Article 76 of the Saudi Government Tenders and Procurement Law
المادة 76 من نظام المنافسات والمشتريات الحكومية · الفصل الثامن: إنهاء العقود
The Article lists the cases in which a government entity must terminate a contract and those in which it may, and how the remaining work is re-tendered after termination.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يجب على الجهة الحكومية إنهاء العقد في الحالات الآتية:
أ- إذا تبين أن المتعاقد معه قد شرع -بنفسه أو بوساطة غيره بطريق مباشر أو غير مباشر- في رشوة أحد موظفي الجهات الخاضعة لأحكام النظام أو حصل على العقد عن طريق الرشوة أو الغش أو التحايل أو التزوير أو التلاعب أو مارس أيًا من ذلك أثناء تنفيذه للعقد.
ب- إذا أفلس المتعاقد معه، أو طلب إشهار إفلاسه، أو ثبت إعساره، أو صدر أمر بوضعه تحت الحراسة، أو كان شركة وجرى حلها أو تصفيتها.
ج- إذا تنازل المتعاقد معه عن العقد دون موافقة مكتوبة من الجهة الحكومية والوزارة.
2- يجوز للجهة الحكومية إنهاء العقد في الحالات التالية:
أ- إذا تأخر المتعاقد معه عن البدء في العمل، أو تباطأ في تنفيذه، أو أخلّ بأي شرط من شروط العقد ولم يصحح أوضاعه خلال (خمسة عشر) يوماً من تاريخ إبلاغه كتابة بذلك.
ب- إذا توفي المتعاقد معه. وفي هذه الحالة ينهى العقد وتسوى المستحقات وتعاد الضمانات. وللجهة الحكومية الاستمرار في التعاقد مع الورثة -بعد موافقتهم- على أن يتوافر لديهم المؤهلات الفنية والضمانات اللازمة لإكمال تنفيذ العقد.
ج- إذا تعاقد المتعاقد معه لتنفيذ العقد من الباطن دون موافقة مكتوبة من الجهة الحكومية.
3- يجوز في حال إنهاء العقد، طرح الأجزاء المتبقية منه بالأسلوب الذي طرحت به الأعمال والمشتريات، وللجهة الحكومية توجيه دعوة لإجراء منافسة محدودة لأصحاب العروض التي كانت تلي العرض الفائز في الترتيب، بحيث يُطلب منهم تقديم عروض جديدة ويجرى تقييمها وفقاً لأحكام النظام.
4- تحدد اللائحة الشروط والإجراءات اللازمة لتطبيق أحكام هذه المادة.
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 76 explained in plain English
This Article divides the grounds for terminating a government contract into mandatory termination, where the entity has no choice, and discretionary termination, which the entity decides on.
First: the entity must terminate the contract if:
- it becomes clear that the contractor, personally or through others, directly or indirectly, has attempted to bribe an employee of the bodies subject to the Law, or obtained the contract through bribery, fraud, deception, forgery or manipulation, or engaged in any of these during performance.
- the contractor is declared bankrupt, applies for a declaration of bankruptcy, is proven insolvent, is placed under sequestration by order, or is a company that has been dissolved or liquidated.
- the contractor assigned the contract without written approval from the government entity and the Ministry.
Second: the entity may terminate the contract if:
- the contractor is late in starting, slow in performing, or in breach of any contract condition, and does not correct its position within 15 days of being notified in writing.
- the contractor dies; in that case the contract is terminated, dues are settled and guarantees are returned, and the entity may continue with the heirs, with their consent, if they have the necessary technical qualifications and guarantees.
- the contractor subcontracted performance without written approval from the government entity.
Third: after termination, the remaining parts may be tendered in the same way the works were originally tendered, and the entity may invite the bidders ranked after the winning bid to a limited competition to submit new offers, which are evaluated under the Law.
The Implementing Regulations set the necessary conditions and procedures. This Article is preceded by Article 75, which permits partial withdrawal at the contractor's expense, and followed by Article 77, which permits termination in the public interest or by agreement. A person who receives a termination notice would do well to consult a lawyer specialized in government contracts and administrative cases.
Practical example
A contracting firm in Buraidah was late starting a government project, and the entity notified it in writing to correct its position. Fifteen days passed without work starting, so the entity became entitled to terminate the contract and then invite the next-ranked bidders to a limited competition to complete the remaining work.
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 76 of the Saudi Government Tenders and Procurement Law
When must a government entity terminate a contract?
When bribery, fraud, forgery or the like is established, when the contractor is bankrupt, insolvent, or the company is dissolved or liquidated, or when the contractor assigns the contract without written approval from the entity and the Ministry.
Is a government contract terminated if the contractor dies?
The entity may terminate it, settle dues and return guarantees, or it may continue with the heirs, with their consent, if they have the necessary qualifications and guarantees.
How long does a contractor have to correct its position before the contract is terminated?
15 days from the date it is notified in writing of the delay, slow progress or breach of the contract conditions.
More articles on Terminating a Government Contract
- Article 56
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.
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
- Article 77
The Article allows a government entity to terminate a contract when the public interest requires it, or by agreement with the contractor after the Ministry's approval, in accordance with the Implementing Regulations.
للجهة الحكومية إنهاء العقد إذا اقتضت المصلحة العامة ذلك، أو إذا تم الاتفاق على الإنهاء مع المتعاقد معه وذلك بعد موافقة الوزارة، وفقاً للشروط والإجراءات التي توض
- Article 78
The Article requires the final guarantee to be forfeited when a contract is terminated for reasons specified in Article 76, preserves the entity's right to compensation, and refers the decision to the Article 88 committee to consider a ban.
يجب عند إنهاء العقد بموجب الفقرة (1) أو الفقرة (2 / أ) أو الفقرة (2 / ج) من المادة (السادسة والسبعين) من النظام، مصادرة الضمان النهائي وذلك دون إخلال بحق الجهة
- Article 79
The Article requires the government entity to evaluate the contractor's performance after the contract is fully performed, using the performance evaluation form, and results are announced only once the evaluation is final.
تتولى الجهة الحكومية تقييم أداء المتعاقد معها بعد اكتمال تنفيذه للعقد، وذلك باستخدام نموذج تقييم أداء المتعاقدين. ولا تعلن نتائج تقييم أداء المتعاقدين؛ إلا بعد
- Article 92
The Article requires the government entity to perform its contractual obligations, lets the contractor claim compensation before the Administrative Court if it breaches them, allows arbitration with the Minister's approval, and refers other dispute resolution means to the Regulations.
1- على الجهة الحكومية تنفيذ التزاماتها في العقد وفقاً لشروطه، وإذا أخلت بتنفيذ التزاماتها جاز للمتعاقد معها التقدم إلى المحكمة الإدارية للمطالبة بالتعويض. 2- لل
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.