remaining work is re-tendered after termination.
- Article 77The Article allows a government entity to terminate a contract when the public interest requires it, or by agreement with the contractor after the Ministry's approval, in accordance with the Implementing Regulations.
- Article 78The Article requires the final guarantee to be forfeited when a contract is terminated for reasons specified in Article 76, preserves the entity's right to compensation, and refers the decision to the Article 88 committee to consider a ban.
- Article 79The Article requires the government entity to evaluate the contractor's performance after the contract is fully performed, using the performance evaluation form, and results are announced only once the evaluation is final.
الباب الخامس: بيع المنقولاتArticles 80–85
- Article 80The Article allows a government entity to transfer its surplus movables to other government entities, and if they do not want them, to sell them by public auction when their value is SAR 200,000 or more.
- Article 81Government movables with an estimated value below SAR 200,000 are sold by public auction or by a method serving the treasury's interest, with the widest possible number of bidders given the chance.
- Article 82The Article sets the guarantees for auctions of government movables: 2% with a sealed bid, raised to 5% for the winner, and 5% in an open auction, where a bank check or cash is accepted.
- Article 83The Article explains what happens if no one comes forward for an auction of movables: re-advertising, then inviting specialists, then possibly granting them to associations or non-profit entities, with notice to the Ministry.
- Article 84The Article refers to the Implementing Regulations the setting of auction procedures for government movables and how the sales committees are formed.
- Article 85The Article allows a government entity to meet some of its needs by renting, or to replace its movables with new ones, under rules set by the Implementing Regulations.
الباب السادس: النظر في الشكاوى والمخالفات والتظلماتArticles 86–88
- Article 86The Article creates a committee, by decision of the Minister of Finance, competent over grievances of bidders and contractors and price adjustment requests; its decisions bind the entity, and the complainant provides a guarantee.
- Article 87The Article regulates a bidder's right to file a grievance before the government entity and then before the Article 86 committee, the deadlines for deciding, and the effect of a grievance on completing contracting.
- Article 88The Article creates a committee to hear violations by bidders and contractors, which may ban a violator for up to 5 years, lower its classification or fine it up to 10%, with the right to challenge before the Administrative Court.
الباب السابع: أحكام ختاميةArticles 89–99
- Article 89The Article allows government entities to contract among themselves by direct agreement, provided the contracted entity performs or supplies itself, and to act on each other's behalf in contracting procedures.
- Article 90The Article requires government entities to contract directly with those authorized to work and bars brokerage, and a distributor or agent approved by the original producer is not a broker.
- Article 91The Article requires government entities to use the approved forms for contracts, tender documents, prequalification, contractor performance evaluation and any other document that the nature of the works or purchases requires.
- Article 92The Article requires the government entity to perform its contractual obligations, lets the contractor claim compensation before the Administrative Court if it breaches them, allows arbitration with the Minister's approval, and refers other dispute resolution means to the Regulations.
- Article 93The Article requires companies that carry out works and purchases on behalf of government entities to apply the provisions of the Government Tenders and Procurement Law.
- Article 94The Article provides that violating any provision of the Law exposes the responsible employee to disciplinary accountability under the applicable regulations, and lets the government entity bring a civil action where appropriate.
- Article 95The Article sets the way to exempt a provision of the Law: submission to the Prime Minister to form a committee of at least three members that studies the matter and submits what it sees fit.
- Article 96The Article tasks the Ministry of Finance with preparing three regulations: conflict of interest, conduct of those applying the Law, and preference for local content, small and medium enterprises and listed companies, issued by the Council of Ministers.
- Article 97The Article tasks the Minister of Finance with issuing the Implementing Regulations within 120 days of the Law's publication in the Official Gazette, to take effect from the date the Law takes effect.
- Article 98The Article provides that this Law replaces the Government Tenders and Procurement Law issued by Royal Decree No. M/58 dated 4/9/1427 AH, and repeals any provisions that conflict with it.
- Article 99The Article provides that the Government Tenders and Procurement Law takes effect after 120 days from the date of its publication in the Official Gazette.
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