Ministry of Industry and Advanced Technology and Ministry of Finance Start Implementing the In-Country Value Program on All Federal Government Procurement in the UAE
The announcement came during a media briefing in Abu Dhabi in the presence of His Excellency Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, and His Excellency Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology. It was followed by an introductory session on the mechanisms of applying the program to all types of purchases – including services and products – for all federal authorities, which was attended by His Excellency Omar Suwaina Al Suwaidi, Undersecretary of the Ministry of Industry and Advanced Technology, and a number of officials and representatives of the two ministries and members of the media.
His Excellency Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, affirmed the commitment of the Ministry of Finance to support and implement all programs and projects that enhance the country’s global competitiveness and achieve the sustainable growth of the national economy. He added that the ICV Program represents one of the priorities of the “Projects of the 50”, as it will support the industrial sector, upgrade its capabilities and enhance its contribution to economic diversification efforts.
His Excellency said: “In recent months, we have worked with our partners in the Ministry of Industry and Advanced Technology to ensure the efficiency and effectiveness of the procedures that will be developed to implement the program. We were keen to include the program’s mechanisms in federal government procurement policies so that the percentage of the national added-value is calculated from the total amounts spent by suppliers within the country on manufacturing, local products and services, the volume of investment, and the appointment and qualification of national cadres. We are confident that this step will have a direct positive impact that will contribute to the development of the efficiency of supply chains, and the development of local industries in a way that consolidates the country’s competitiveness in modern industries.”
His Excellency Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, said: “In line with the wise leadership’s vision to empower national industries, enhance their competitiveness and increase their growth and development prospects, the ICV Program was launched at the federal level in 2021. The program witnessed an encouraging response from large institutions and companies in the country, now totaling 13 entities, who wished to support the integrated strategy of the Ministry of Industry and Advanced Technology and the enabling and supportive national programs.”
His Excellency added that the program, which will be implemented through the collaboration of the Ministry of Industry and Advanced Technology, the Ministry of Finance and private sector institutions, will stimulate the growth of the industrial sector and enhance its competitiveness. As a priority element of the Projects of the 50, the program will benefit the country’s industrial and manufacturing sectors, and thus enhance the role of the industrial sector in supporting the UAE’s economic diversification plans and preparation for the future.
His Excellency pointed out that the implementation of the ICV Program at the federal level contributes to developing the competitive advantage of national products and services, and affords them more space to develop, grow and integrate the applications of the Fourth Industrial Revolution and advanced technology solutions. It also provides sustainable solutions to the growing demand for highly efficient supply chains, and this will increase the demand for Emirati products and services, promote the capabilities of local suppliers, and attract more foreign investments to the industrial sector.
The Ministry of Industry and Advanced Technology seeks to achieve the objectives of the national strategy for industry and advanced technology by creating a an attractive business environment for local and international investors in the industrial sector, supporting the growth of national industries, enhancing their competitiveness, stimulating innovation and adopting advanced technology in industrial systems and solutions. This strategy supports the country’s status as a global destination for industries of the future. The program will also enhance the performance of supply chains, develop new local industries and services, diversify local production, stimulate and attract foreign investment, and help diversify the wider economy.
Information and procedures
Officials from the two ministries provided information on the procedures and requirements for implementing the program at the federal level, and shone a light on its positive repercussions for the national economy. They also explained the nature of the partnership between the two ministries during implementation and the advantages that companies in the program it will obtain through working with federal government entities.
His Excellency Abdullah Al Shamsi, Assistant Undersecretary for the Industrial Development Sector at the Ministry of Industry and Advanced Technology, presented the In-Country Value Program and its benefits, as well as its importance to the national economy, the responsibilities of the program’s national committee, and the incentive system provided by the Emirates Development Bank, the strategic partner of the Ministry.
Al Shamsi said: “The In-Country Value Program represents a key pillar of the Projects of the 50, the initiative launched by the UAE government to ensure sustainable development for the next 50 years. The program will contribute to redirecting more than 42% of the purchases and contract expenses of government entities and major companies to the national economy, which will raise the demand for Emirati services and products from the current AED33 billion to AED55 billion by 2025. This is accompanied by an increase in the number of approved suppliers to 7,300 companies.”
