1. What is the Government Tenders & Procurement Law?
Issued by Royal Decree M/128 (1440H), this law governs all procurement and contracting by Saudi government entities, aiming to ensure transparency, equal opportunity, and protection of public funds.
Entities subject to the law: All ministries, government agencies, public institutions and authorities, and any body funded from the general budget.
2. Types of government tenders
General tender
Open to all, the default under the law. Used above the limited-procurement thresholds.
Limited tender
Invitations to selected bidders for specialized or scarce-supplier scopes.
General procurement
For procurement below the regulatory thresholds.
Limited procurement
Procurement from a small supplier set when speed or specialization is required.
Direct purchase
Exception, emergencies, sole-source, or public-interest cases with a justified decision.
3. Tender stages
Click any stage to expand its details.
Announcement
Government entity publishes the tender on Etimad with deadlines and requirements.
Responsible
Government entity
Typical duration
≥ 30 days
Required documents
Tender documents, conditions booklet
Common mistakes
Skipping a full read of the conditions booklet before purchase.
N&M Tip
Subscribe to Etimad alerts by activity to catch tenders on day one.
Announcement
Government entity publishes the tender on Etimad with deadlines and requirements.
Responsible
Government entity
Typical duration
≥ 30 days
Required documents
Tender documents, conditions booklet
Common mistakes
Skipping a full read of the conditions booklet before purchase.
N&M Tip
Subscribe to Etimad alerts by activity to catch tenders on day one.
4. Qualification requirements
- Valid commercial registration
- Contractors Authority classification in the right field & grade
- Financial solvency (audited statements)
- Technical experience in similar projects
- Capacity to absorb the contract size
- Valid Zakat & Tax certificate
- GOSI (Social Insurance) certificate
5. Required guarantees
Bid bond
1% - 2% of bid value. Submitted with the bid; forfeited on withdrawal or refusal to sign.
Performance guarantee
5% - 10% of contract value. Submitted within 10 days of award; valid through final handover.
Advance payment guarantee
Equal to the advance (typically 5% - 20%). Reduced as the advance is recovered from progress payments.
Guarantee call: Called on breach of contractual obligations, refusal to sign, or performance default, per the law and contract.
6. Bid pricing
Pricing in government projects typically follows three patterns:
- Bill of Quantities: Per-item pricing on estimated quantities, the most common in construction.
- Lump sum: A fixed total for the full scope; the bidder bears quantity risk.
- Alternative bids: Submitted alongside the base bid where allowed, can win the award if they add technical or schedule value.
Tip: don't chase the lowest price, a balanced bid with clear technical justification reduces the risk of an 'unbalanced bid' disqualification.
7. Award & contract signing
Awards go to the lowest-priced technically compliant bid, except where value-based criteria apply. After notice, the winner must submit the performance guarantee and sign within the statutory window.
Mandatory contract clauses: Scope, time, value, payments, guarantees, penalties, suspension, termination, and dispute resolution.
8. Post-award contract management
- Release of the advance payment against an equivalent guarantee.
- Monthly progress payments based on actual progress.
- Variation orders within the statutory limits.
- Liquidated damages per the contract.
- Termination, by mutual agreement or for material breach.
- Substantial then final handover after the maintenance period.
9. Etimad Platform
Etimad is the unified portal for Saudi government business, registration, browsing tenders, buying documents, electronic bid submission, award tracking, and invoice & payment management.
Contractors must complete their profile and link key certificates (CR, classification, Zakat, GOSI) before bidding.
10. Frequently Asked Questions
Government Tender Submission Checklist
A comprehensive PDF of everything to verify before submitting on Etimad, qualification, guarantees, documents, and common mistakes.