The new Government Tenders and Procurement Law in Saudi Arabia: what changes for suppliers, and when

The Council of Ministers approved the new law in Decision 199, and Umm Al-Qura published the law on 4 September 2026 (22 Rabi al-Awwal 1448). Article 101 says it applies 120 days after publication. By our count that is about 2 January 2027; watch the Ministry of Finance for the exact date. Article 100 says the new law replaces the 1440 law issued by Royal Decree M/128.

If you are already in a government tender, read item Third of Decision 199. Tenders posted while the old law was in force stay under the old law. The Minister of Finance may still apply some provisions of the new law to them, through a mechanism the Minister sets.

Many details are not settled yet. Article 99 gives the Ministry 120 days from publication to issue the executive regulations, and Article 98 sets the same period for the local content and SME preference regulation. When we checked the MoF suppliers portal on 20 October 2026, we did not see the new executive regulations.

Article 32 lists the cases where a government entity may buy directly, without a public tender, after documenting its reasons. Case 3 matters most to small suppliers: direct purchase is allowed when the estimated cost of the works or goods does not exceed SAR 1 million, and in that case priority goes to local small and medium enterprises.

Article 42 adds a second benefit. An initial guarantee is not required for direct purchase or when the entity contracts with local SMEs. But there is a condition. If something happens that would normally cost a bidder its initial guarantee, an exempt bidder must pay the entity a fine equal to 2% of the bid value. If it does not pay within 60 working days, the case can go to the violations committee, which may bar it from dealing with government entities for up to one year.

So keep your SME size status current, and treat every offer as binding.

Article 39 sets bid validity at 90 working days from the date set for opening the bids. If you withdraw your bid during that time, your initial guarantee is not returned. The entity may extend validity, and you can agree to extend along with your guarantee, or decline and get the guarantee back.

Article 40 says the total price in your original bid must include all fees and taxes. A discount sent in a separate letter is ignored, even if it comes with the bid, and you cannot change your price after submission except where the law allows negotiation.

Article 41 sets the initial guarantee at 1% to 2% of the bid value, and a bid without it is not accepted, unless Article 42 exempts you. After the award, Article 50 requires a standstill period of 3 to 10 working days. During it, the contract cannot be signed, so other bidders can object to the award, and so can you.

Under Article 59, the winner submits a final guarantee of 5% of the contract value within 15 working days of being notified, and the entity may extend this once by the same period. It is not required when the contract value does not exceed SAR 300,000, or when you deliver all the awarded items and they are finally accepted within the guarantee period.

Article 70 caps the delay penalty at 6% of the value of a supply contract and 15% of other contracts. Higher rates need the Minister's prior approval and must be stated to bidders before they submit. Article 72 lists the cases for extending a contract and waiving the penalty, such as delays caused by the entity or by reasons outside your control.

Article 87 creates a committee for violations by bidders and contractors. It may bar a violator from dealing with government entities for up to five years, lower its classification, or instead fine it up to 10% of its total bid value. An appeal goes to the competent court within 60 days.

The law does not set a payment period. Article 65 says contractors are paid as the executive regulations will explain, so wait for that text before you plan cash flow on a government contract. Article 64 lets the entity pay an advance, or the full value in advance, against a bank guarantee of the same amount.

Article 91 is new pressure on late payers. The Ministry of Finance notifies an entity that is late in paying contractors. If the entity still takes no action, it may not issue a new award, as the regulations will explain.

Article 90 matters for distributors. Contracting is direct with those licensed to do the work, and intermediaries are not allowed. A distributor or an agent authorised by the original producer, or a franchise holder, is not counted as an intermediary.

If the entity breaks its obligations, Article 94 lets you go to the competent court for compensation, and arbitration needs the Minister's approval. This article is general information, not legal advice.

ENTEK is not Etimad and has no link to the Ministry of Finance or to any government entity. It does not publish government tenders, submit government bids, issue guarantees or register you with any authority. For government tenders, use Etimad and the MoF guides, and check every rule with the Ministry of Finance or the entity's tender booklet.

ENTEK works on the private side only. On ENTEK you receive RFQs from corporate buyers, submit bids and negotiate in rounds, with delivery options per line, and you get purchase orders when you win. You can track win rate and response time for your RFQs, and generate stamped commercial documents such as quotations and contracts.

Many of the habits the new law rewards also help in private RFQs: a full price that includes tax, a clear validity period, and an offer you can deliver on time. ENTEK does not promise RFQs or wins; it gives you one place to answer the private ones.