Article 8 of the Saudi Government Tenders and Procurement Law
المادة 8 من نظام المنافسات والمشتريات الحكومية · الفصل الثالث: المبادئ الأساسية
The article requires works and procurement to be put out and contracted within the government entity's actual needs, and at fair prices not exceeding prevailing market prices.
Official text (Arabic)
This article has not been amended since the law was issued.
يكون طرح الأعمال والمشتريات والتعاقد في حدود الاحتياجات الفعلية للجهة الحكومية، وبأسعار عادلة لا تزيد عن الأسعار السائدة في السوق.
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 8 explained in plain English
This article sets two controls governing every tender and contract a government entity makes:
1. Within actual needs: A government entity puts out works or procurement, and contracts for them, only to the extent of its real need. It may not buy quantities exceeding the need or request works the entity does not actually need.
2. Fair prices: Contracting must be at fair prices not exceeding prevailing market prices. The prevailing market price is the ceiling that may not be exceeded.
Why? Because among the Law's objectives in Article 2 are protecting public funds and achieving the best value for them at fair, competitive prices. Buying beyond the need or above the market price wastes public funds.
This article complements Article 7, which prevents accepting bids and contracting except in accordance with the Law's provisions, and Article 9, which gives priority in dealing to local small and medium enterprises, local content and companies listed on the financial market.
The article does not state how to measure prevailing prices or determine the need; other articles of the Law and its regulations regulate these details.
Practical example
A government entity needs 50 computers for its new employees, and one employee proposed buying 200 computers "as a reserve" at a price above their market price. This article limits putting out and contracting to the actual need and at a price not exceeding the prevailing market price.
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 8 of the Saudi Government Tenders and Procurement Law
May a government entity buy at a price above the market price?
No. The article requires contracting at fair prices not exceeding prevailing market prices.
May a government entity buy quantities beyond its need?
No. Putting out and contracting must be within the government entity's actual needs.
What is the purpose of this ruling?
Protecting public funds and achieving the best value for them, which are among the Law's objectives in Article 2.
More articles on General Provisions and Principles of Government Tenders
- Article 1
The article defines the key terms used in the Government Tenders and Procurement Law, such as government entities, the portal, the framework agreement, qualification, the standstill period, and emergency and urgent cases.
يقصد بالعبارات والمصطلحات الآتية -أينما وردت في هذا النظام- المعاني الموضحة أمام كل منها، ما لم يقتض السياق خلاف ذلك: النظام: نظام المنافسات والمشتريات الحكومية
- Article 2
The article sets out the Law's objectives: regulating procedures for works and procurement and preventing abuse of influence, achieving the best value for public funds, and promoting integrity, equality, transparency and economic development.
يهدف النظام إلى الآتي: 1- تنظيم الإجراءات ذات الصلة بالأعمال والمشتريات، ومنع استغلال النفوذ وتأثير المصالح الشخصية فيها؛ وذلك حماية للمال العام. 2- تحقيق أفضل
- Article 3
The article requires government entities to deal only with licensed persons, and, when dealing with foreigners inside the Kingdom, to first confirm that there is not more than one qualified local person.
1- تتعامل الجهات الحكومية عند تنفيذ أعمالها وتأمين مشترياتها مع الأشخاص المرخص لهم بذلك، طبقاً للأنظمة والقواعد المتبعة. 2- على الجهة الحكومية عند تعاملها مع أش
- Article 4
The article provides that everyone who meets the conditions for dealing with a government entity is given equal opportunities and treated on an equal footing with others.
يعطى جميع الأشخاص الراغبين في التعامل مع الجهة الحكومية، ممن تتوافر فيهم الشروط التي تؤهلهم لهذا التعامل؛ فرصاً متساوية ويعاملون على قدم المساواة.
- Article 5
The article requires clear, unified information about the required works and procurement to be provided to competitors, and requires that they be able to obtain it at a set time.
تُوفَر للمتنافسين معلومات واضحة وموحدة عن الأعمال والمشتريات المطلوبة، ويمكَنون من الحصول عليها في وقت محدد.
- Article 6
The article subjects public tenders to three principles: openness, transparency and equal opportunity.
تخضع المنافسة العامة لمبادئ العلانية والشفافية وتكافؤ الفرص.
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.