Picture a contractor with the cheapest technically qualified bid on a large government services contract. They can still come second. A rival a few percent more expensive, with a strong local content certificate on file, can overtake them once the evaluation formula is applied.
This is how the system is designed. Since local content rules were written into the Government Procurement Law, the certificate issued by the Local Content and Government Procurement Authority (LCGPA) has become part of the price comparison on larger tenders. The figures below are as of October 2026, and LCGPA notes some values can change by agreement with the Expenditure Efficiency Authority, so always check the tender documents.
How the scoring works on big contracts
For high-value contracts of SAR 25 million or more, other than pure supply contracts, price counts for only 60% of the financial evaluation. The other 40% is split between your targeted local content percentage for the contract (half of it), your certified baseline from the local content certificate (the other half), and 5 extra points if your company is listed on the Saudi exchange (LCGPA guide to local content mechanisms.pdf?forcedownload=1)).
There is a guardrail. The highest-rated bid can win only if its price is no more than 10% above the lowest technically qualified bid. Beyond that, the award moves to the next bidder.
So a strong baseline won't rescue an overpriced bid. Inside that 10% band, though, it often decides the result.
What if you submit no certificate? Where the tender sets no minimum, a baseline of 0% is applied in the financial evaluation. Where it does set a minimum baseline, a bid without one is disqualified (LCGPA minimum local content requirements).
Supply contracts follow different rules
If you sell products into government projects, the main tool is the price preference. For evaluation, foreign products are treated as if they cost 10% more, scaled by the share of national products in your bid. LCGPA also runs an additional preference of up to 20% on top of that for some products, and a Mandatory List of national products that contractors must buy locally regardless of project size (LCGPA local content mechanisms).
Getting the certificate
The baseline measures how much of your spending stays in the Kingdom. LCGPA looks at four components: employee compensation, goods and services, capability development, and depreciation of assets.
The process runs online. You appoint an audit firm qualified by LCGPA, give it your financial statements, payroll data and a breakdown of local versus imported purchases, and it performs agreed-upon procedures and submits a measurement report. LCGPA's stated turnaround is 10 working days once a complete, correct file arrives (LCGPA baseline calculation service, National Portal service page).
The certificate is valid for 19 months from the date of the financial statements it measures. Work that out early. A certificate based on December 2024 accounts runs out around July 2026, and it is easy to miss until a tender closes in the gap.
Where companies lose points
Weak scores often come from bookkeeping, not from the business itself. Purchases from a Saudi distributor of imported goods get coded as local. Saudi and expatriate payroll aren't separated cleanly. Training spend that would count as capability development is buried in general admin.
None of that is hard to fix, but it has to be fixed before the year closes, because the measurement follows the audited accounts. A few steps worth taking now:
- Put a renewal date for your certificate in the bid calendar.
- Ask your top suppliers for a local content figure or a certificate of their own.
- Tag training and Saudi development costs in the ledger as they happen.
FCG advises contractors and suppliers on local content planning and on where the score can realistically go up. The measurement and certificate work is delivered through our associate audit firm, Gadwalah CPA.
Read more about our Local Content service, or book a free consultation and we'll look at your current score and your tender pipeline with you.
