backThe Government Tenders and Procurement Law (“GTPL”), issued by Royal Decree No. (M/128) dated 13/11/1440H, (corresponding to 16/07/2019G), applies to all government agencies and regulates how Saudi government entities procure goods, services, and works. The GTPL sets out the rules for tenders, bids, contract awards, payments, termination and related procurement matters, while promoting transparency, fair competition and the protection of public funds.
The Implementing Regulations of the GTPL (the “Regulations”) provide detailed procedural guidance for the application and enforcement of the GTPL’s provisions.
The GTPL and its Regulations applies primarily to Saudi government procurement, but it also affects bidders by setting the rules they must follow throughout the tendering and contract-performance process.
The Amendments to the Implementing Regulations:
The amendments to certain articles of the Regulations were approved by the Minister of Finance pursuant to Ministerial Decision No. 1097, dated 09/12/1447H (corresponding to 26/05/2026G). This decision amended Articles 88, 111, 114, and 132 of the Regulations and entered into force upon publication in Umm Al-Qura, the Kingdom of Saudi Arabia's official gazette on 19/12/1447H (corresponding to 05/06/2026G).
- Article 88 (Contract Signing)
The amendments to Article 88 introduced new timelines and protections relating to the contract-signing process, balancing the interest of the bidder and the government entity in terms of contract deadlines and consequences for delay.
Article 88 now sets the maximum period for the government entity to set a contract-signing date at 30 working days, counted from when regulatory approvals are obtained.
If the winning bidder fails to sign:
- After a written warning, and
- After an additional 10 working days post warning, the bid may be excluded, the award decision cancelled based on a recommendation from the Bids Evaluation Committee, and the final guarantee confiscated. Consequently, the award shall pass to the next-ranked bid, or the tender shall be cancelled if there are no other acceptable bids.
Reciprocally, if the government entity fails to execute the contract within 35 working days from the date the final guarantee is submitted by the winning bidder (or from the date of the award in cases where a final guarantee is not required), the bidder may notify the government entity of its intention to withdraw. If 10 working days pass from the date of such notification without execution of the contract, any guarantees submitted shall be returned to the bidder, and the award shall pass to the next-ranked bid, or the tender shall be cancelled.
New rules were also added requiring the bidder’s proposed payment schedule to be agreed during the bid evaluation stage. A bidder may now reject a later payment schedule that differs from the agreed terms and may ultimately request withdrawal if the issue is not corrected by the government entity within 10 working days provided that the request is referred to the Bids Evaluation Committee for review and submission of recommendations. Consequently, any guarantees submitted shall be returned to the bidder, and the award shall pass to the next-ranked bid, or the tender shall be cancelled if there are no other acceptable bids.
- Article 111 (Contractor Payments)
No final payment can be disbursed until the contracted works have been finally completed or the procured items have been supplied. The prior requirement that final payment be not less than 10% of the contract value in public construction contracts, and not less than 5% in other contracts, has been removed in the amendment to Article 111.
Government entities may still divide the final payment in contracts with divisible works and release payments for completed and accepted portions.
- Article 114 (Additional Works)
The amendments introduce additional controls relating to variations and additional works.
Under the amended Article 114, government entities must evaluate whether an extension of the contract term is necessary before approving any increase in contract value. Where such an extension is required, its duration must be proportionate to the volume of additional works to be performed.
- Article 132 (Contract Termination)
A government entity’s desire to self-perform the works or perform the works through another contractor does not on its own qualify as valid public interest justification for termination. Furthermore, termination for public interest reasons does not become effective until 20 working days have elapsed from the date of notification.
Public interest grounds now include the following:
- Harm to security, health, or public safety, or a negative impact on the environment.
- Disruption to the work of other government entities, evidenced through minutes signed with the affected government entities.
- The occurrence of exceptional circumstances beyond the control of the government entity that prevent it from continuing performance of the contract.
- The absence of an actual need to complete the works or services that are the subject of the contract, based on a technical recommendation from the Expenditure Efficiency and Government Projects Authority or the government entity establishing that implementation of the contract is no longer beneficial.
The Amendments to the Tender Templates:
The other amendment was approved by the Minister of Finance pursuant to Ministerial Decision No. 1118 dated 22/12/1447H (corresponding to 08/06/2026) and published in Umm Al-Qura Gazette on 26 June 2026. It concerns the standard tender document templates used under the GTPL. The amendments affect several template categories, including but not limited to; operation and maintenance contracts, military supply contracts, and general construction contracts.
Next steps:
Government agencies should treat these amendments as a call to institutionalize tighter procedural discipline across the procurement and contract lifecycle. Taken together, government agencies should consolidate these requirements into updated procurement manuals, contract templates, and staff training, since compliance depends heavily on coordinated tracking of deadlines and approvals across procurement, finance, and legal functions.
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Additional Contributors: Nora Alsalamah