المملكة: Controls to measure local content: 10 suppliers as a minimum and disclosure covering 70% of expenses

I introduced The national economy, especially in government contracts and competitions.

Data documentation controls

The authority stressed the necessity of attaching all documents and requirements specified within the electronic services portal, while ensuring that the establishment’s application data is entered accurately and correctly, including the measurement period, the unified national number or license number, and the name of the establishment in Arabic and English, in addition to the name of the contract or competition, its number, and the date of its offering.

It stressed that the completeness and validity of the data represents a pillar. Essential for approving verification requests, and they limit observations or re-applications to complete deficiencies, which is reflected in the speed of completion and quality of results.

Analysis of employee compensation

The authority explained that among the basic requirements is obtaining an analysis of the total employee compensation and actual working hours associated with the implementation of the contract, whether directly or indirectly, during the reporting period, and this includes workers in the implementation sites, project managers, and others associated with the contract.

The analysis must include a classification of workforce categories according to Gender is “males and females,” and according to nationality “Saudis and expatriates,” in addition to disclosing the average number of employees during the reporting period.

This analysis also needs to be matched with the relevant figures included in the approved form, ensuring complete consistency between the detailed and overall data.

Expenses for goods and services

With regard to expenses for goods and services, the updated document stressed the need for the number of suppliers disclosed in the form to not be less than 10 suppliers, or for the remainder to be… Expenses on goods and services are zero, whichever comes first.

The establishments are required to cover the disclosed expenses of no less than 70% of the total costs of goods and services, or to include the top 40 suppliers arranged in descending order according to cost, with the need to record any differences that appear between the analysis and the model, to ensure transparency and accuracy in calculating the percentage of local content.

The authority confirmed that if the supplied good is locally manufactured, and the local supplier is not The source of the commodity must be explicitly disclosed in the form, by mentioning the name of the manufacturing plant, and including the unified national number of the source, if any.

This procedure comes to ensure accurate tracking of supply chains, verify the added value achieved within the Kingdom, and prevent undue percentages from being counted among the local content components.

Amounts of depreciation and amortization

The updates also included the requirement to obtain an assets register that shows a detailed analysis of the assets used in implementing the contract within the Kingdom of Saudi Arabia throughout the reporting period. With a statement of the depreciation and amortization amounts associated with them.
The analysis must include clarifying whether the assets were produced or developed within the Kingdom, or imported from abroad, with the amounts related to them included in the approved model, which is reflected in the calculation of the percentage of local content with greater accuracy.

In the event that there are assets consisting of several elements – such as factories or power plants – and the value of their depreciation is considered significant, the document requires detailing these elements within the assets register, with an indication of whether they are produced or developed locally. Or imported, to ensure that undue components are not counted in the final percentage.

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