Project AssureSaudi Arabia's new Government Tenders and Procurement Law was approved by Royal Decree No. M/76 dated 27/2/1448H (10 August 2026) and published in the Umm Al-Qura Official Gazette on 4 September 2026 (22/3/1448H), replacing the 2019 law issued by Royal Decree No. M/128. On government construction contracts, five provisions matter most: tiered limits on change orders, a delay-penalty cap on works cut from 20% to 15%, pre-tender review by a unified procurement body, shorter standstill and Ministry review periods, and site handover within 60 working days of signing. The five grounds for extension of time do not change.
As at 13 October 2026 we had found no final implementing regulation in the gazette or on the Ministry of Finance site. A comparison table with the 2019 law closes this note.
When does the new law apply, and to which contracts?
Under Article 101 the law takes effect 120 days after its publication in the Official Gazette, which by simple count is Saturday 2 January 2027, although the Ministry of Finance has not yet confirmed the start date. In 2019 the Ministry dated entry into force 122 days after publication, so plan on early January 2027, not a fixed day. Until then the 2019 law governs.
Works and purchases tendered while the 2019 law was in force remain governed by the 2019 law, although the Minister of Finance may apply selected provisions of the new law to them without disturbing steps already taken. The trigger is the tender date, not the contract date. A package tendered in December 2026 and signed in February 2027 is, as a rule, a 2019-law contract.
Royal Decree M/76 keeps the 2019 law for extension requests and delay cases on matters that predate the 2019 law's entry into force. That clause concerns pre-2019 cases only. It does not apply the new law to extension requests on existing contracts. Take counsel's view before deciding how either law applies to a live contract.
Variations now have two limits, not one
The 2019 law capped change orders at a 10% increase in contract value. Under Article 67 an owner may add new items worth up to 10% of the contract value with the contractor's consent and increase existing items by up to 20%, with consent needed above 10%, but the total increase may not exceed 20% of the contract value. Existing items may be reduced by up to 20% without consent.
Reports that the limit has simply doubled overstate the owner's position. New items always need consent, and so does the part of an increase in existing items above 10%.
For project controls and earned value, every change order should be logged against the two Article 67 limits, 10% for new items and 20% in total, so that budgets, baselines and estimates at completion show how much variation headroom remains. That means two running totals in the change register, reported monthly. Packages tendered under the 2019 law keep, as a rule, its single 10% limit on increases, so a portfolio may run both rules side by side. Our project controls and EVM work builds that register in.
Delay penalties fall, and the extension grounds stay the same
Article 70 caps delay penalties at 6% of contract value for supply contracts and 15% for all other contracts, including works, down from 20% under the 2019 law, and a higher cap needs the Minister's prior approval and disclosure to bidders before they bid.
Article 72 keeps the five grounds on which the contract period is extended and the penalty waived: additional work, insufficient annual funding, delay caused by the entity or by emergency circumstances, delay for reasons beyond the contractor's control, and an entity suspension order for reasons not attributable to the contractor. A lower cap reduces exposure, not the burden of proving cause. Contemporaneous records linking delay to owner actions, funding shortfalls, suspensions or events beyond the contractor's control remain decisive. Our forensic planning and delay analysis team builds that record while the delay is live.
The cure period before discretionary termination for delay or breach, fixed at 15 days under the 2019 law, is now set by the regulation and runs from written notice (Article 74). Log the date each notice is served.
Price risk stays where it was
Article 66 keeps the three price-adjustment triggers of the 2019 law: a change in the prices of main products, materials or services named in the regulation, a change in customs duties, fees or taxes, and unforeseeable physical difficulties during performance. Requests go to the Ministry of Finance committee, whose decisions bind the government entity.
For risk, the maximum delay penalty on works contracts falls to 15%, but price adjustment is still limited to the three Article 66 triggers, so material price, tax and unforeseeable physical risks should still be priced and registered explicitly. No final regulation naming the qualifying products and materials had been found by 13 October 2026, so no risk register entry on a new-law contract should assume cover yet.
What should the baseline programme allow for?
The Expenditure Efficiency and Government Projects Authority (EXPRO) is the unified procurement body for all government procurement except military and security procurement. Before tendering, an entity must submit its feasibility study, estimated cost and tender documents to it for review. Silence within the period set by the regulation counts as approval. Low-value, emergency and urgent cases need only notification.
- Standstill. 3 to 10 working days after the award is notified, down from 5 to 10.
- Ministry review. Contracts specified by the regulation go to the Ministry of Finance before signing. It has 4 working days, down from 15, and silence counts as approval.
