Legal Retainer for Contractors in Saudi Arabia: From Award to Final Handover
Updated: Oct 6
A company that has won a tender needs a lawyer for the whole contract period, not only when a dispute starts, because its rights are won or lost in day-to-day correspondence. An annual retainer places legal counsel inside project management for a fixed fee agreed in advance.
Why hiring a lawyer only when a problem appears is too late
By the time a withdrawal notice arrives, the file is already written: notices that were never sent, extra work done without a written order, and entity delays that nobody recorded. A lawyer who joins then defends a weak file. Counsel who follows the project builds a strong one from day one.
What the annual retainer covers
After award: contract review, performance bond, subcontracts and supply agreements.
During performance: notices, change orders, extension of time and penalty relief requests.
Payments: follow-up and formal claims for overdue certified payments.
Disagreement: replies to default notices, negotiation, grievances, court or arbitration representation.
Close-out: provisional and final handover, bond release, final account.
Next tender: review of tender documents and bids, and challenges to award decisions.
Which law governs your contract: the current one or the new one?
The new Government Tenders and Procurement Law was issued by Royal Decree M/76 and published in the Official Gazette (Umm Al-Qura) on 4 September 2026. It takes effect 120 days after publication, in early January 2027. Until then the current law, issued by Royal Decree M/128, continues to apply.
Tenders launched before the new law takes effect remain governed by the current law, even if the contract is still being performed after January 2027, although the Minister of Finance may apply some provisions of the new law to them. A company running several projects may hold contracts governed by two different laws at the same time, and retained counsel tracks this contract by contract.
Delay penalty on non-supply contracts: up to 20% under the current law, up to 15% under the new law. On supply contracts, up to 6% under both.
Increase of the contractor's obligations: up to 10% under the current law, up to 20% under the new law. Reduction up to 20% under both.
Who it suits
Construction, operation and maintenance, supply and IT companies contracting with government entities.
Foreign companies and regional headquarters entering their first government contract in the Kingdom.
Mid-sized companies without an in-house legal team running several projects at once.
FAQ
How is a retainer different from instructing a lawyer on a case?
A case instruction deals with a dispute that has happened. A retainer prevents the dispute or prepares its file in advance, and includes an agreed volume of reviews, advice and correspondence.
When does the new Saudi Government Tenders and Procurement Law take effect?
120 days after its publication in Umm Al-Qura on 4 September 2026, which is early January 2027, with its implementing regulations due within the same period. Tenders launched before that remain governed by the current law, and tenders launched after it are governed by the new law.
Is arbitration available in Saudi government contracts?
Arbitration may be agreed with the approval of the Minister of Finance, under both the current law and the new law. This is settled at contracting stage, not after the dispute.
Book an appointment to request an annual retainer proposal, stating the number of live projects and their approximate value.
Comments