Article 47 of the Saudi Government Tenders and Procurement Law
المادة 47 من نظام المنافسات والمشتريات الحكومية · الفصل الرابع: فحص العروض وصلاحية التعاقد
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
للجنة فحص العروض التفاوض مع صاحب أفضل عرض ثم مع من يليه من المتنافسين في الحالتين الآتيتين:
1- إذا ارتفع سعر أفضل عرض عن الأسعار السائدة في السوق بشكل ظاهر، تحدد اللجنة مبلغ التخفيض بما يتفق مع تلك الأسعار، وتطلب كتابياً من صاحبه تخفيض سعره، فإن امتنع، أو لم يصل بسعره إلى المبلغ المحدد، فتتفاوض اللجنة مع صاحب العرض الذي يليه وهكذا مع بقية أصحاب العروض إلى أن يتم التوصل إلى السعر المحدد، فإن لم يُتوصل إليه تلغَ المنافسة.
2- إذا زادت قيمة أفضل عرض على المبالغ المعتمدة للمشروع، تطلب اللجنة كتابيًا من صاحبه تخفيض عرضه بما يتفق مع المبالغ المعتمدة، فإن امتنع أو لم يصل بسعره إلى المبلغ المطلوب، فتتفاوض اللجنة مع صاحب العرض الذي يليه وهكذا مع بقية أصحاب العروض إلى أن يُتوصل إلى سعر يتفق مع المبالغ المعتمدة، فإن لم يتم التوصل إليه؛ فللجهة الحكومية -بعد موافقة الجهة المختصة بالشراء الموحد- إلغاء بعض البنود أو تخفيضها للوصول إلى المبلغ المعتمد، على ألا يؤثر ذلك على الانتفاع بالمشروع أو ترتيب العروض, فإن تعذر إلغاء بعض بنود المشروع أو تخفيضها؛ تلغَ المنافسة.
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 47 explained in plain English
This Article gives the bid examination committee the power to negotiate with the holder of the best bid and then the next bidders in two cases only:
Case one: the price is clearly higher than the market.
- The committee sets the reduction amount in line with prevailing prices.
- It asks the holder of the best bid in writing to reduce the price.
- If he refuses or does not reach the set amount, it negotiates with the holder of the next bid, and so on with the remaining bids.
- If the set price is not reached, the tender is canceled.
Case two: the bid exceeds the amounts approved for the project.
- The committee asks the holder of the best bid in writing to reduce it in line with the approved amounts.
- If he refuses or does not reach the required amount, it negotiates with the next bidder, and so on.
- If a suitable price is not reached, the government entity may, after the approval of the body responsible for unified procurement, cancel or reduce some items, provided that this does not affect the use of the project or the ranking of the bids.
- If that is not possible, the tender is canceled.
Negotiation comes after the bids are examined under Article 46. It differs from the case of a low bid in Article 48, which does not allow a bid to be excluded for its low price unless it is 25% or more below the estimated cost and prevailing prices, and after discussion with its holder.
If you are asked to reduce your price and want to know your position, consult a lawyer who specializes in administrative cases and government contracts.
Practical example
The best bid in a tender for maintaining a government building came from a company, at an amount above the amounts approved for the project. The committee asked it in writing to reduce the price and it refused, so the committee negotiated with the next company, which did not reach the required amount. After the approval of the body responsible for unified procurement, the entity decided to reduce some items without affecting the use of the project or the ranking of the bids.
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 47 of the Saudi Government Tenders and Procurement Law
When may the bid examination committee negotiate with bidders?
In two cases: if the price of the best bid is clearly higher than prevailing market prices, or if its value exceeds the amounts approved for the project.
Must the request to reduce the price be in writing?
Yes. In both cases the committee requests the reduction from the bidder in writing.
What happens if all the bidders refuse to reduce?
In the first case the tender is canceled. In the second, some items may be canceled or reduced after the approval of the body responsible for unified procurement; if that is not possible, the tender is canceled.
More articles on Examining Bids and Award
- 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.
- Article 43
The 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.
تكوّن بقرار من رئيس الجهة الحكومية أو من يفوضه لجنة أو أكثر لفتح العروض، وفقاً لما توضحه اللائحة.
- Article 44
The 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.
1- تفتح العروض بحضور جميع أعضاء اللجنة في موعد انتهاء مدة تلقي العروض، ويعَد محضر بذلك، وفي الحالات التي تتطلب تقديم عرض فني مستقل عن العرض المالي، تفتح العروض
- Article 45
The 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.
1- تكوّن لجنة أو أكثر بقرار من رئيس الجهة الحكومية أو من يفوضه لفحص العروض، وفقاً لما توضحه اللائحة. وتتولى هذه اللجنة فحص العروض وتقديم توصياتها في الترسية على
- Article 46
The 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.
1- تفحص العروض وفقاً للمعايير المنصوص عليها في وثائق المنافسة، وتستبعد العروض المخالفة، وترد الضمانات الابتدائية لأصحابها. 2- في حال قدمت العروض في ملفين إلكترو
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.