The Kingdom of Saudi Arabia..a new law for government competition and procurement
Updated: Sep 27
The Saudi Ministry of Finance said that the kingdom's government has approved a law to improve the way it buys contracts and services by providing money, as it makes the process more fair and honest and supports local bidders.
Saudi Arabia has embarked on a series of economic reforms, within the framework of the Kingdom's Vision 2030, with the aim of ridding the country of dependence on oil exports.
The ministry stated that the new government competition and procurement system "comes as a major and advanced enabler to achieve the goals of the Ministry of Finance's vision emanating from the Kingdom's Vision 2030", as it will contribute to improving the government's financial position by improving spending efficiency and enhancing the effectiveness of financial planning.
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Finance Minister Mohammed Al-Jadaan said in a statement that the new system seeks to "allocate and manage financial resources effectively, as well as provide more transparency in all competition and procurement procedures."
The law included amendments, including “establishing a clear mechanism for adjusting contract prices and compensation in the event of an increase in the prices of raw materials, customs duties or taxes, or if the contractor faces material difficulties that could not have been expected during the implementation of the contract.”
It also aims to ensure a broader participation of local small and medium enterprises, as "it will give them priority in competitions and will exempt them from providing the initial guarantee," according to the Minister of Finance.
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Mahmoud Adel Al-Thumali Law Firm is a Saudi law firm advising individuals, companies and foreign investors on litigation, arbitration, corporate and investment matters in Saudi Arabia. Last updated: September 2026.
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