In April 2025, Professor Christopher Yukins of GW Law School joined Maya Bou Chebl of the International Anti-Corruption Academy (IACA) for training on anti-corruption strategies in public procurement in the Kingdom of Saudi Arabia, in Riyadh. The training was coordinated by the Kingdom’s national anti-corruption agency, Nazaha.
The training had two main goals: (1) to discuss how Saudi Arabia’s new procurement laws coordinate with best practices internationally in fighting corruption; and (2) to review emerging competitive methods to improve procurement for innovation, especially in light of Saudi Arabia’s Vision 2030 goals for a rapid transformation of the Kingdom’s economy.
Government Tenders and Procurement Law
Saudi Arabia’s Government Tenders and Procurement Law (English translation) was put in place in 2019, and is summarized below. The statute is implemented through the Executive Regulations of the Government Tenders and Procurement Law (2020) (English). Also relevant are the Kingdom’s Regulations on Conflict of Interests in Implementation of the Government Tenders and Procurement Law and its Implementing Regulations (English). All of these materials may be found on the Ministry of Finance’s portal. A combined version of the Law and its implementing regulations, in Arabic, is here.
Special thanks to George Washington University Law School doctoral student Muneera Al Khalifa, who is based in Bahrain, for her research assistance.
Purposes of the Law
The Government Tenders and Procurement Law aims to (1) regulate procedures relating to procurement, and to prevent abuse of power and conflicts of interest; (2) achieve optimal value in procurement, and implement procurements at fair and competitive prices; (3) promote integrity and competitiveness, maintain equality and fair treatment of bidders, in fulfillment of the principle of equal opportunity; (4) maintain transparency in all procurements; and (5) foster economic growth and development.
Qualified Bidders
Under Article 4 of the law, all “qualified persons seeking to contract with a government agency shall be accorded equal opportunities and treatment.”
Article 18 of the law says that prospective bidders “shall meet the requirements necessary for carrying out government works and procurements.” Article 17 of the implementing regulations spells out the criteria that are to be used for assessing qualifications, such as financial and administrative capacity. Qualification (pre- or post-qualification) shall be assessed by individual agencies (Article 19 of the law). Qualification criteria must be “objective and measurable,” and must include “the bidders’ technical, financial, and administrative capabilities,” in a manner “that is commensurate with the nature, size, and value” of the project.
Access to Information
Bidders, per Article 5 of the law, are to “be provided with clear and uniform information,” and “given access to such information at a specified time.”
Article 6 of the law emphasizes that a public tender “shall be subject to the principles of publicity, transparency and equal opportunity.”
Setting Requirements / Fair Pricing
Under Article 8 of the law, procurements “shall be restricted to the actual needs of the government agency” and shall be “at fair prices that do not exceed prevailing market prices.”
Per Article 23 of the law, before estimating the cost of a procurement, an agency shall “thoroughly study market prices and take them into consideration when setting a maximum limit” for a contract, but also ensure “measures necessary to maintain the confidentiality” of the government estimate.
Advance Planning
Chapter 5 of the Saudi Arabian law calls for advance planning in procurement. Under Article 12 of the law, a government agency “shall plan in advance its works and procurements,” and to coordinate with the Ministry of Finance “for the allocation of necessary appropriations.” At the start of each fiscal year, an agency “shall publish a plan consistent with its budget which includes key information about its works and procurements for the year,” though “without compromising the confidentiality considerations of national security.” The agency’s publication of its plans “shall not result in any obligation.”
Contracting Methods
The Saudi law contemplates several different competitive methods. All procurements are to be done through public tenders (Article 28 of the law) and announced through the electronic portal (Article 29) (see below). The implementing regulations are especially important to fully understand Saudi Arabia’s competitive methods.
Open Tendering
Under Article 29 of the implementing regulations, when open tendering with weighted scoring is used, higher weights may be assigned to technical elements if the project is technically complex.
Limited Tendering
Limiting the competitive field is permissible (Article 30 of the law) if there is (1) only a limited number of available suppliers (which should be tested by publishing the opportunity, per Article 36 of the regulations); (2) the estimated value does not exceed 500,000 SAR (approximately USD$150,000), in which case at least five bidders must be invited, and priority is to be given to local small- and medium-sized enterprises (SMEs); (3) urgent cases; (4) the contractor is to be a non-governmental or non-profit entity; or (5) consulting services. Under Article 38 of the regulations, limited tendering is to be used for emergencies only if there is true urgency.
