Finance Ministry seeks public input on local content preference policy amendment

Logo of Local Content & Government Procurement Authority

Saudi Arabia’s Ministry of Finance sought public opinion, though Istitlaa Platform, on the amendments to local content, SMEs, and listed companies’ preference policy 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 SMEs in the national economy, as well as increases the competitiveness of national capabilities in government procurement.

The expected effect of amendments is to contribute to developing the local content at the level of the national economy and increasing the development benefit from government purchases.

The amendments included granting local SMEs a price preference, assuming that the prices of local SMEs’ offers are 10% lower than those of other establishments mentioned in the tender documents.

The amendments shall be applied to mixed tenders - which include supply as well as business and service items - according to the dominant items in terms of value, if the parts of the contract are not separate. If the parts of the contract are separate, local content mechanisms shall apply to each part.

Further, the government should apply the price preference mechanism to the national products not included in the mandatory list - in all contracts.

The national product is also given a price preference, assuming the price of the product is 10% lower than what is stated in the documents.