Procurement Glossary
Government Tenders and Procurement Law Explained
4 October 2026 · 7 min read · By NextBid Bid Experts
The Government Tenders and Procurement Law sets how Saudi agencies buy: methods, guarantees, grievances and the Etimad portal. Here is what it covers and what the 2026 replacement changes.
The Government Tenders and Procurement Law (نظام المنافسات والمشتريات الحكومية) is the Saudi law that governs how government agencies buy works, goods and services. It sets the principles, the contracting methods, the guarantees, the grievance route and the use of the Etimad portal, while the Implementing Regulations, issued by the Minister of Finance, supply the procedural detail.
Tenders issued while the 2019 law (Royal Decree M/128) is in force stay under it. A replacement law, Royal Decree M/76 dated 27/02/1448H, was published on 4 September 2026 and takes effect 120 days after publication. This guide explains the 2019 framework and flags what the new law changes.
What does the law cover, and which principles apply?
The law applies to all government agencies: ministries, government bodies, public authorities and institutions with an independent public personality. It aims to protect public funds, secure the best value at fair and competitive prices, promote integrity and competition, treat bidders equally and keep every procedure transparent. Works and procurements carried out abroad are covered too, with exemptions the regulations may set.
- Equal opportunity and equal treatment for every qualified bidder.
- Clear, uniform information about the required works, released at a specified time.
- Publicity and transparency for public tenders.
- Contracts only with licensed persons, at fair prices that do not exceed prevailing market prices.
- Priority for local small and medium enterprises, local content and companies listed in the Saudi capital market, applied through a separate preference regulation. See local content in Saudi government tenders.
Which contracting methods does the law allow?
A public tender is the default: all works and procurements go to public tender unless the law exempts them, and the tender is announced on the Portal. The law and regulations recognise seven other methods:
- Limited tender: a limited number of suppliers, urgent cases, works and procurements with an estimated value up to SAR 500,000, non-profit providers and consulting services.
- Two-stage tender: when specifications cannot be fixed in full because the work is complex or specialised.
- Direct purchase: for example a sole supplier, national security, emergencies, or an estimated cost up to SAR 100,000.
- Framework agreement: when quantities, volume or timing cannot be set in advance.
- Electronic reverse auction: successive lower bids within a set period, where specifications are detailed and the market is competitive.
- Industry localization and knowledge transfer: contracts concluded by the Local Content and Government Procurement Authority.
- Contest: a contract for the best idea or design.
Our guide to the methods of Saudi government procurement explains when buyers use each one.
Which guarantees and key terms should bidders know?
Guarantees are accepted as a bank letter of guarantee from a local bank, from a bank abroad through a local bank, or in another form the regulations prescribe. Bid bonds and performance guarantees on Etimad covers the practical steps.
| Term | What the 2019 law says |
|---|---|
| Initial guarantee | 1% to 2% of the proposal value, submitted with the proposal. A proposal without it is disqualified, except in cases such as direct purchase, contests and contracts with local small and medium enterprises. |
| Final guarantee | 5% of the contract value, due within 15 working days of the award notice and extendable once for a similar period. Contracts up to SAR 100,000 are among the exemptions. |
| Suspension period | 5 to 10 working days after the award is announced, during which the contract cannot be signed, so that bidders can appeal. |
| Pre-qualification | The agency's check of a bidder's capability before the bidder submits a proposal. |
| Post-qualification | The check of the bidder with the best proposal, after selection and before award. |
| Portal | The electronic portal for government procurement, under Ministry of Finance supervision. |
How are complaints handled?
A bidder may appeal to the agency against any decision taken before the award within 5 working days, and against the award itself within the suspension period. The agency must decide within 15 working days, and silence counts as rejection. The bidder can then go to the grievance committee formed by the Minister of Finance, which decides within 15 working days, extendable once, and whose decisions bind the agency. The appellant lodges a guarantee equal to half the initial guarantee, returned if the appeal succeeds, and the agency cannot proceed to contract while the suspension period or an unresolved appeal is open. See the Etimad grievance and appeal process.
What do Etimad and the Implementing Regulations add?
Government tenders must be published through the Portal unless that is technically infeasible or national security requires otherwise. The Ministry of Finance runs this through Etimad, where buyers offer tenders, examine bids and award, and suppliers view tenders and apply online. Proposals sent through the Portal are encrypted.
The Implementing Regulations set the working rules: the documents a bidder must hold, valid at bid opening (a commercial register or licence, Zakat and GOSI certificates, classification where required), the qualification rules, committee structure and bid validity. The Minister of Finance approves the standard tender forms, and the standard booklet states which law and regulations govern the tender.
What changes under the 2026 law?
The new law keeps the core: an initial guarantee of 1% to 2%, a final guarantee of 5%, public tender as the default and priority for local small and medium enterprises and local content. Among other changes, it revises the following:
| Topic | 2019 law | 2026 law |
|---|---|---|
| Bid validity | 90 calendar days | 90 working days |
| Suspension period | 5 to 10 working days | 3 to 10 working days |
| Direct purchase ceiling | SAR 100,000 | SAR 1 million |
| Limited tender on value alone (up to SAR 500,000) | Allowed | Removed as a ground |
| Final guarantee exemption up to | SAR 100,000 | SAR 300,000 |
| Opening and examination | Separate committees | One combined committee |
| Grievance committee and deposit | At least 5 members; half the initial guarantee | At least 3 members; 0.5% of the offer value |
| Ministry of Finance contract review | 15 working days | 4 working days |
New Implementing Regulations are due within 120 days of publication, and they will set details such as the cases exempt from the suspension period.
Check which law a tender runs under before anything else. Tenders issued while the 2019 law is in force stay under it, and the standard booklet names the law and regulations that govern the tender.
Frequently asked questions
Which law governs a Saudi government tender?
A tender follows the law in force when it was issued. Tenders issued while the 2019 law is in force stay under it, although the Minister of Finance may apply some provisions of the new law to them through a mechanism he sets.
When does the new Government Tenders and Procurement Law take effect?
It takes effect 120 days after its publication in the Official Gazette on 4 September 2026. The new Implementing Regulations are due within the same 120 days.
What is the difference between the law and the Implementing Regulations?
The law sets the principles, methods, limits and penalties. The regulations, issued by the Minister of Finance, set procedures such as required documents, committee rules and extension steps. The tender booklet then applies both to a specific tender.
Can a proposal be accepted without an initial guarantee?
No. A proposal submitted without the required initial guarantee is disqualified. The law exempts direct purchase, contests, contracts between government agencies, non-profit counterparts and local small and medium enterprises.
Where are government tenders published?
They are published through the Portal, which the Ministry of Finance runs on Etimad. Suppliers view tenders, buy booklets and submit offers there.
Our bid management team reads each booklet against the law and regulations behind it, turns every mandatory requirement into a compliance matrix and reviews the proposal before submission. If a tender raises a rules question, we are glad to look at it with you.