Article 23 of the Saudi Government Tenders and Procurement Law
المادة 23 من نظام المنافسات والمشتريات الحكومية · الفصل الحادي عشر: التكلفة التقديرية
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
على الجهة الحكومية -قبل وضع التكلفة التقديرية للأعمال والمشتريات- القيام بالآتي:
1- دراسة أسعار السوق بشكل دقيق، وأن تراعي في ذلك تحديد حد أعلى للقيمة الإجمالية المتوقعة للعقد.
2- وضع الضوابط اللازمة للمحافظة على سرية التكلفة التقديرية.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 23 explained in plain English
This article governs what the government entity must do before setting the estimated cost of works and procurement, which is two things:
1. Studying market prices carefully: The entity must study market prices carefully, taking into account setting an upper limit for the expected total value of the contract. The estimated cost is not set arbitrarily but is built on market reality, and an expected ceiling for the contract value is set with it.
2. Confidentiality of the estimated cost: The entity must put in place the controls needed to keep the estimated cost confidential. The estimated cost is information the entity is careful to protect, and the article does not provide for making it available to competitors.
Why these provisions? Careful study helps achieve the best value for public funds under the Law's objectives, and confidentiality preserves the integrity of the tender. The article does not specify how the market is studied or the nature of the confidentiality controls; it requires the entity to do both.
Relation to other articles:
- Article 22 bars exaggerating technical specifications and exceeding the financial appropriations set aside for the project.
- Article 24 provides that the entity sets in the tender documents the criteria for evaluating, comparing and accepting bids as the Implementing Regulations explain.
A competitor who wants to understand the effect of these provisions on a particular tender may consult a lawyer who specializes in government contracts and administrative disputes.
Practical example
A government entity in Dammam is preparing to put out a tender to supply medical beds. Before setting the estimated cost, it studies market prices carefully, sets an upper limit for the expected value of the contract, and puts in place controls that prevent this cost from leaking to any potential supplier.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 23 of the Saudi Government Tenders and Procurement Law
Is a competitor entitled to know the estimated cost of the tender?
The article requires the entity to put in place the controls needed to keep the estimated cost confidential, and does not provide for making it available to competitors.
How does a government entity determine the estimated cost?
After studying market prices carefully, taking into account setting an upper limit for the expected total value of the contract.
Does the article set the confidentiality controls?
No. It requires the entity to put in place the necessary controls without detailing them.
More articles on Tender Documents and Specifications
- Article 5
The 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.
تُوفَر للمتنافسين معلومات واضحة وموحدة عن الأعمال والمشتريات المطلوبة، ويمكَنون من الحصول عليها في وقت محدد.
- Article 8
The 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.
يكون طرح الأعمال والمشتريات والتعاقد في حدود الاحتياجات الفعلية للجهة الحكومية، وبأسعار عادلة لا تزيد عن الأسعار السائدة في السوق.
- Article 21
The 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.
1- يجب أن تتضمن وثائق المنافسات المعلومات والبيانات الخاصة بالأعمال والمشتريات المطروحة وفقاً لما تحدده اللائحة. 2- يجب توفير نسخ إلكترونية لوثائق المنافسة في ا
- Article 22
The 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.
1- يجب أن تكون الشروط والمواصفات الفنية للأعمال والمشتريات المطروحة تفصيلية ودقيقة وواضحة، وأن تراعي المواصفات القياسية المعتمدة أو المواصفات العالمية فيما ليس
- Article 24
The article requires the government entity to set in the tender documents the criteria for evaluating, comparing and accepting bids, as the Implementing Regulations explain.
تحدد الجهة الحكومية في وثائق المنافسة معايير تقييم ومقارنة وقبول العروض وفقاً لما توضحه اللائحة.
- Article 25
The 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.
يجب أن تكون معايير التقييم غير السعرية موضوعية وتتناسب مع طبيعة الأعمال والمشتريات المراد طرحها، وأن تكون -بالقدر الممكن عملياً- قابلة للتحديد الكمي.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.