Ministry of Finance: Qatar In-Country-Value (QICV)

QICV Company Awareness Session

October 2022
Session Agenda

Subject Details Duration

1 Introduction and Objectives Opening remarks, introduction, and objectives for the session 5 min

2 QICV Overview Overview of QICV, ICV strategic objectives, framework and calculation methodology and formula 10 min

3 ICV Application Summary of ICV Scorecard and ICV Plan, and ICV application on the end-to-end sourcing process 30 min

4 ICV Digital Portal Training on how to register on the ICV portal, complete the ICV scorecard and get ICV certified 40 min

5 Closing Remarks/ Questions Closing remarks, Q&A, next steps 5 min.

2
Agenda

Introduction and Objectives

QICV Overview
ICV Application
ICV Digital Portal Training
Closing Remarks/ Questions

3
Workshop Objectives

KEY OBJECTIVES

1 Ensure QICV awareness among companies in Qatar

2 Educate companies on fundamentals of ICV

3 Train companies on how to use ICV Digital Portal

4
Agenda

Introduction and Objectives

QICV Overview
ICV Application
ICV Digital Portal Training
Closing Remarks/ Questions

5
The localization journey in Qatar started in 2018 with Tawteen in the energy sector and
it’s now implemented across Government entities within the TAHFEEZ program

Designed ICV as part of Launched and Digitized Design the National QICV as Operationalize ICV
Tawteen ICV across the Energy part of TAHFEEZ x-government
sector ↓ Today
2018 2019/ 2021 2021/ 2022 2022

• Designed ICV Initiative as
part of the Tawteen
Program including
objectives, formula, policy,
governance, integration
methodology and execution
toolkit
• Implemented ICV across
the Energy sector including
15 Energy Companies
• Launched the ICV Digital
portal ICV.qa
• Designed the National QICV Program as part
of TAHFEEZ
• Extend the ICV digital portal beyond the
Energy sector
• Updated the government procurement
regulations
• Implement QICV x-government entities
ensuring a strong understanding of ICV
policies and procedures
• Ensure QICV is operational x-Government
entities and integrated in their ways of
working

6
The Government sector embarked on a localization journey and established the TAHFEEZ
Program which was founded on 3 pillars, including Qatar In -Country Value (QICV)

Qatar In-Country Value (QICV)

1 2

Focuses on the adoption of the In-

Aims to create new investment
Country Value policy designed to
opportunities and enhance the
reward companies who fulfill their
private sector through knowledge-
contracts by contributing to the
transfer
growth of the economy

7
What is In-Country Value (ICV)?
Total amount spent by companies within the country to develop local business, services, or work force to enhance productivity
in the local economy

Contribute to Mechanism to Support Qatar in

sustainable economic promote GDP becoming globally
growth diversification competitive

Enable the
Way of working, not Key strategic
development of local
just a formula focus area
Companies

8
QICV is a fundamental pillar of the TAHFEEZ program which aims to achieve various
objectives to spearhead the localization agenda in Qatar

QICV Objectives

1. Maximize sustainable ICV creation from the sourcing of goods and services​

2. Upskill and develop local talent and companies

3. Promote in-country private investment

9
QICV’s strategic objectives constitute a key element of the QICV Framework designed to
enable localization in the procurement process across government entities & companies

QICV Framework

Strategic
Objectives of ICV
objectives

ICV formula
ICV formula and calculation & calculation
mechanism

ICV policy & Governance and rules of ICV

governance model

ICV procurement requirements

ICV integration methodology

ICV tools & ICV monitoring & ICV Certification & Reporting
templates reporting Enabled by the ICV Digital Portal

10
ICV strategic objectives and formula

Goods Cost of local tangible goods and materials

A
Services Cost of local services (manpower, subcontractors, etc.)
QICV Objectives

ICV formula
B Training of Workforce Cost of training offered to Qatari Nationals and Residents
𝑨+𝑩+𝑪+𝑫
𝑹
C Companies Development Cost of companies training and certification programs

