Logo ofLocal Content Government Procurement Authority
Saudi Arabia’s Ministry of Finance sought public opinion, though Istitlaa Platform, on the Local Content, SMEs, and Listed Companies’ preference policy draft amendments until Jan. 20, 2025. 
The regulation aims to establish provisions for local content that take into account differences in government contracting methods, which contributes to the development of local content and small and medium enterprises in the national economy, and to increase the competitiveness of national capabilities in government procurement.
The expected effect of amending the local content preference regulation is to contribute to developing local content at the level of the national economy and increasing the development benefit from government purchases.
The amendments included an amendment to “Paragraph 2” and the addition of a new “Paragraph 4” to “Article 4”, so that it becomes after the amendment: the government entity when it launches and carries out its work and its purchases shall do the following:
2- Giving local SMEs a price preference, assuming that the prices of local SMEs’ offers are 10% lower than the prices of other establishments’ offers mentioned in the tender documents of the competitors, in all contracts – except for supply contracts that do not fall within the scope of the high value contract.
4- The mechanisms contained in this article shall be applied to mixed tenders – which include supply items and business and service items – according to the dominant items in terms of value, if the parts of the contract are not separate, and if the parts of the contract are Separate local content mechanisms shall apply to each part.
The amendments also included amending “Article 10” to become:
1- The government entity must apply the price preference mechanism for the national product to national products of goods – not included in the mandatory list – in all contracts.
2 – The national product is given a price preference, assuming the price of the product is 10% lower than what is stated in the documents. The supply, and the percentage may be modified according to controls issued by the authority – for products of goods or establishments – in agreement with the Government Expenditure Projects Efficiency Authority, provided that the amended percentage is stated in the competition documents.
The amendments also included amending “Paragraph 1” in “Article 11”, which reads: In supply tenders, the government entity compares the shares of each supplier’s national products for the purpose of financial evaluation. What matters in the financial evaluation is the adjusted offer value according to the following equation:
Adjusted offer value = offer price in Saudi riyals -10% x the offer price in Saudi riyals x the share of national products.
Logo ofLocal Content Government Procurement Authority
Saudi Arabia’s Ministry of Finance sought public opinion, though Istitlaa Platform, on the Local Content, SMEs, and Listed Companies’ preference policy draft amendments until Jan. 20, 2025.
The regulation aims to establish provisions for local content that take into account differences in government contracting methods, which contributes to the development of local content and small and medium enterprises in the national economy, and to increase the competitiveness of national capabilities in government procurement.
The expected effect of amending the local content preference regulation is to contribute to developing local content at the level of the national economy and increasing the development benefit from government purchases.
The amendments included an amendment to “Paragraph 2” and the addition of a new “Paragraph 4” to “Article 4”, so that it becomes after the amendment: the government entity when it launches and carries out its work and its purchases shall do the following:
2- Giving local SMEs a price preference, assuming that the prices of local SMEs’ offers are 10% lower than the prices of other establishments’ offers mentioned in the tender documents of the competitors, in all contracts – except for supply contracts that do not fall within the scope of the high value contract.
4- The mechanisms contained in this article shall be applied to mixed tenders – which include supply items and business and service items – according to the dominant items in terms of value, if the parts of the contract are not separate, and if the parts of the contract are Separate local content mechanisms shall apply to each part.
The amendments also included amending “Article 10” to become:
1- The government entity must apply the price preference mechanism for the national product to national products of goods – not included in the mandatory list – in all contracts.
2 – The national product is given a price preference, assuming the price of the product is 10% lower than what is stated in the documents. The supply, and the percentage may be modified according to controls issued by the authority – for products of goods or establishments – in agreement with the Government Expenditure Projects Efficiency Authority, provided that the amended percentage is stated in the competition documents.
The amendments also included amending “Paragraph 1” in “Article 11”, which reads: In supply tenders, the government entity compares the shares of each supplier’s national products for the purpose of financial evaluation. What matters in the financial evaluation is the adjusted offer value according to the following equation:
Adjusted offer value = offer price in Saudi riyals -10% x the offer price in Saudi riyals x the share of national products.
