This article adopts a comparative approach to examining the arbitration systems governing government contracts in Iran and Iraq. The primary objective of this research is to analyze the legal foundations of arbitration in government contracts, identify implementation challenges, and propose solutions to enhance the efficiency and legitimacy of this dispute resolution mechanism. The research employs a descriptive-analytical methodology based on an analysis of statutory provisions, legal scholarship, and documents issued by arbitral institutions.The findings indicate that, in Iran, arbitration in government contracts is primarily governed by general legislation, with no specific law dedicated to this area, which may lead to institutional overlap and difficulties in the enforcement of arbitral awards. In Iraq, despite a growing inclination toward the use of arbitration in government contracts, certain limitations, including the absence of specialized arbitration institutions and weaknesses in judicial oversight, hinder its full effectiveness. Furthermore, a lack of transparency in arbitration proceedings and insufficient specialized training for arbitrators in both countries have undermined the confidence of contracting parties. The article concludes that the enactment of comprehensive legislation specifically governing arbitration in government contracts, the establishment of specialized arbitration centers, and the strengthening of oversight mechanisms could significantly enhance the role of arbitration in resolving disputes arising from government contracts.