Two-Stage Tender
An agency may use two-stage tendering if it is not possible to determine the final technical specifications and contractual obligations fully and accurately due to the complex and specialized nature of the procurement (Article 31 of the law). As Wang Zihong and Xu Yibai explained in the China Business Journal, two-stage tendering under the Saudi law “involves the first stage of soliciting technical advice and determining technical standards, followed by the second stage of preparing tender documents based on the final technical solution.” The two-stage process is described in detail in Article 42 of the implementing regulations.
Direct Purchase
Per Article 32 of the law, an agency may use direct purchasing (1) when purchasing weapons or military equipment (through the General Authority for Military Industries); (2) if only a sole operator is available; (3) if the value of the procurement is below 100,000 SAR 100,000 (approximately USD$27,000), with a preference to SMEs; (4) if national security demands it (with a report to the general auditor); (5) if only a single non-profit or non-governmental entity provides the item; and (6) emergencies. Articles 44-48 of the implementing regulations describe direct purchasing in more detail, including what publication is required.
Framework Agreements
An agency (Article 33 of the law) may establish a framework agreement with a contractor, where it is not possible to determine the quantity to be ordered, or the date of ordering. The requirements for framework agreements, including “closed” (no new entrants) or “open” (new entrants allowed) arrangements, are discussed in more detail in Articles 50 and 51 of the implementing regulations. (In the United States, framework agreements are sometimes known as “catalogue contracts” or “indefinite-delivery/indefinite quantity” contracts.)
Electronic Reverse Auctions
Under Article 34 of the law, a government agency may use an electronic reverse auction if (1) detailed technical specifications are prepared; (2) a competitive market is available; (3) proposals are received through the government’s electronic portal (see below) and automatically ordered; (4) the auction’s start and stop times are specified; and (5) bidders are provided with the necessary information and guidance. The implementing regulations, at Articles 54-56, describe reverse auctions in more detail: the focus is on readily available items, with early review of contractor qualifications, in price-only auctions in which prices will be disclosed to the bidders as the auction unfolds.
Competition for Best Ideas
Per Article 36 of the law, an “agency may, by way of competition, conclude a contract with the bidder presenting the best idea, design, or any other intellectual property rights.” Article 59 of the implementing regulations allows for negotiations in these types of competitions.
Review of Proposals
Committees are to be appointed by the agency, per Article 45 of the law, to review proposals. The committee may look to reports from technical experts. The Unified Procurement Agency may participate in the proposal review committees. The proposal review committee shall issue its written recommendations (and possible dissents). No person may both serve on the proposal review committee and decide on the contract award, nor serve on the proposal opening committee and the proposal review committee simultaneously.
Per Article 36 of the law, the proposal review committee shall review proposals “pursuant to the criteria in the tender documents.” This requirement is reinforced in Article 24 of the implementing regulations. This is an important anti-corruption protection, for it means that award may not be based on other factors, such as corrupt pressures from those outside the process.
If technical and financial proposals are submitted separately, only the technical proposal will be reviewed first. Financial proposals submitted with compliant technical proposals will then be considered, and the proposal review committee shall “submit its recommendations as to the best proposal, in accordance with the assessment criteria set out in the tender documents.”
The proposal review committee may negotiate with the bidder which submitted the best proposal, and then with the next best bidders, if (1) the price of the best proposal is significantly higher than market prices, or (2) the price of the best proposal exceeds available appropriations (if those negotiations fail, the agency may turn to the next best bidder).
Per Article 48 of the law, no proposal may be disqualified for underpricing unless the proposed price is “less than the estimated cost or market price by 25% or more,” provided that the proposal review committee “discusses the issue with the bidder” and “sends the bidder a written request to provide more details” to explain the low price. “If the Committee is not convinced of the bidder’s ability to execute the contract, it may recommend disqualification of the proposal.”
If only one satisfactory proposal is submitted, award may be made to that bidder only “if the proposed price is similar to market prices” and with the approval of the head of the agency (Article 50 of the law).
A tender may be canceled if the solicitation documents contained substantial errors, an unlawful action is taken, if “there are clear indications of fraud, corruption, or collusion” among the bidders, if all proposals violate the tender requirements, or in the public interest (Article 51 of the law).
