Article 41 of the Saudi Government Tenders and Procurement Law
المادة 41 من نظام المنافسات والمشتريات الحكومية · الفصل الثاني: الضمان الابتدائي
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 بالضمان الابتدائي.
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 41 explained in plain English
This article sets the rule of the initial guarantee, a guarantee the competitor provides with his bid to confirm his seriousness and commitment to it.
First: the percentage. The guarantee is provided at a percentage ranging from 1% to 2% of the bid value. The percentage is tied to the value of the competitor's own bid, not to the project's estimated cost.
Second: the consequence of not providing it. The text is explicit: a bid submitted without the guarantee is excluded. However good the bid or low its price, the absence of the guarantee takes it out of the tender.
Third: details in the Implementing Regulations. The article refers to the Implementing Regulations the setting of the provisions on the initial guarantee, such as its form and how it is submitted, which must be consulted for that.
Exceptions: This rule is not absolute; Article 42 expressly provides that, as an exception to this article, the initial guarantee is not required in five cases: direct purchase, the competition, contracts among government entities, contracting with a non-profit institution, association or entity, and contracting with local small and medium enterprises.
The article is also linked to Article 40, which requires prices to be stated in the bid letter, because the bid value stated in it is the basis for calculating the guarantee percentage.
If your enterprise's bid was excluded because of the guarantee, or you disagree with the entity over its percentage, consult a lawyer who specializes in administrative disputes and government contracts.
Practical example
A contracting company in Riyadh submitted a bid worth SAR 4,000,000. It must attach an initial guarantee of 1% to 2% of its bid value, that is, between SAR 40,000 and SAR 80,000. If it had submitted the bid without the guarantee, it would have been excluded.
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 41 of the Saudi Government Tenders and Procurement Law
What is the initial guarantee percentage in government tenders?
It ranges from 1% to 2% of the bid value.
What happens if I do not attach the initial guarantee to my bid?
A bid submitted without the guarantee is excluded.
Are there cases where the initial guarantee is not required?
Yes. Article 42 mentions five cases, including direct purchase and contracting with local small and medium enterprises.
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 40
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.
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 ل
- 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.