D Investments in Fixed Asset Depreciation of company assets in Qatar

R Total Revenue in Qatar Total revenue value in Qatar

11
ICV penetrates deep into the supply chain

Tier 1 supplier
ICV%
Includes everything in the ICV formula
Internal costs except component A: goods and
services

Tier 2

Tier 1 supplier ICV%

Supplier 1 Supplier 2 Contractor 3 depends upon its tier 2
Companies’ ICV scores
and its internal costs
ICV% ICV% ICV%
Applies for
component A:
goods and
services Tier 3

Tier 2 Companies’ ICV

Supplier 1a Supplier 1b Supplier 1c Supplier 2a Supplier 2b Supplier 2c Sub-contractor Sub-contractor
3a 3b
scores depends upon their
Companies (tier 3), and so
ICV% ICV% ICV% ICV% ICV% ICV% ICV% ICV% forth

12
Example of Calculation of ICV contribution through spend on Services
with Companies
Example
Company Name Spend (QAR Mn) Supplier ICV Score ICV Contribution (QAR Mn)

Company 1 1,400 × 70%

= 980

Company 2 396 × Not Available

= -

ICV Scorecard Submission Template

Available for Companies on ICV.qa

Company 1 1,400 70% 980

13
ICV governance model

Program Governance

MoF and National ICV Committee

Drive overall program and its strategy

Auditor/ Tawteen
Conduct audits on the certifiers and provide a summary report with corrective actions

Govt. Entities
Certifiers
Engage with Companies to get them certified and provide certificate / summary report to Companies and government entities Receive certification
outcome and
Company ICV scores
in order to integrate
ICV into their
procurement activity
Companies
Complete the ICV scorecard and plan and provide supporting documentation as required

14
Agenda

Introduction and Objectives

QICV Overview
ICV Application
ICV Digital Portal Training
Closing Remarks/ Questions

15
ICV Application: ICV scorecard and ICV plan

Key Considerations:
• ICV is applied in all tenders that go to Tender Committee
• The ITTs will specify if ICV is applied and if an ICV scorecard certificate or an ICV plan is required
• Companies will receive up to 5%/10% preference during commercial evaluation based on ICV%
• Companies can still bid even if they haven’t submitted an ICV scorecard/plan however they will be assigned 0% ICV score

ICV scorecard ICV plan (applied on large projects)

ICV Application

• Certified by preapproved certifier • Certified by preapproved certifier at end of the contract

• Based on latest 12-month audited financial statements • Based on ICV forecast for contract duration

• Renewed annually • Submitted per contract

• ICV Scorecard is always used for the case of Split Awards or • Applicable for selected contracts

Framework Agreements • ICV Retained Amount applies

16
 ICV application on the end-to-end sourcing process

1 Invitation 2 Bid 3 Bid Evaluation 4 Contract Execution &

To Bid Preparation & Award Completion

• Specify that companies shall

• Consider ICV score available on ICV.qa on
submit valid ICV scorecard - -
Govt.
bid closing date during commercial eval.
certificate
Entity

ICV
Scorecard • Get ICV scorecard certified
• Get ICV scorecard certified • Obtain up to 5%/10% pref. due to ICV
• Submit valid- score on closing score
-
• Ensure valid score on closing date
Company date

• Monitor ICV Plan execution inc. updates

• Specify that companies shall • Consider ICV Plan during commercial eval.
submit ICV plan • Update ICV retained amount, if needed
- • Include ICV retained amount in BoQ
Govt.
• Include ICV plan in contract T&Cs • Apply ICV plan rewards/ penalty scheme
Entity • Agree on ICV Monitoring mechanism
after project completion
ICV Plan • Provide ICV Plan progress update
• Obtain up to 5% pref. due to ICV score • Raise ICV Plan impact assessment, if
• Prepare and submit project
- • Agree on ICV retained amount in BoQ needed
ICV Plan
Company • Agree on ICV Monitoring mechanism • Submit ICV Plan for certification after
project completion
17
ICV Plan – Bid Evaluation and Award

