Saudi Arabia’s Government Tenders and Procurement Law raises key financial thresholds, shortens approval times and changes how state bodies award and amend contracts.
According to MEED, which first reported the changes, the law was published in the official gazette, Umm Al-Qura, on 4 September 2026. It replaces the procurement law introduced under Royal Decree M/128 in 2019 and will take effect 120 days after publication.
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The delegation ceiling for government contracts rises fivefold, from SR10m ($2.7m) to SR50m ($13.3m), allowing heads of government entities to pass authority to other officials.
The direct-purchase threshold increases from SR100,000 ($26,667) to SR1m ($266,667). Contracts awarded through this route must give priority to local small and medium-sized enterprises (SMEs).
The finance ministry’s pre-signing review period falls from up to 15 working days to four. If the ministry does not respond within that period, approval is deemed granted. Bodies without an allocation in the state budget are exempt from the review requirement.
Government entities will also have more flexibility after award. The permitted increase in contract value through change orders rises from 10% to 20%, covering new line items and increases to existing ones.
Bid opening and evaluation, previously handled by separate committees, will be consolidated into a single committee responsible for opening, examining and recommending awards.
The law retains a 5% performance bond, a primary bid guarantee of 1% to 2% and a 90-working-day bid validity period.
Saudi Arabia’s Government Tenders and Procurement Law also introduces a mechanism for transferring contracts between state entities and requires overdue contractor payments to be settled before new award decisions are issued.
Implementing regulations are due from the finance ministry within 120 days and will take effect alongside the law.
