Government Tenders and Procurement Law

1. The awarded bidder shall submit a final guarantee of 5% of the contract value within a period of 15 working days from the date of being notified of the awarding decision. The government agency may extend such period for a similar period. If the final guarantee is not submitted during the specified period, the initial guarantee shall not be returned to the bidder, and the government agency shall proceed to negotiate with the next best bidder, in accordance with the provisions of the Law. The guarantee percentage may be increased upon the Minister’s approval. 2. A local small- or medium-sized bidder shall pay to the government agency a fine equal to the initial guarantee if the bidder withdraws the proposal during the bidding validity period, or if the bidder fails to submit the final guarantee upon being awarded the tender. If the bidder fails to pay the specified fine within 60 days from the date of withdrawing the proposal or from the deadline for submitting the final guarantee, the bidder shall be banned from Government Tenders and Procurement Law contracting with government agencies for one year. 3. A final guarantee shall not be required in the following cases: a) If the value of the works and procurements does not exceed 100,000 riyals. b) Intra-government contracts. c) Contracting with a non-governmental organization or society, or any other non-profit entity. d) Contracting with a company the State owns at least 51% of its capital. e) If the contractor delivers all the items covered by the tender awarded thereto and the government agency makes a final acceptance thereof within the period specified for submission of the final guarantee; or if the contractor delivers part of the items and that part is accepted, and its price is sufficient to cover the final guarantee; in which case, an amount equal to the guarantee shall be retained until the contractor fulfills the contractual obligations. f) If the contractor is assigned additional works. 4. A final guarantee shall be retained until the contractor fulfills the contractual obligations and makes a final delivery of the project, in accordance with the contract terms and conditions.