Press briefing of Cabinet Decision taken on 2020-07-15

Amending the procurement guidelines to support Domestic Industries

- It has been observed that, although provisions are included for domestic preference in the Government Procurement Guidelines, the possibility to achieve benefits for the domestic suppliers and companies from those provisions is limited. Under the COVID-19 pandemic situation, domestic companies and entrepreneurs seek more assistance from the Government to carry out their business activities. Taking this matter also into consideration, it has been found that the following domestic preferences are suitable to be provided to the sectors such as furniture and allied appliances, software and hardware and constructions which have been identified as domestic industries that can create more value addition with employment generation. Accordingly, the Cabinet of Ministers approved the following proposals submitted by the Hon. Prime Minister in his capacity as the Minister of Finance, Economy and Policy Development to define the companies with at least 51% of its ownership with Sri Lankan citizens as domestic companies when procuring goods and services for Government Institutions and provide opportunities for domestic preference for a period of 05 years.

(i) Procurement of the required office furniture and allied appliances only through domestic producers, where the value addition will be at least 50%.

(ii) Procurement of all the software requirement only from domestic companies and in case of failure to do so, such procurement to be carried out from non local companies, only with the approval of the Information and Communication Technology Agency of Sri Lanka and the General Treasury.

(iii) Specifications pertaining to the hardware required for the Government institutions will be formulated by the Information and Communication Technology Agency of Sri Lanka and if any institution is able to provide 25% value addition, such institution will be provided a selection of 30% preference in the procurement evaluation process.

(iv) All constructions including housing, roads, irrigation, water supply and sewage systems should be undertaken by the domestic contractors and if sub contracts are to be given for foreign contractors, such contracts should not be more than 10% of the contract price excluding provisional funds.

(v) To pursue action as above mentioned, to issue the amended procurement guidelines in consultations with the National Procurement Commission.