In August 2026, Saudi Arabia entered a new phase in the implementation of its ambitious "Vision 2030" program by approving major amendments to its government procurement legislation. These changes are designed to transform the kingdom's bureaucratic apparatus into a more flexible and efficient tool for executing massive infrastructure projects, including preparations for the 2034 World Cup and Expo 2030. The reform aims to eliminate bottlenecks hindering development and create a favorable environment for private investors and innovation.
Radical Acceleration and Expanded Powers
A key aspect of the new law is the significant expansion of financial powers for heads of government agencies. The financial threshold allowing officials to make decisions on procurement procedures related to national security has been raised from 10 million to 50 million Saudi riyals (from ~$2.67 million to ~$13.35 million USD). This change enables faster responses to critical tasks without waiting for lengthy high-level approvals. Furthermore, the time limit for the Ministry of Finance to review contracts has been reduced from 15 working days to 4, radically changing the logistics of approving budget expenditures.
Consolidation of Bodies and Contract Flexibility
The legislative reform merges the Tender Committee and the Bid Review Committee into a single body. This move is expected to eliminate functional duplication and significantly speed up the contractor selection process. An important innovation is the ability to delegate authority for signing contracts, as well as transferring signed contracts between institutions when necessary. The maximum allowable increase in contract value after signing has been raised from 10% to 20%, providing projects with the necessary flexibility when scales or requirements change during implementation.
Stimulating Innovation and Localization
The new law integrates government procurement into the strategy for promoting innovation and localization (Vision 2030). Government buyers are now required to consider research, development, and innovation (R&D) criteria when selecting contractors. This should increase the share of domestic production and transfer technological knowledge to local companies. The threshold for direct procurement, necessary for engaging niche experts and law firms, has increased from 100,000 to 1 million Saudi riyals, simplifying access to specialized services.
Protecting the Private Sector and Payment Discipline
Strict requirements to enhance fairness have been introduced for private enterprises. Government bodies are obligated to process payments to private companies on time; failure to pay old debts blocks the ability to initiate new contractual obligations. Requirements for performance guarantees have also been standardized, creating equal competitive conditions and increasing market transparency. These measures are designed to protect businesses from delays and administrative pressure.
