Article 66 of the Saudi Government Tenders and Procurement Law
المادة 66 من نظام المنافسات والمشتريات الحكومية · الفصل الثالث: المقابل المالي
The Article allows the government entity to pay its contractor an advance payment against a bank guarantee equal to its value, as the Regulations explain.
Official text (Arabic)
This article has not been amended since the law was issued.
للجهة الحكومية أن تدفع للمتعاقد معها دفعة مقدمة مقابل ضمان بنكي مساوٍ لهذه القيمة، وفقاً لما توضحه اللائحة.
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 66 explained in plain English
This Article deals with the advance payment, which is an amount the government entity pays the contractor before he becomes entitled to it by performing the work, to help him start work.
The provision is permissive: the phrase "the government entity may pay" means that paying the advance is an authority of the entity and not a fixed right of the contractor under this Article alone; if the advance is not decided, the contractor cannot rely on this text to claim it.
The condition: The advance payment is paid against a bank guarantee equal to its value; if the advance is one million riyals, a bank guarantee of one million riyals is required. The purpose is to protect public funds if the contractor does not perform what corresponds to the advance.
Details are in the Regulations: The Article refers to the Implementing Regulations for the provisions on the advance payment, and the text does not set its maximum percentage or how it is recovered from the payment certificates, so reference is made to the Regulations and to the tender documents and the contract.
The Article comes between Article 65, which makes the contract value include fees and taxes, and Article 67, which refers payment of the contractor's dues to the Regulations. Anyone who wants to know whether his contract allows an advance payment should review the contract terms, or consult a lawyer who specializes in government contracts.
Practical example
A construction company in Abha contracted with a government entity to build a facility, and the entity decided to pay it an advance payment of SAR 500,000. The advance is paid only after the company provides a bank guarantee of SAR 500,000, as the Regulations explain.
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 66 of the Saudi Government Tenders and Procurement Law
Is a contractor entitled to demand an advance payment from the government entity?
The Article makes paying the advance permissive for the government entity, and it is not a right claimed under this text alone.
What is the condition for paying the advance payment?
That the contractor provides a bank guarantee equal to the value of the advance.
What is the percentage of the advance payment?
The Article does not set a percentage, and refers the details of the advance payment to the Implementing Regulations.
More articles on Payments, Price Adjustment and Change Orders
- Article 64
Contract values in government contracts are paid in Saudi riyals, and the entity may specify one or more other currencies in the tender documents with the Ministry of Finance's prior approval.
تدفع قيمة العقود بالريال السعودي، ويجوز أن تحدد الجهة الحكومية في وثائق المنافسة عملة أخرى أو أكثر على أن يكون ذلك بموافقة مسبقة من الوزارة.
- Article 65
The total value of a government contract includes all the costs of performing it, including fees and taxes, and neither they nor taxes on the contractor's profits or employees' incomes may be waived or paid for them except by a special legal provision.
تكون القيمة الإجمالية للعقد شــاملة جميع تكاليف تنفيذه وفقاً لشروطه، بما في ذلك قيمة الرسوم والضرائب التي يدفعها المتعاقد، ولا يجوز الإعفاء منها أو إعفاء أرباح
- Article 67
The Article refers the method of paying the contractor's dues from the government entity to what the Implementing Regulations of the Law explain.
تصرف مستحقات المتعاقد مع الجهة الحكومية وفقاً لما توضحه اللائحة.
- Article 68
The Article bars amending the prices of contracts and framework agreements up or down except in three specific cases, and refers the conditions and procedures to the Regulations.
لا يجوز تعديل أسعار العقود أو الاتفاقيات الإطارية بالزيادة أو النقص إلا في الحالات الآتية: 1- تغير أسعار المواد أو الخدمات الرئيسة الداخلة في بنود المنافسة والت
- Article 69
The Article allows the government entity, within its actual needs, to issue change orders increasing the contract by up to 10% of its value or reducing it by up to 20%, as the Regulations explain.
للجهة الحكومية -في حدود احتياجاتها الفعلية- إصدار أوامر تغيير بالزيادة في العقد بما لا يتجاوز (10%) من قيمته، ولها إصدار أوامر تغيير بالتخفيض بما لا يتجاوز (20%
- Article 86
The Article creates a committee, by decision of the Minister of Finance, competent over grievances of bidders and contractors and price adjustment requests; its decisions bind the entity, and the complainant provides a guarantee.
1- تكوّن بقرار من الوزير لجنة أو أكثر من المختصين، لا يقل عددهم عن خمسة ويحدد فيه رئيس اللجنة ونائبه، ويُنص في القرار على عضو احتياطي أو أكثر. ويعاد تشكيل هذه ا
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.