Article 56 of the Saudi Government Tenders and Procurement Law
المادة 56 من نظام المنافسات والمشتريات الحكومية · الفصل الأول: صياغة العقود ومدد تنفيذها
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
1- لا تتجاوز مدة عقود الخدمات ذات التنفيذ المستمر، كالصيانة والنظافة والتشغيل والإعاشة، (خمس) سنوات، وتجوز زيادتها في العقود التي تتطلب طبيعتها ذلك؛ بعد موافقة الوزارة.
2- يجب في جميع العقود أن تتناسب المدة المحددة لتنفيذ المشروع مع حجم الأعمال وطبيعتها، ومع الاعتمادات السنوية المخصصة للصرف على المشروع.
3- تُضَمن عقود الخدمات ذات التنفيذ المستمر شروطاً تتعلق بمستوى الأداء والتقييم المستمر؛ بحيث يجوز للجهة الحكومية إنهاء العقد أو تقليص الدفعات إذا لم يكن الأداء مرضيًا، وتوضح اللائحة ما يلزم لتنفيذ حكم هذه الفقرة.
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 56 explained in plain English
This Article regulates the terms of government contracts, with particular attention to continuing service contracts, such as maintenance, cleaning, operation and catering.
1- The maximum for continuing service contracts: their term does not exceed 5 years. It may be increased in contracts whose nature requires it, on condition of the approval of the Ministry (the Ministry of Finance under Article 1).
2- The term must be proportionate in all contracts: the term set for performing the project must be proportionate to:
- The volume and nature of the work.
- The annual appropriations allocated for spending on the project.
So a short term that is not enough for performance is not set, nor a term that does not fit the budget available each year.
3- Performance conditions in continuing service contracts: these contracts include conditions on performance level and continuous evaluation, so that the government entity may terminate the contract or reduce payments if performance is not satisfactory. The Regulations explain what is needed to implement this provision.
The practical message to a contractor in service contracts is that the quality of his performance throughout the contract term matters; poor performance may lead to reduced payments or termination of his contract under the conditions included in it.
This Article relates to Article 55, which requires contracts to be drafted in Arabic, and to Article 57, which refers to the Regulations the setting of the types of contracts that government entities may use.
If you face reduced payments or termination of a contract because of a performance evaluation, consult a lawyer who specializes in administrative cases and government contracts.
Practical example
A cleaning company in Jeddah concluded a 3-year contract with a government entity that included conditions on performance level and continuous evaluation. When the evaluations came back unsatisfactory, the entity was permitted under those conditions to reduce payments or terminate the contract.
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 56 of the Saudi Government Tenders and Procurement Law
What is the maximum term of government maintenance and cleaning contracts?
It does not exceed 5 years, and may be increased in contracts whose nature requires it after the approval of the Ministry of Finance.
May the entity terminate a service contract for poor performance?
Yes. Continuing service contracts include performance and evaluation conditions allowing the entity to terminate the contract or reduce payments if performance is not satisfactory, and the Regulations explain what this requires.
On what basis is a project's performance term set?
It must be proportionate to the volume and nature of the work and to the annual appropriations allocated to the project.
More articles on Concluding the Government Contract and the Final Guarantee
- Article 55
The 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.
1- تُصاغ العقود ووثائقها وملحقاتها باللغة العربية، ويجوز استخدام لغة أخرى إلى جانب العربية على أن تكون العربية هي المعتمَدة في تفسير العقد وتنفيذه وتحديد مواصفا
- Article 57
The Article refers to the Implementing Regulations the determination of the types of contracts that government entities may use.
تحدد اللائحة أنواع العقود التي يجوز للجهات الحكومية استخدامها.
- Article 58
The Article allows government contracts to include clauses on transferring knowledge, training and operating skills to the employees of government entities.
يجوز تضمين العقود بنوداً تتعلق بنقل المعرفة والتدريب ومهارات التشغيل إلى موظفي الجهات الحكومية.
- Article 59
The 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.
1- يحرر العقد بين الجهة الحكومية وصاحب العرض الفائز بعد إبلاغه بقرار الترسية وتقديم خطاب الضمان النهائي. 2- يُمكّن المتعاقد معه في عقود الإنشاءات العامة من البد
- Article 60
The 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.
1- تلتزم الجهات الحكومية بعرض عقودها -التي تحددها اللائحة- على الوزارة لمراجعتها قبل توقيعها، وعلى الوزارة مراجعة تلك العقود خلال (خمسة عشر) يوم عمل من تاريخ ور
- Article 61
The 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.
1- يجب على من تتم الترسية عليه تقديم ضمان نهائي بنسبة (5%) من قيمة العقد، وذلك خلال (خمسة عشر) يوم عمل من تاريخ إبلاغه بالترسية. ويجوز للجهة الحكومية تمديد هذه
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.