Saudi Arabia Extends Contracts and Waives Off Penalties Due to COVID-19 Related Delays

April 17, 2020 – Saudi Arabia allows government entities to extend contracts and waive delay penalties due to the COVID-19 pandemic. According to Article 74 of Government Tenders and Procurement Law, government entities can extend contracts in exceptional cases, including delays due to government emergency or external factors outside of the contractor’s control. The Ministry of Finance announced that COVID-19-related delays are pertinent to those clauses and that the decision includes delays in the execution of works and procurements, project delivery, and completion of projects related to continued-execution contracts. Government entities are directed to pay contractors and suppliers within 15 days of the decision’s issuance. Suppliers impacted by COVID-19 delays are also exempt from fines for delays on government contracts for a three-month renewable period.