Al Shamsi added: “The In-Country Value Program will increase the demand for products and services of Emirati companies, promoting their capabilities and attracting more foreign investments to the country’s industrial sector.”
His Excellency noted that in order to encourage companies to obtain the In-Country Value Certificate, the Emirates Development Bank, under an agreement with the Ministry of Industry and Advanced Technology, will provide competitive financing solutions to local suppliers and member companies in the program, in a way that will raise the demand for Emirati services and products.
The Ministry of Finance's key role
Her Excellency Mariam Mohamed Al Amiri, Assistant Undersecretary for General Financial Management, indicated that the Ministry implemented the requirements of the ICV program by amending the federal government's procurement policy.
She affirmed that the digital procurement policy will achieve numerous objectives in support of the ICV program. This begins with the program's guidelines, with ICV requirements now added as a basic standard for evaluating suppliers and affording them a competitive advantage.
She added that the policy was amended to ensure that these requirements are reflected in the current procurement system as well as the new digital platform, noting that an introductory workshop was held for federal authorities to familiarize them with the amendments to the government procurement system in line with the program.
She explained that the Ministry aims to enhance the system's ability to keep pace with digital government requirements at the bid evaluation stage. Suppliers of all federal agencies will be asked to submit an ICV certificate for tenders related to the products or services mentioned within the ICV program's framework, while applying a 25% weighting on them when evaluating bids on that basis.
The new ICV guidelines go hand in hand with digitalizing the procurement platform, simplifying supplier procedures in the registration process and reducing fees. Online bidding has also been introduced to offer the best prices in an easy manner, in addition to encouraging SMEs to participate in bidding by granting them special privileges.
The session then included a review of the In-Country Value Program certificate issued to companies, which reflects their contribution to the local economy and gives them preference in awarding contracts and purchases. The certificate is issued by accredited auditing companies to measure the value of companies’ local expenditure on manufacturing, products and services, the volume of capital investments in the country, and expenditure on salaries, employee expenses and advanced technology. The session also discussed the effects of the program on the transformation of supply chains, the development of industries, the establishment of new local services, the contribution to import substitution, the stimulation and attraction of investment, economic diversification, domestic production, and the creation of new job opportunities for nationals in the private sector.
In response to journalists' questions, the speakers explained the step required to join the program. It begins by filling out the application form in accordance with the guidelines and supplying audited financial statements, before selecting one of the authorized certification companies to issue the certificate. They also indicated that the required time period will differ from one company to another and from one supplier to another according to the size of the company and the number of its employees, and the company's readiness in terms of submitting the required documents to certification companies.
The officials also touched on the fees for joining the program, the validity period of the certificate, and other technical and procedural details.
Part of the “Projects of the 50”, the UAE government launched the In-Country Value Program at the national level to be implemented under the supervision of the Ministry of Industry and Advanced Technology. The program will contribute to increasing the demand for products and services of Emirati companies and suppliers, promoting the capabilities of local companies, and attracting more foreign investments to the industrial sector in the country.
The In-Country Value Program makes a positive contribution to the UAE’s industrial sector and the national economy as it enhances the business environment in the industrial sector. This has been clearly demonstrated by a number of large companies localizing the value chains of their businesses and achieving remarkable success in this regard. The program also helps increase investment in industry, as well as economic activities related to it, which will spur comprehensive growth in the country’s GDP.
Information box 2:
Since the announcement of the implementation of the ICV program at the federal level, the companies who have agreed to participate in it include the Abu Dhabi National Oil Company (ADNOC), the Abu Dhabi Department of Economic Development, Aldar Properties, the Emirates Nuclear Energy Corporation, Mubadala, Emirates Telecommunications Company (Etisalat), Abu Dhabi National Energy Company (TAQA), Emirates Steel Company, Emirates Global Aluminium, Edge Group, Etihad Rail Company, Tawazun Economic Council (Tawazun), and the Sharjah Investment and Development Authority (Shurooq).
Information box 3:
The ICV Certificate is issued after ensuring compliance with the standards of the certificate-awarding entities, which provide independent and impartial evaluation services. Companies with higher national added value results will be given preference in procurement and service tenders, in addition to allocating a large number of certificate awarding companies at the country level.
December 21, 2021