The Saudi Local Content and Government Procurement Authority (LCGPA) activated its decision to amend the limit of government contracts value that are classified as high-value, to become equivalent to or more than SAR 50 million, instead of the previously determined value of SAR 100 million, Saudi Press Agency (SPA) reported citing LCGPA’s statement.
The decision takes effect today, Aug. 20 which marks the beginning of the new Hijri year 1442, the authority added.
LCGPA indicated that the mechanisms of the local content preference list, small and medium enterprises (SMEs), and listed companies are applied to the high-value contracts.
The decision was issued in coordination with the Center of Spending Efficiency (CSE), according to the preference regulations for local content, SMEs, and listed companies, which stipulated that LCGPA and CSE have to determine the limit of high-value contracts.
The decision came as a result of quarterly reports and studies prepared by the authority, which revealed a remarkable growth in the application of local content requirements for government competitions and procurement.
Based on these results, the two parties decided to reduce the value of the high-value contracts in order to boost competition coverage and maximize the benefit from the local content weighting mechanism and the minimum mechanism.
The LCGPA invited potential bidders from the private sector facilities to submit a request for assessing the baseline of local content and get the authority’s approval. This move will enhance their opportunities upon technical and financial assessment.
The local content preference, SMEs and listed companies’ regulations set two mechanisms for the local content preference in the high-value contracts. These mechanisms are the local content weight in financial evaluation, and the minimum level required of local content.
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