المملكة: The Ministry of Finance discusses new amendments to the “Local Content Preference” list
Determine price and value
The Authority obligated the government entity, when proposing and carrying out its work and purchases, to give local small and medium enterprises a price preference, assuming that the prices of local small and medium enterprises’ offers are less than the prices of other establishments’ offers by “10%” mentioned in the bid documents for the competitors, in all contracts – except for contracts. Supply – which does not fall within the scope of the high value contract.
It also stipulated that the mechanisms contained in this article be applied to mixed competitions according to the prevailing terms in terms of value, if the parts of the contract are not separate, and if the parts of the contract are separate, the local content mechanisms shall be applied to each part.
The Authority has determined the mechanisms for preferring local content, including the price preference mechanism for the national product, where the government agency in supply competitions compares the shares of national products for each competitor for the purpose of financial evaluation. The financial evaluation is taken into account by the adjusted offer value according to the equation: “Adjusted offer value = offer price.” “In riyals” -10% × the offer price “in riyals” × the share of national products.”
Periodic reports to contractors
It obliges the contractor to provide the government entity with a periodic report every 3 months – or as specified in the competition documents – to ensure the implementation of local content requirements, provided that it includes a list of products – supplied under the contract, indicating their country of origin in accordance with the instructions issued by the authority – and the government entity shall review within “ 10 working days from receipt of the report to verify the implementation of the contractor’s obligations.
It also stressed that the contractor must prepare a final report that includes all products supplied by the contractor, indicating their country of origin – according to the contract – for the entire contract period, and providing the government agency with the report within 30 days from the end of the contract.
If a minimum approved percentage is set, the competitor must submit a valid local content certificate within his technical proposal in accordance with the terms and conditions contained in the competition documents, and in the event that the competitor does not achieve the minimum approved percentage through the local content certificate; The competitor is excluded during the technical evaluation stage.
Signing fines
When the contractor supplies a product that violates the mandatory list, the government entity will impose a fine not exceeding “10%” of the total value of purchase orders if the contractor violates the obligations contained in the terms and conditions annex related to local content requirements in the framework agreement.
A fine not exceeding 10% of the contract value shall apply if the difference between the target percentage and the local content percentage achieved at the end of the contract is more than 1%, in the mechanism of weighing local content in the financial evaluation and the mechanism of the minimum required for local content in accordance with the detail provided. In competition documents.
The fines mentioned in the regulations shall be applied to the contractor, provided that the total fines applied to him by the government entity under the law, its executive regulations, and the bylaws do not exceed “20%” of the contract value.
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