Saudi Arabia has issued a new Government Tenders and Procurement Law, published in the Official Gazette, Umm Al-Qura, on 22/3/1448 AH, corresponding to 4 September 2026. It replaces the law in force since 1440 AH (2019) and governs how government entities tender their works and purchases, and what they require of those who bid.
This is a practical summary for a company bidding on Saudi government tenders: when the law takes effect, the guarantees and deadlines it sets, how to complain, and where a partner comes in. The Arabic version is here.
What the new law is
It is the law approved by the Council of Ministers in Decision 199 of 21/2/1448 AH. It has 101 articles in seven parts: general provisions, contracting methods, bids and award, concluding and performing contracts, sale of movables, complaints, violations and grievances, and final provisions.
Its stated objectives include protecting public funds, achieving the best value for them at fair competitive prices, promoting integrity and competition, and equal treatment of bidders (Article 2).
When it takes effect
| Question | What the law provides |
|---|---|
| When does it apply? | 120 days after publication in the Official Gazette (Article 101), which puts it in early January 2027: 2 or 3 January depending on how the period is counted |
| What about the previous law? | The new law replaces the law issued by Royal Decree M/128 of 13/11/1440 AH and repeals whatever conflicts with it (Article 100) |
| And the implementing regulations? | Prepared by the Ministry of Finance with the Local Content and Government Procurement Authority within 120 days of publication, and in force from the day the law applies (Article 99) |
| And tenders already issued? | The previous law continues to apply to what was tendered while it was in force; the Minister of Finance may apply some provisions of the new law to them under a mechanism he sets (Council of Ministers decision, clause 3) |
Many articles refer the detail to the regulations. Until the new regulations are issued, do not build a bid on a detail that has not yet been written.
Contracting methods
Public tender is the rule: "all works and purchases shall be tendered in a public tender, except what is excepted under the provisions of the law" (Article 28). Alongside it the law regulates:
- Limited tender, in cases including works available only from a limited number of suppliers, urgent cases and consultancy services (Article 30).
- Two-stage tender, where final specifications and terms cannot be fully set because of the work's complexity (Article 31).
- Direct purchase, in cases including an estimated cost of up to SAR 1 million, with priority to local SMEs (Article 32). The limit under the previous law was SAR 100,000, according to the Ministry of Finance.
- Reverse auction (Article 33), contracting for industry localisation and knowledge transfer (Article 34), and competition for the best idea or design (Article 35).
Works and purchases may not be split to bring them within the direct-purchase authority (Article 27).
Guarantees: how much and when
| Guarantee | Amount and timing | When it is not required |
|---|---|---|
| Initial | 1% to 2% of the bid value, submitted with the bid; a bid without it is not accepted (Article 41) | Cases including direct purchase and contracting with local SMEs (Article 42) |
| Final | 5% of the contract value, within 15 working days of the winner being notified of the award (Article 59) | Cases including works worth no more than SAR 300,000 (Article 59) |
A winner who fails to submit the final guarantee in time forfeits the initial guarantee, and the entity negotiates with the next bidder.
Award, standstill and complaints
After the award decision and notification of bidders, the entity observes a standstill of no less than 3 and no more than 10 working days, during which the contract is not signed, so that bidders can complain (Article 50).
The complaint route, under Articles 84 and 85:
- To the government entity: within 5 working days of any decision before the award, or during the standstill if the complaint is against the award itself.
- Decision: the entity must decide within 15 working days; silence counts as rejection.
- To the committee: within 3 working days of rejection, the complainant may go to a committee formed by the Minister of Finance, whose decisions bind the entity.
The complainant deposits 0.5% of its bid value, or SAR 15,000 if the complaint is against a pre-qualification decision, refunded if the complaint is upheld.
After signing: what to know
- Delay penalties of up to 6% of a supply contract's value and 15% of other contracts, which may be raised with the Minister's prior approval if that was made clear to bidders beforehand (Article 70).
- Change orders: the entity may add new items up to 10% of the contract value with your consent, and increase or reduce existing items by up to 20% (Article 67).
- Price adjustment only in defined cases, including changes in the prices of key materials named in the regulations and changes in customs duties or taxes (Article 66).
- Advance payment is available against a bank guarantee, as the regulations provide (Article 64).
- Violations: the competent committee may bar a violator from dealing with government entities for up to five years, lower its classification, or impose a fine of up to 10% of its bid instead of the bar (Article 87).
Joint bids and subcontracting: where a partner comes in
The new law keeps both ways of bidding with another company:
- Joint bids: "bids may be accepted jointly, as the regulations provide" (Article 37). The detailed conditions await the new regulations.
- Subcontracting: not allowed without the entity's written approval; the contractor remains jointly liable with the subcontractor, and the entity may pay the subcontractor directly (Article 69).
The law also makes a local partner more than an option for a company coming from abroad: priority in dealing goes to local SMEs, local content and listed companies (Article 9), and when dealing with persons licensed outside the Kingdom the entity must make sure there is not more than one qualified, locally licensed person for the same work (Article 3).
If your tender asks for a classification, an accreditation or a local presence you do not hold, that is what Munaseq is for: we match you with up to three accredited partners that hold what you lack, each with the reason for the match, and arrange the first meeting.
- Find an accredited partner for your tender
- Hold accreditations? Let companies find you
- Etimad tenders: how the platform works and when you need a partner
Sources
- نظام المنافسات والمشتريات الحكومية, Umm Al-Qura, 22/3/1448 AH.
- Council of Ministers Decision 199 approving the law, Umm Al-Qura.
- أبرز التعديلات على نظام المنافسات والمشتريات الحكومية 1448هـ, Ministry of Finance.
This summary is general information, not legal advice. The law, its implementing regulations and the tender documents are what count.