Local Value System Used in Government Procurement

ICV certifications will now be required as a criterion for measuring organizations when they receive bids.

Following a recent decision by authorities, procurement procedures in Qatar will now follow the in-country value system, which calls for businesses to present ICV or local value certifications with their financial offers.

The ICV system's incorporation into the country's total procurement procedures, which according to the government, is the law's most remarkable innovation.

According to Nayef Al Hababi, Director of Government Procurement Regulations Department at the MoF, "Perhaps one of the most important additions to the regulation is defining the local value of companies, which means the total amount spent by the contractor, supplier, or service provider within the country to improve national business, services, or human resources to stimulate productivity in the local economy."

"The local value is determined through a certificate of previously performed contracts and the plan offered by the bidder within his proposal," he continued.

ICV certifications will now be required as a criterion for measuring organizations when they receive bids. The concept is intended to create prosperous economic opportunities for local business owners while also drawing foreign investors to the nation.

The ICV system will be used to award tenders to the best proposals, with preference going to those with the lowest financial bids after calculating the local value ratio.

The modifications also included clear deadlines for organizing the offering processes, reaching a decision, and signing the contract, which was to take place within a maximum of 20 working days following the contractor's presentation of the final insurance.

After the contract is signed, its implementation must start within 90 working days, but not later than 180. To expedite procedures, improve tender efficiency, and prevent losses brought on by the length of the previous procedures' time, it is important to determine how long the acts specified in the regulation must take.

In the past, the ICV process was applied to a number of government bids for the oil and gas industry. Throughout the procurement process, national products, businesses with a high level of local value, and those submitting the least expensive financial bids after calculating ICV would be given preference.

At a news conference on Wednesday, representatives from the Ministry of Finance (MoF) said that MSMEs will now be granted more rights and exemptions, with more tenders available to them.

MSMEs, as defined by the Ministry of Commerce and Industry (MoCI), are now permitted to take part in restricted bids for less than QAR 5 million, according to the MoF. If their annual turnover is less than QAR 1 million, national micro-enterprises and SMEs are also excluded from bid and performance bonds as well as tender charges.

Furthermore, the cost of categorization will only be paid in full by micro and small-sized firms.

The changes are meant to boost participation in the Qatari economy from the private sector and non-oil industries.

The amendment was made following the approval of Cabinet Resolution No. (11) of 2022 by Amir Sheikh Tamim bin Hamad Al Thani, which amended many provisions of the Executive Regulations of the Tenders and Auctions Law No. (24) for the calendar year 2015.

The Qatar In-Country Value (QICV) program, which supports the growth of SMEs, and environmental, social, and general governance (ESG) for the financial sector, which supports the growth of the nation's private sector, are the two main pillars of the TAHFEEZ program, which was introduced by the MoF in 2021.