As Saudi Arabia steps up efforts to strengthen discipline in public procurement and contract execution, the government has approved a new Government Tenders and Procurement Law aimed at enhancing governance, transparency and the efficiency of the procurement system.
Asharq Al-Awsat has learned that the Ministry of Finance has warned domestic private-sector companies that contract award and contracting procedures must be completed in accordance with the approved regulations before work begins on any government project, service or procurement.
The Cabinet on Tuesday approved the new Government Tenders and Procurement Law to strengthen governance and transparency, improve planning and execution, and promote clarity, fairness and equal opportunity in competitive bidding and contractual dealings.
Finance Minister Mohammed Al-Jadaan said the law builds on the Kingdom’s efforts to develop the regulatory framework supporting the goals of Saudi Vision 2030, including stimulating investment and improving the efficiency and sustainability of public finances.
According to information obtained by Asharq Al-Awsat, the ministry stressed that bypassing contract award and contracting procedures—such as beginning work before an award decision is issued, relying on verbal work orders, or carrying out work beyond a contract’s scope without completing the required legal procedures—could lead to unjustified financial claims, as well as disputes and grievances that delay payments and violate the Government Tenders and Procurement Law and its implementing regulations.
Sources said the ministry issued the warning after identifying practices that could breach the law and its executive regulations, resulting in unjustified financial claims stemming from work carried out in violation of procurement rules.
Types of Violations
The ministry cited several examples of prohibited practices, including starting work before a government entity issues a contract award and completes contracting procedures, carrying out work or procurement based on verbal authorization, and performing work outside a contract’s scope without the required legal approvals.
It warned that such practices could trigger disputes with government entities, repeated financial claims and grievances submitted to the Ministry of Finance, and delays in the payment of legitimate dues.
The ministry urged the Contractors Committee and other stakeholders involved in the procurement system to comply with the Government Tenders and Procurement Law and its implementing regulations to reduce violations, avoid financial claims and grievances, and safeguard the rights of all parties.
It also continues to encourage private-sector companies to submit their legitimate financial claims promptly.
The ministry underscored the importance of enabling private-sector firms to submit financial claims through the Etimad electronic platform, provided all legal requirements and supporting documentation have been completed.
Bid Opening and Evaluation
Al-Jadaan said the new law will help government entities achieve their objectives and accelerate project implementation. Among its key provisions are the merger of the bid-opening and bid-evaluation committees into a single body, enhancements to the direct-purchasing mechanism and an increase in its financial ceiling, expansion of limited tenders to include freelance professionals, and broader authority for heads of government entities to simplify procedures and speed decision-making.
He added that supporting private-sector growth is one of the law’s principal objectives. Under the new rules, government entities must process payments owed to private-sector contractors within the prescribed deadlines before entering into new contractual commitments, a measure intended to improve payment discipline and strengthen confidence in government contracting.
The minister said the law also advances broader economic and development objectives by strengthening regulatory frameworks for research, development and innovation, while promoting industrial localization and knowledge transfer.
