From Obligation to Advantage: Leveraging Local Content to Win Government Contracts

Understanding Local Content in the Saudi Context

Local content refers to the extent to which goods, services, labour, and technology used in a project are sourced within the Kingdom. In Saudi Arabia, the Local Content and Government Procurement Authority plays a central role in promoting and regulating this agenda across government procurement channels. Public sector buyers are now instructed to favour bids that offer higher local value, even when those bids are not the lowest in price.

The framework spans multiple dimensions, including the employment of Saudi nationals, use of local suppliers, transfer of knowledge and technology, and investment in domestic manufacturing and services. Businesses that embed these priorities into their operations are not only more likely to meet regulatory expectations, but also to build stronger positioning when competing for government contracts.

From Compliance to Competitive Advantage

What was once viewed as a compliance burden is now being recognised by forward-thinking businesses as a source of strategic differentiation. A well-crafted local content strategy can significantly enhance a company’s score during tender evaluations, increase visibility with key stakeholders, and open doors to large-scale infrastructure and development projects.

Leading bidders are increasingly integrating localisation into the core of their value chains. This includes forming strategic partnerships with Saudi businesses, sourcing from domestic manufacturers, training and employing local talent, and investing in research, development, and innovation within the Kingdom. Companies that show alignment with national priorities, such as the Human Capability Development Programme and the National Industrial Strategy, are also more likely to gain favour in public procurement processes.

Practical Steps to Enhance Local Content Capabilities

To turn local content from a requirement into a competitive advantage, companies should take the following actions:

1. Conduct a Local Content Diagnostic
   Begin by assessing current localisation efforts across operations. Review procurement practices, workforce composition, supplier engagement, and technology sourcing. This diagnostic provides a baseline for setting realistic and impactful improvement goals.
2. Develop a Strategic Local Content Plan
   Create a structured plan that aligns with Saudi Arabia’s localisation priorities. Define clear short- and long-term objectives, and outline implementation steps to integrate localisation into procurement, recruitment, and supply chain policies.
3. Support the Local Supplier Base
   Strengthen relationships with domestic suppliers through investment, technical support, and long-term contracts. This not only boosts local content scores but also builds more resilient supply chains and enhances operational agility.
4. Prioritise Human Capital Development
   Recruiting, training, and retaining Saudi talent is central to localisation efforts. Collaborate with local universities, provide upskilling opportunities, and establish career development pathways to build a sustainable Saudi workforce.
5. Implement Measurement and Reporting Frameworks
   Develop internal systems to track progress against local content targets. Transparent reporting not only enhances credibility in the tender process but also ensures continuous improvement and accountability.
6. Engage Actively with Local Authorities
   Maintain open communication with entities such as the Local Content and Government Procurement Authority, the Ministry of Industry and Mineral Resources, and local chambers of commerce. Engagement ensures early visibility into regulatory updates and partnership opportunities.

Aligning with Vision 2030

Local content is a fundamental enabler of Vision 2030. It supports key national priorities including job creation, economic diversification, technology transfer, and industrial self-sufficiency. As the government accelerates reforms and introduces new mandates, public procurement processes will increasingly reward businesses that make a tangible contribution to these goals.

From a strategic perspective, embracing local content is not simply about meeting a threshold, it is about positioning the business as a committed partner in Saudi Arabia’s growth story. Companies that succeed in doing so will enjoy stronger relationships with public stakeholders, greater access to major projects, and a more sustainable operating model in the Kingdom.

How We Support Clients

At Grant Thornton Saudi Arabia, we support businesses across all sectors in navigating the local content landscape. Our advisory services include diagnostics, strategy development, policy design, supplier engagement frameworks, and compliance reporting. We help our clients align localisation with commercial objectives, enabling them to compete more effectively, manage regulatory risks, and contribute meaningfully to national development.

Local content is no longer just a regulatory expectation, it is a strategic imperative. Businesses that understand this shift and respond with purposeful action will be best positioned to succeed in the evolving Saudi procurement environment. By moving from obligation to opportunity, companies can unlock growth, deepen their market presence, and build long-term value as trusted contributors to the Kingdom’s future.