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Local Content Preference Mechanisms

​Local content preference mechanisms are mechanism developed by the authority in cooperation with the relevant entities and was approved through a regulation by the Council of Ministers within the new Government Procurement Law. The inclusion of local content requirements in the new Government Procurement Law aims to direct national purchasing power through Local Content, SMEs, and Listed Companies’ Preference Policy.

Price preference:

A mechanism to grant national products a price preference by adding 10% to foreign products in government tenders.

Mandatory List:

The mandatory list is a list of the national products that the contractor is required to adhere to when purchasing products or services throughout the fulfillment of the contract.

The mechanism is applicable to all contracts whose scope of operation includes products on the list.

Local Content Score in Commercial Evaluation:​

This mechanism allocates a weight of 40% for the local content and for companies listed in the financial market during the evaluation phase of the offers, in addition to a price weight equivalent to 60%.  The mechanism applies to high-value contracts except sourcing contracts.

Minimum Local Content Threshold:​

 It is the minimum local content baseline that should be achieved by the contractor before the end of the contract. This baseline plays a crucial role in deciding the te​nder’s winner in the technical evaluation.

The contracting method of Localization of Industry & Knowledge Transfer (LIKT):​

The contracting method of Localization of Industry & Knowledge Transfer (LIKT) is a newly introduced government contracting method in the new Government Tenders and Procurement Law. LCGPA is responsible for supervising the activation of the method through cooperation with global investors and owners of leading technologies to localize the targeted industries in Saudi Arabia. For more information, click here.

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