I. Introduction
The Ministry of Finance (“MOF”) has promulgated a new wave of amendments to the Executive Regulations of the Government Tenders and Procurement Law pursuant to Ministerial Resolution No. (1097) dated 09/12/1447 H (corresponding to 26/05/2026 G) (“2026 Amendments”). These follow previous amendments pursuant to Ministerial Resolution No. 1090 dated 21/09/1445 H (31 March 2024 G) (“2024 Amendments”). Read together, the two rounds of reform reveal MOF’s campaign to rebalance the bidding process and contractual relationship between Saudi governmental authorities and their overseas and local contractors. Whereas the previous regime tilted decisively in favor of the government, the adopted changes introduce reciprocal obligations, tighter procedural safeguards, and clear consequences caused by either side’s delay in executing the contract.
This article delves into the principal changes under the 2026 Amendments and identifies MOF’s broader pattern of reform.
II. Nuanced Yet Impactful Amendments
A. Grace Periods for Contract Execution; Averting Deviations from Approved Payment Plans
Article 88 previously granted the governmental authority unilateral control over the contract-signing timeline. The 2026 Amendments replace this with a structured, reciprocal framework:
- Government’s obligation – The governmental authority now has 30 business days from receipt of the relevant approvals (e.g., MOF approval for contracts exceeding one year or SAR 5 million) to set the signing date. The awarded bidder’s failure to execute without justifiable cause entitles the governmental authority to issue a warning. If 10 business days elapse without execution, the authority may confiscate the final guarantee and claim damages, and the tender proceeds to the next-ranked bidder or is cancelled.
- Bidder’s reciprocal right – If the governmental authority does not execute the contract within 35 business days from the date the final guarantee is furnished (or from the date of award, where no final guarantee is required), the awarded bidder may issue its own warning. If a further 10 business days pass without execution, the governmental authority must return the awarded bidder’s guarantees, and the tender moves to the next bidder or is cancelled. The period during which the bidder reviews the contract is excluded from this timeline.
Aside from the contract signing periods, MOF has introduced a new requirement with regards to payment schedules, whereby bidder must submit a proposed payment schedule with its bid. The governmental authority may review and amend the schedule during the bid-examination phase, and the parties must reach agreement at that stage. If the authority subsequently imposes a payment schedule that departs from the agreed terms, the bidder may reject it. Should the authority fail to revise the schedule within 10 business days, the bidder may apply to the bid-examination committee to withdraw, with its guarantee returned and the tender proceeding to the next bidder or cancelled in its entirety.
The net effect is a regime of mutual accountability: both parties now face defined deadlines and proportionate consequences for delay, and the government must now honor the agreed payment terms proposed by the awarded bidder.
B. Required Documentation to Receive Final Payment
Under the prior regime, the contractor could not receive the final invoice amount without proof of governmental authority’s issuance of a certificate of completion, and furnishing copies of the Zakat, Tax and Customs Authority (“ZATCA”) and the General Organization of Social Insurance (“GOSI”), evidencing settlement of outstanding tax or zakat dues, and compliance with social security enrollment schemes, respectively, in addition to providing any further documents required under the contract. The final invoice was also subject to a minimum-value threshold (5% of the contract price construction projects; 10% for other government contracts).
The 2026 Amendments streamline this requirement. The minimum-value threshold has been removed, and the mandatory documentation is now limited to:
- A certificate of completion issued by the governmental authority.
- Any additional certificates or licences required by the specific contract type.
The blanket statutory requirement for ZATCA and GOSI certificates has been deleted. That said, where the applicable MOF contract template for the relevant service or supply mandates such documentation, the contractor must still provide copies to that effect.
C. Variation Orders – Increased or Reduced Works
While Article 114 retains its existing framework for governmental authority’s request for additional or reduced works, it introduces additional criteria for the authority to follow. The key points, as amended, are:
- Ahead of determining the proposed increase in the contract price, the governmental authority must first assess whether an extension of the contract duration is necessary, and any such extension must be proportional to the volume of additional works.
- Additional works may be commissioned by the governmental authority prior to receiving the work due under the contract or ahead of its expiry of its term. Prior to the changes, once the work was completed, even if the term of the contract was still valid.
D. Termination Based on Public Interest
This is the most consequential amendment. Previously, Article 132 left the term public interest undefined, and only imposed one substantive limitation on public-interest terminations, where the governmental authority could not terminate the contract merely to perform the works itself or to appoint a different contractor, and required the authority to issue a 30
calendar-day notice period invoking termination rooted in public interest concerns:
The 2026 Amendments replace this open-ended discretion with a closed catalogue of permissible grounds and a layered approval mechanism:
- The amended article introduce a clear definition and requires the governmental authority to prove a public interest concern exists and can be contributed either having
- detrimental impact on security, health, public safety, or the environment,
- disruption to the ordinary operations of other government agencies, evidenced by a report co-signed with the affected agencies,
- exceptional circumstances beyond the governmental authority’s control that prevent continued performance, such as force majeure, or
- a demonstrated lack of need for the contracted works or services.
- Where a governmental authority seeks to terminate on public-interest grounds falling outside this catalogue, it must refer the matter to MOF with supporting evidence. MOF has 10 business days to respond; silence is deemed acceptance, though MOF may extend the review period at its discretion. MOF’s Tender Evaluation Committee then issues a recommendation to the governmental authority’s authorized person to follow through.
While the notice period has been reduced from 30 calendar days to 20 business days, this is more than offset by the significantly higher burden of justification and the new layer of MOF oversight.
III. The Broader Pattern
The 2026 Amendments do not stand alone. Read alongside the 2024 Amendments, a coherent reform agenda emerges. The 2024 Amendments created targeted accommodations for foreign companies executing overseas contracts on behalf of the Saudi government — permitting alternative contract templates, waiving initial and final guarantee requirements, and allowing alternative arbitration forums (subject to MOF approval). These carve-outs reflected MOF’s recognition that applying the full domestic regulatory framework extraterritorially was neither practical nor equitable.
The 2026 Amendments extend the same principle of proportionality into the domestic regime. Across every amended article, the direction is consistent: reciprocal obligations for both parties on contract execution timelines, reduced administrative burden for final-payment documentation, higher thresholds on the government for variation orders, and most significantly, a defined and in some instances externally reviewable standard for public-interest termination.
The overarching theme is the progressive embedding of good faith and fair dealing as operative principles in government procurement, displacing a framework that historically afforded the governmental authority a more favorable position.
IV. Concluding Remarks
The 2026 Amendments represent a material shift toward balance and transparency in Saudi government procurement. They impose meaningful constraints on governmental discretion, strengthen contractors’ procedural rights, and align the regulatory framework more closely with the principle that public contracts are bilateral undertakings, not instruments of sovereign prerogative.
For contractors, whether locally licensed or foreign, the practical implications are significant: clearer timelines, enforceable rights of withdrawal where government defaults, reduced documentation burdens, and a substantially narrowed basis on which a contract may be terminated for public interest. The cumulative effect of the 2024 and 2026 reform cycles should encourage greater confidence and broader participation in Saudi government tenders.