The Kingdom Of Saudi Arabia Approves New Government Tenders And Procurement Law

The Council of Ministers of the Kingdom of Saudi Arabia approved the new Government Tenders and Procurement Law (GTPL) during its meeting held on 4 August 2026. The GTPL forms part of the government’s continuing efforts to modernize the regulatory framework for public procurement and reflects Saudi Arabia’s broader economic agenda. The GTPL is intended to enhance planning and execution efficiency, promote transparency, fairness, and equal opportunity in government tenders, and improve the overall quality and efficiency of government contracting.

In broad terms, the GTPL replaces several of the more prescriptive features of the previous law with a more flexible, efficiency-oriented framework. Key changes include a significant increase in procurement delegation limit, a reduction of Ministry of Finance review timelines, the introduction of a mechanism for transferring (through novation or assignments) government contracts, a higher contract variation threshold, and a consolidation of bid committees. These changes are expected to streamline procurement procedures, reduce administrative burdens, and enhance the contracting environment for both government entities and private sector participants. A summary of the key changes, together with a comparison against the previous law, is set out below.

Overview of the Key Changes Introduced by the GTPL

The most notable changes introduced by the GTPL are as follows:

• Increase in Procurement Delegation Limit – The contract value limit within which the head of a government entity may delegate the authority to decide on procurement procedures has increased to SAR 50 million.
• Reduction of Ministry of Finance Review Period - The Ministry of Finance's review period for government procurement contracts has been reduced to up to 4 working days.
• Transfer of Government Contracts - The GTPL introduces a mechanism allowing government contracts to be novated or assigned from one government entity to another.
• Delegation of Contract-Signing Authority - The GTPL allows the head of a government entity to delegate the authority to sign contracts and other documents requiring signature without any financial limit.
• Higher Contract Variation Threshold - The permissible threshold for increasing the value of a contract has been increased to 20%.
• Increased Direct Procurement Threshold - The financial threshold for direct procurement by a government entity has been increased to SAR 1 million.
• Committee Restructuring - The bid opening committee and bid evaluation committee have been consolidated into a single committee.

Increase in Procurement Delegation Limit

Under the previous law, the head of a government entity could delegate to another official the authority to make decisions in relation to procurement procedures relating to a contract with a value of up to SAR 10 million. The GTPL increases this limit to SAR 50 million, expanding the scope within which heads of government entities may delegate procurement decision-making authorities and potentially enabling faster and more efficient procurement processes.

Reduction of Ministry of Finance Review Period

Under the previous law, the Ministry of Finance had up to 15 working days to review government procurement contracts before they were signed with the relevant counterparty. The GTPL reduces this review period to four working days, which should shorten contract approval timelines and support more efficient project implementation.

Transfer of Government Contracts

The GTPL introduces a mechanism allowing government contracts to be transferred to another government entity through novation or assignment, which was not expressly provided for under the previous law. This development may give government entities greater flexibility in managing public contracts and reallocating contractual rights and obligations where the original contracting entity needs to novate or assign the contract. The specific conditions and procedural requirements governing such transfers remain to be confirmed upon publication of the full text of the GTPL and its implementing regulations.

Delegation of Contract-Signing Authority

The GTPL empowers the head of a government entity to delegate to other officials the authority to sign government contracts and any other documents requiring signature. This delegation may be granted without being subject to a financial limit, allowing the authorized official to sign relevant contractual and procurement-related documents regardless of their value. The provision is intended to provide government entities with greater administrative flexibility and to facilitate the timely execution of contracts and related documentation.

Higher Contract Variation Threshold

The GTPL raises the maximum permissible increase in a contract’s value from 10% to 20%. This higher threshold should provide government entities with greater flexibility to accommodate changes in scope, pricing, quantities, or implementation requirements during contract performance within the parameters set out in the law.

Increased Direct Purchase Threshold

The GTPL increases the financial threshold for using the direct purchase method from SAR 100,000 to SAR 1 million. This is expected to enable government entities to procure lower-value goods and services more efficiently and reduce the administrative burden associated with more formal procurement procedures.

Improvement in Limited Tendering

The Ministry of Finance’s announcement refers generally to the further development of the limited tendering method and expressly notes that government entities will be permitted to contract with independent professionals. This may broaden the pool of eligible service providers and give government entities greater access to specialized expertise, particularly where the required skills are held by individuals rather than firms or other entities. This represents a notable development for independent consultants and specialists seeking to engage directly with the public sector in the Kingdom.

Committee Restructuring and Member Incentives

The GTPL consolidates the bid opening committee and the bid evaluation committee into a single committee. This change is expected to streamline the tender review process and reduce the overall review timeline compared with the process under the previous law.

The GTPL also introduces incentives for committee members in connection with the performance of their duties, an area not addressed under the previous law. These incentives are likely intended to enhance committee effectiveness and encourage the timely completion of procurement procedures within the applicable statutory timelines.

Exemptions from Standstill Periods

Under the previous law, government entities were required, following the issuance and announcement of an award decision, to observe a mandatory standstill period of between five and 10 working days. During this period, the contract could not be signed, allowing bidders an opportunity to submit grievances against the award decision. The GTPL introduces exemptions from the mandatory standstill period for tenders whose nature does not require such a period. Further details regarding the scope, conditions, and procedural requirements of these exemptions are expected to become available upon publication of the official text of the GTPL and its implementing regulations.

Conclusion

The GTPL seeks to support private sector participation and promote equal opportunity by requiring government entities to process amounts due to private sector contractors within the prescribed timelines before entering into new contractual commitments. It also introduces uniform requirements for the provision of final guarantees (performance bond) across all companies, thereby promoting greater equality and a level playing field among market participants. Together, these measures are intended to foster a more predictable, fair, and equitable government contracting environment for the private sector in the Kingdom.

The GTPL will come into force on the date falling 120 days from the date of its publication in the Official Gazette, following which the full scope of the changes introduced under the new regime should become clearer. In addition to its implementing regulations, the GTPL provides for two additional regulatory frameworks: one governing research, development, and innovation, and another addressing localization and knowledge transfer. Together with the implementing regulations, these frameworks are expected to provide further detail on the operation of the new procurement regime and its alignment with Saudi Arabia’s broader economic and strategic objectives.