- Site handover. Within 60 working days of signing, unless the tender documents say otherwise.
For planning, owners should allow in their baseline programmes for pre-tender review by the unified procurement body, a standstill of 3 to 10 working days and site handover within 60 working days of signing, while contractors should note that bids now stay valid for 90 working days. These are working days, so the procurement fragnet needs a working-day calendar. Hold the pre-tender review as an open duration until the regulation fixes it.
Where do grievances and disputes go?
A bidder may challenge a pre-award decision within 5 working days, and the award within the standstill period. The entity must decide within 15 working days, and silence counts as rejection. The bidder then has 3 working days to escalate to the Ministry of Finance committee, which decides within 15 working days, extendable once.
For disputes, bid grievances and price-adjustment requests go to a Ministry of Finance committee whose decisions bind the government entity, compensation claims for owner breach go to the competent court, and arbitration needs the Minister's approval. The regulation will set other methods for resolving disputes during performance. Until it does, dispute avoidance rests on timely notices, clean records and early, documented positions.
What is still waiting on the regulations?
The implementing regulation and the Article 98 regulations, including a new preference regulation, are due within 120 days of publication. A draft implementing regulation went out for consultation on the Istitlaa platform, but draft figures are not law. Treat these as open:
- The cure period before discretionary termination.
- The pre-tender review period and its low-value threshold.
- Which contracts go to the Ministry before signing.
- The products, materials and services that qualify for price adjustment.
- Local content preference margins or a mandatory local content share.
Where to start
Map every live and pipeline package to the law that governs it, by tender date. Add the two Article 67 running totals to the change register for new-law packages. Rebuild the procurement logic in baseline programmes for anything tendering after early January 2027. See how we support owners and contractors in Saudi Arabia.
| Provision | 2019 law (Royal Decree M/128) | New law (Royal Decree M/76) |
|---|---|---|
| Change orders | Increases of no more than 10% of contract value. Decreases of no more than 20% (Article 69) | New items up to 10% with the contractor's consent. Existing items up to 20%, with consent for the part above 10%. Total increase capped at 20%. Reductions up to 20% without consent (Article 67) |
| Delay penalty cap | 6% for supply contracts. 20% for other contracts, including works (Article 72) | 6% for supply contracts. 15% for other contracts, including works. Higher only with the Minister's prior approval, disclosed before bidding (Article 70) |
| Continuous-service penalty cap | 20% (Article 73) | Up to 15%, where the contractor fails for reasons not beyond its control. Higher only with the Minister's prior approval, disclosed before bidding (Article 71) |
| Extension of time and penalty waiver | Five grounds (Article 74) | The same five grounds (Article 72) |
| Price adjustment | Three triggers, with requests to the Ministry of Finance committee (Articles 68 and 86) | The same three triggers and the same committee forum (Articles 66 and 84) |
| Cure period before termination | 15 days from written notification (Article 76(2)(a)) | Set by the regulation, running from written notice (Article 74(2)(a)) |
| Award standstill | 5 to 10 working days (Article 53) | 3 to 10 working days (Article 50) |
| Ministry review before signing | 15 working days (Article 60) | 4 working days, and silence counts as approval (Article 57(1)) |
| Performance guarantee | 5% within 15 working days. Exempt up to SAR 100,000 and for companies at least 51% state-owned (Article 61) | 5% within 15 working days, extendable once. Exempt up to SAR 300,000, for additional works and for emergency and urgent cases (Article 59) |
| Start on site | Public works contractor allowed to commence within 60 days of award notification, unless the tender documents provide otherwise (Article 59(2)) | Site handed over within 60 working days of contract signing, unless the tender documents say otherwise (Article 56(3)) |
| Bid validity | 90 days, calendar days per the Ministry's English translation (Article 39) | 90 working days from bid opening (Article 39) |
| Advance payment | Advance only, against a bank guarantee of equal value (Article 66) | Advance or full contract value up front, against a bank guarantee of equal value (Article 64) |
| Grievance to the Ministry committee | Guarantee of half the bid guarantee. Committee of at least five members (Article 86) | 0.5% of bid value, or SAR 15,000 when challenging a prequalification decision, refunded if upheld. At least three members (Article 84) |
| Assignment of the contract | Written approval of the entity and the Ministry (Article 70) | Entity's written approval, with notice to the Ministry and the General Court of Audit (Article 68) |
| Direct purchase threshold | SAR 100,000 (Article 32(3)) | SAR 1 million, with priority to local SMEs and documented reasons (Article 32(3)) |
| Delegation of procurement decisions | Up to SAR 10 million (Article 54) | Up to SAR 50 million (Article 51) |