Standstill (Suspension) Period
Upon announcement of the award, the agency “shall observe a suspension period of not less than five working days and not more than 10 working days,” during which “the award may not be approved and the contract may not be signed,” so as “to allow bidders to appeal the awarding decision.”
Unified Procurement Agency
Under Article 14 of the Government Tenders and Procurement Law, Saudi Arabia’s Unified Procurement Agency is to (1) identify requirements which span more than one agency, and launch framework agreements (in U.S. terms, “indefinite-delivery/indefinite-quantity (IDIQ)” contracts) to address those requirements; (2) give government agencies access to those framework agreements (which the agencies are required to use, absent special permission (see Article 15 of the law)); (3) absent emergency, urgency or below-threshold procurements, review agencies’ feasibility studies and cost estimates within a period set by regulation (see Article 15 of the law); (4) develop forms for tender documents, pre-qualification documents, contracts, contractor performance assessments and other elements of procurement; (5) develop training programs in procurement.
Etimad Electronic Platform
The Etimad Platform is a comprehensive electronic platform for the Saudi Ministry of Finance, which provides services to various government and private sector entities to enable the digital transformation of the Ministry’s services. The Ministry of Finance explains that the platform includes many basic services such as contract management, budgeting and payments, as well as managing tenders, procurement and financial rights. Per Article 17 of the Saudi Arabian procurement law, the platform (or “portal” is to “ensure the highest degree of privacy, confidentiality, safety, and transparency of information,” and is to “ensure integrity of procedures.”
Anti-Corruption
A contract must be terminated (Article 76 of the law) if “it is established that the contractor has, personally or through others, directly or indirectly, bribed an employee of the agencies . . . , obtained the contractor through bribery, fraud, deceit, forgery, or manipulation; or engaged in any such acts in the course of executing the contract.”
Per Article 94 of the law, civil servants are subject to civil or criminal penalties for violations of law.
Bid Challenges and Disputes
Per Article 86 of the law, the Minister of Finance is to form committee(s) of five specialists. A committee is to hear (a) appeals by bidders against awards “or any decision or action taken by the government agency prior to the awarding decision”; (b) contractors’ appeals against performance assessments; and (c) price adjustment requests. Committee decisions are binding on the agency. An appealing bidder or contractor shall submit a guarantee (one-half of the initial financial guarantee of 1-2%), which shall be returned if the appealing party prevails.
An appeal of an award may be made by a disappointed bidder to the procuring agency within five working days of the decision, or the bidder may file an appeal within the suspension period (see above). The appeal must be decided within 15 working days. If denied, per Article 87 of the law an appeal may be made (within 3 days) to the committee referenced above (from Article 86). That committee shall decide the appeal within 15 days. If an appeal is granted, the problem identified shall be rectified if possible; if not, the tender will be canceled.
Contractors that allege an agency has failed to meet its contractual obligations may file a claim for compensation with the Administrative Court. An agency may (with the Minister of Finance’s approval) agree to arbitration.
Excluding Contractors for a Term of Years
Under Article 88 of the law, the Minister of Finance is to appoint committee(s) of five persons, which shall have the authority to exclude bidders or contractors (per a published notice) for a period up to five years. The committee may also lower a violator’s classification, or (instead of banning the violator) impose a fine not exceeding 10% of a proposal (bid). Committee decisions may be appealed to the Administrative Court.
Article 10 of the implementing regulations explains that the cause of exclusion should be posted on the electronic platform (described above).
Additional Research Materials
- U.S. International Trade Administration, Selling to the Public Sector: Saudi Arabia
- Stephen Matthews, Baker Botts, KSA’s Public Procurement Reform (Jan. 2020)
- Wang Jihong & Xu Yibai, Guide for Saudi tendering and procurement projects, China Business Law Journal (30 June 2023)
Materials for Training
Slides for Training (English) – شرائح للتدريب
Mock solicitation for reverse auction – التماس وهمية للمزاد العكسي (English) (Arabic – machine translation – العربية – ترجمة آلية)
Compliance exercise – ممارسة الامتثال (English) (Arabic – machine translation – العربية – ترجمة آلية) – group exercise details (Arabic) (not addressed in April 2025 training)