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Companies with Local Content Certificates to get head start in bids for contracts within oil sector under new policy
Dr. Martin Pertab, Director of the Local Content Secretariat
Kaieteur News – Guyanese companies holding Local Content Certificates are set to get a greater head start in bidding for contracts in the oil sector as a result of a new policy under the local content regulation.
According to information posted via the Ministry of Natural Resources’ website, companies that hold Local Content Certificates automatically score extra points in the evaluation process of bidding to secure contracts for the supply of goods or services within the oil industry.
Previously, local companies or those that are 51 percent Guyanese -owned and hold Local Content Certificates get an automatic 5 percent weighting score in the bidding process which causes them to be given priority among other companies bidding for contracts.
Under the new policy, Guyanese-owned companies will now have an automatic 10 percent weighting score doubling their chances of securing the contract amongst bidders.
The guidelines now stipulates, “Where local content is evaluated as a separate criterion (outside of the technical criteria), the weighting allocated to local content consideration shall be no less than 10 percent of the overall scoring used for the evaluation of bidders.”
The policy is in keeping with the Local Content Act, under which companies within the oil sector are obligated to incorporate local companies as part of their bid evaluation process.
As such, these contractors, sub-contractors and licensees, are given guidelines which serve to provide clarity relative to the bid evaluation requirements.
The guidelines are intended to provide clarity to contractors, sub-contractors and licensees on the law as it relates to procurement requirements to ensure fair competition and transparency in tendering processes of contractors, sub-contractors and licensees; ensuring that there is preference to, or equal treatment of, Guyanese nationals and Guyanese companies; and ensuring the procurement process of contractors in the oil sector support local capacity development and transfer of skills and technology.
To ensure objectivity in any competitive bidding process, the document noted that a contractor, sub-contractor or licensee assign a score or a weighting to the local content criteria in accordance with where an oil company or contractor evaluates local content as part of the technical evaluation criteria, the weighting of local content considerations shall be no less than 10 percent of the total score allocated to the technical criteria used for evaluation.
“For example, where the score for the technical criteria is 100, for local content score shall be no less than 10,” the document explained.
The Government of Guyana has been working to fulfill its commitment to ensuring that the benefits derived from the foreign direct investments into Guyana’s petroleum sector, are captured and retained in-country, through the enactment of the Local Content Act of 2021.
The Act provides for the implementation of local content obligations on companies and persons engaged in petroleum operations or related activities in the petroleum sector and prioritize Guyanese nationals and Guyanese companies in the procurement of goods and services for the enhancement of the value chain of the sector.
The Act also serves to enable local capacity development and provide for the investigation, supervision, co-ordination, monitoring and evaluation of, and participation in, local content in Guyana.
The Local Content Secretariat is mandated to ensure that the provisions of the Act are implemented and functions as the regulatory arm for the monitoring, evaluation, coordination and reporting of local content in the petroleum operations of Guyana.
In so far as the Act mandates every contractor, sub-contractor, or licensee to implement local content as an essential component of their petroleum operations, the secretariat, through the issuance of industry guidelines, aims to provide detailed and specific guidance to contractor, sub-Contractors or Licensees with regards to their reporting obligations.
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