Procurement guidelines to be amended to give preference to local companies

Friday, 17 July 2020 00:00 - - {{hitsCtrl.values.hits}}

Cabinet approves proposal by PM to expand existing guidelines
Says effort to give extra support to COVID-19-hit businesses
IT, construction, furniture manufacturers to benefit most from new move

As part of its effort to support COVID-19-hit industries the Cabinet this week gave permission for an adjustment in procurement guidelines to give preference to local companies when State institutions seek goods and services.

Cabinet Spokesman Bandula Gunawardana said that Prime Minister Mahinda Rajapaksa as the Finance, Economic, and Policy Development Minister presented a proposal to allow local companies and entities with 51% Sri Lankan ownership to get preferential treatment when bidding for Government tenders. Procurement of office furniture will only be from companies that have at least 50% local value addition.

Procurement...

“There are already Government procurement guidelines that give preferences to local companies when submitting tender bids. However due to the circumstances generated by COVID-19, the Government has been requested by local companies and entrepreneurs to provide more assistance. Taking this into consideration, the Government will attempt to give more opportunities to local companies so they can in turn generate more employment opportunities and expand their businesses,” Gunawardana said.

Industries that the new regulatory changes will support include: furniture manufacturers, construction, IT companies, and equipment manufacturing or loaning entities, according to the release given by the Government Information Department.

The statement also said procurement of all the software programs will be only from local companies, unless they are not able to provide them, in which case an international company can be sought to make the purchases, subject to the approval of Sri Lanka Information and Communication Technology Agency (ICTA).

ICTA will also make specifications of the relevant hardware needed for Government institutions, and local suppliers will get preference. If local companies who are bidding for these tenders also create 25% value addition, they are eligible to have additional benefits during the bidding process.

Under the new proposals, it has also been decided that all constructions, including houses, highways, and irrigation, water supply and sewage systems should be awarded to local contractors. The value of the contracts, if given as sub-contracts to foreign contractors, should not exceed 10% from the contract value without temporary funds.

The Finance Ministry will work to issue the amended procurement guidelines in consultations with the National Procurement Commission.