LOCAL CONTENT SCORE AND COMPLIANCE.
Local content, measured from the books.
In Saudi government procurement, a company's local content score decides whether it may bid for some contracts and how its bid is scored for others. GREENLINE prepares the score from the same payroll, purchasing records and asset registers that produce the financial statements, and tracks the local content each government contract has promised.
The certificate is audited by a firm on the approved list of the Local Content and Government Procurement Authority and approved by the Authority. GREENLINE prepares the calculation and the evidence. It does not certify.
NOTE 2.6
Local content.
Local content is total spending in the Kingdom on Saudi elements: the workforce, goods, services, assets and technology. The local content score is that spending as a share of total spending. This note sets out where the score counts, how it is built, how it is certified, and what a contract that promises local content must then deliver.
Where the score counts.
Exhibit 2A summarises the mechanisms that apply to government tenders under the Preference Regulations and the Authority's announcements. The tender documents state which mechanisms apply and at what rates.
| MECHANISM | WHAT IT DOES | SOURCE |
|---|---|---|
| Weight in the financial evaluation | In designated high-value contracts, price carries 60% and local content and listing carry 40%. The local content share is split equally between the bidder's baseline score and its target for the contract, and a company listed on the capital market receives 5 points. The Authority may raise these weights. | Regulations, Arts. 14, 17 |
| Minimum baseline | Where a project sets a minimum baseline, a bidder whose certified score falls below it is excluded at technical evaluation. | Regulations, Art. 15 |
| Minimum local content in a contract | In designated contracts, the bidder's target cannot be below the minimum stated in the tender, and both must be reached by the end of the contract. | Regulations, Arts. 23 to 27 |
| Price preference for national products | Foreign products are treated as 10% more expensive when bids are compared, for national products not on the mandatory list. | Regulations, Art. 10 |
| Mandatory list | Listed national products must be used. Non-compliant bids are excluded from supply and mixed tenders. | Regulations, Arts. 8, 9 |
| Mandatory list: minimum entity score | To benefit from the mandatory list, a manufacturer's entity-level certificate must meet a minimum score: 233 products from 1 August 2026, further products from 1 August 2027. | Authority, 17 Feb 2026 |
| Management consulting and IT services | From 1 April 2027, management-consulting tenders of SAR 10 million or more require a 30% minimum entity-level score, extending to SAR 5 million or more from 1 January 2028. IT-services tenders of SAR 10 million or more enter the weighting mechanism. | Authority, 16 Apr 2026 |
| Local SMEs | In contracts outside the high-value category, other than supply contracts, bids from non-SMEs are treated as 10% higher. | Regulations, Art. 4 |
The score, from the books.
The entity-level score follows the Authority's template and is built from four components, each traced to the records that already sit in GREENLINE.
The compensation of the Saudi workforce, and the part of non-Saudi compensation the template counts. From payroll, by nationality (Note 5.6).
Spending on goods and services, counted by their local content. From purchasing, by supplier and origin, with suppliers' certificates attached (Note 5.4).
Training of the Saudi workforce, research and development, and supplier development in the Kingdom. From the expense accounts and dimensions tagged for them.
Depreciation and amortisation of assets, by origin. From the fixed asset register and the lease register (Notes 5.7 and 1).
| COMPONENT | SOURCE IN GREENLINE | LOCAL CONTENT |
|---|---|---|
| Workforce | Payroll | 12,600,000 |
| Goods and services | Purchasing | 15,900,000 |
| Capacity building | Tagged expenses | 420,000 |
| Assets | Asset and lease registers | 2,280,000 |
| Local content | 31,200,000 | |
| Total spending for the year | Financial statements | 91,250,000 |
| Local content score | 34.19% | |
| Against a 30% minimum, such as management-consulting tenders from April 2027 | Met by 4.19 points |
The certificate.
The entity-level score is based on the previous year's financial statements. It is audited by a firm on the Authority's approved list, under the Authority's audit standards, and approved by the Authority through the Local Content Portal. It counts only while it is within its validity period. A company that has not completed a full financial year in the Kingdom is treated as having no baseline.
GREENLINE prepares what the audit firm asks for: the template reconciled to the audited statements, payroll by nationality, the supplier list with origin and certificates, the asset and lease registers, and the tagged capacity-building spend, each traceable to its source entries.
After the award: compliance contract by contract.
A contract won on a local content target carries obligations to its end. GREENLINE tracks each one from job costing (Note 5.4), so the local content reached is measured from the same records as the contract's cost.
| STAGE | OBLIGATION | WHAT GREENLINE DOES |
|---|---|---|
| Bid | State the targeted local content in the technical offer, not below any minimum in the tender, and submit the certified baseline where required. | Shows the current certified score and the contract's costed plan behind the target. |
| Within 60 days of award | Submit a phased plan on the Local Content Portal, consistent with the target. | Holds the plan's milestones against the contract. |
| During the contract | Submit periodic reports as the tender documents require, audited by an approved firm. Where reached local content falls well below the plan, explain the gap and set out a recovery plan. | Measures local content reached from the contract's cost records and shows it against the plan at each period end. |
| Purchasing for the contract | Use national products on the mandatory list, and declare the national-product share in supply contracts. | Flags purchase orders for listed items from non-national sources for review before approval. |
| End of contract | Reach both the target and any minimum. Submit an audited final report for the Authority's approval. The final guarantee is released only after the approved final report. | Prepares the final report's figures and the evidence behind them. |
| Consequences | A shortfall against the target beyond the tolerance in the Regulations can be fined up to 10% of the contract value, and late reports are fined. Total fines are capped at 20% unless the Minister raises the cap. Serious or repeated shortfalls are referred to the committee under Article 88 of the Government Tenders and Procurement Law. | Shows the gap early enough to act on it. |
The link to listing.
A company listed on the capital market receives 5 points within the weighted component of the financial evaluation. For a company preparing for the Saudi Exchange, a listing and a certified local content score work together in government tenders. See Note 3.
What GREENLINE does not do.
It does not certify the score, replace the approved audit firm, or submit on the Local Content Portal on your behalf. It does not decide which mechanisms apply to a tender; the tender documents do.
Other programmes, such as Saudi Aramco's In-Kingdom Total Value Add (IKTVA), use their own methodologies and are assessed separately before any commitment.
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Know your score before the tender asks for it.
BOOK YOUR FINANCE-READINESS DEMOThe rest of Note 2, ZATCA e-invoicing, the VAT return and the zakat declaration, is set out on the IFRS® and compliance page.