Article 40 of the Saudi Government Tenders and Procurement Law
المادة 40 من نظام المنافسات والمشتريات الحكومية · الفصل الأول: تقديم العروض
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يجب أن تحدد الأسعار الإجمالية وما يرد عليها من زيادة أو تخفيض في خطاب العرض، ولا يعتد بأي تخفيض يقدم بوساطة خطاب مستقل حتى لو كان مرافقاً للعرض.
2- لا يجوز للمتنافسين -في غير الحالات التي يجوز التفاوض فيها وفقاً لأحكام النظام- تعديل أسعار عروضهم بالزيادة أو التخفيض بعد تقديمها.
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 40 explained in plain English
This article aims to make prices in the tender clear and fixed, so no one is surprised by a change after the bids are submitted. It contains two rules:
1- All prices in the bid letter: The total prices and any increase or reduction on them must be stated in the bid letter itself. No reduction is taken into account if it is submitted in a separate letter, even if it accompanies the bid. So if a competitor wants to offer a discount, he must include it in the bid letter, or it is not counted.
2- No changing prices after submission: Competitors may not amend the prices of their bids, up or down, after submitting them. The only exception is the cases in which negotiation is permitted under the Law's provisions.
The reason is to protect the principle of equality among competitors, because allowing a price to be lowered after seeing others' bids opens the door to manipulation and harms whoever stood by his bid.
This article is linked to Article 39, which makes a bid valid for 90 days from the date set for opening the bids, so the price a competitor submits binds him during that period. It is also linked to Article 41, which requires an initial guarantee of 1% to 2% of the bid value.
If a discount you offered was rejected, or you want to know whether your tender falls within the negotiation cases, consult a lawyer who specializes in administrative disputes and government contracts.
Practical example
An establishment in Khobar submitted its bid in a government tender and attached a separate letter granting a 5% discount. Under the article, this discount is not taken into account because it is in a separate letter; it should have included it in the bid letter itself.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 40 of Government Tenders and Procurement Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Administrative Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Administrative Law (Board of Grievances) lawyers
Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Active contributor
Unwan Law Firm
Frequently asked questions about Article 40 of the Saudi Government Tenders and Procurement Law
May a price discount be offered in a separate letter?
No reduction is taken into account if submitted in a separate letter, even if it accompanies the bid; it must be in the bid letter.
Can a bid price be changed after it is submitted?
It may not be changed up or down after submission, except in the cases where negotiation is permitted under the Law's provisions.
Where must the total prices be stated?
In the bid letter, along with any increase or reduction on them.
More articles on Submitting Bids and the Initial Guarantee
- Article 37
The 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.
1- تقدم العروض مشفرة من خلال البوابة، وفق ما تحدده اللائحة. 2- تقدم العروض في الموعد المحدد لقبولها، ولا يجوز قبول العروض التي تقدم بخلاف ذلك. 3- يجوز قبول العر
- Article 38
The article allows the government entity to ask competitors to attach a sample of the required procurement to their bids.
للجهة الحكومية طلب إرفاق عينة من المشتريات المطلوبة.
- Article 39
The 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.
1- تكون مدة سريان العروض في المنافسات (تسعين) يوماً من التاريخ المحدد لفتح العروض، فإن سحب مقدم العرض عرضه خلال هذه المدة فلا يعاد إليه ضمانه الابتدائي. 2- يجوز
- Article 41
The 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.
1- يُقدم المتنافس مع عرضه ضماناً ابتدائياً بنسبة تتراوح من (1%) إلى (2%) من قيمة العرض. ويستبعد العرض الذي لم يقدم معه الضمان. 2- تحدد اللائحة الأحكام المتعلقة
- Article 42
The 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.
استثناء من حكم المادة (الحادية والأربعين) من النظام، لا يلزم تقديم الضمان الابتدائي في الحالات الآتية: 1- الشراء المباشر. 2- المسابقة. 3- تعاقدات الجهات الحكومي
- Article 63
The 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.
تقبل الضمانات إذا كانت وفق أحد الأشكال الآتية: 1- خطاب ضمان بنكي من أحد البنوك المحلية. 2- خطاب ضمان بنكي من بنك خارج المملكة يقدم بوساطة أحد البنوك المحلية. 3-
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.