• Bidders’ commercial scores are calculated taking into consideration their bid price & ICV%, bidders are ranked accordingly
Commercial Score
• The bidder with the most competitive commercial score will be awarded the contract

• Difference between SELECTED commercial bid and LOWEST commercial bid is calculated as a retained amount

ICV Retained Amount Contract value = Lowest Bid (Net Contract Price) + ∆ Bids (ICV Retained Amount)

Commercial bid Commercial

Company ICV plan Rank
(QAR mn) score

Bidder 1 541 41% 319.2 1

ICV Retained Amount = SELECTED bid – LOWEST bid
Bidder 2 560 47% N/A -

= QAR 11mn (541 – 530)

Bidder 3 533 38% 330.5 2

Bidder 4 530 35% 344.5 3

541 mn = 530 mn (Net Contract Price) + 11 mn (ICV Retained Amount)

18
ICV Plan – Contract Execution and Completion – ICV Plan Monitoring

During contract award, the government entity and the company shall agree on the ICV Plan monitoring scheme during project execution
1
The monitoring scheme depends on the size and duration of the contract

In case the agreed upon monitoring scheme includes at least a midpoint review, then the following can apply during the reviews:
2
• Under-achieving companies are requested to prepare, submit, and receive approval on ICV improvement plan

At contract completion, the Government Entity will reward or penalize the company based on the achieved ICV % (certified at project completion) compared to the
3 planned ICV %

19
ICV Plan – Contract Execution and Completion – ICV Plan Rewards and Penalties Scheme

In case of ICV Plan, rewards and penalties are applied based on the achieved percentage of the planned ICV at project completion
If Companies achieve or exceed their planned ICV score they will receive the full ICV retained amount.
If Companies did not achieve their planned ICV score, they will either receive a percentage of the retained amount or be subject to penalties

Rewards and Penalties Scheme

Actual ICV %
Achieved % of planned ICV (Certified after completion) x 100
Planned ICV %

Achieved % of planned ICV < 50% 50%= < Achieved % of planned ICV < 70% Achieved % of planned ICV >=70%

• ICV score for scorecard & plan is set to 0% in the ICV portal for
Submitted 12 months The ICV score for both scorecard and plan is set
lowest price No action
Contracted Company

to 0% in the ICV portal for 12 months

in tender • The govt. entity retains the bank guarantee according to
difference between 50% & achieved ICV %

Didn’t
• The ICV retained amount is not released by the govt. entity The government entity releases the
submit The ICV retained amount is not released by the
ICV retained amount according to the
lowest price • The govt. entity retains 50% of the bank guarantee government entity
achieved ICV % and up to 100%
in tender

20
ICV impact on your ways of working
Company ICV Certification
1 2
Company registers to ICV
Digital Portal (ICV.qa)
Company
4 3
Certifier validates the ICV
Scorecard
Certifier
5 4
Company & Certifier
confirm & issue
the ICV certificate
Both
Valid ICV Scorecard Certificate on
the portal ready to be used in bids
1 1
Company engages with a
pre-approved ICV certifier
Company
2 the bid and ensures score is
Company completes &
submits the ICV Scorecard
to ICV certifier
Company
ICV in Sourcing ICV in Contract Execution (for the case of ICV Plan)
Govt. entity defines bid
Company provides the buyer with actual vs forecast ICV
strategy (i.e. scorecard,
data, throughout the duration of the project
plan, etc.)
Govt. Entity Company
3 ICV Scorecard
2
Company submits ICV
Scorecard certificate with Company fills the ICV plan tracker throughout the
duration of the project
Govt. entity sends tender valid on bid closing date
Company
to Companies, provide Company
ITTs and T&Cs on ICV ICV Plan
Govt. Entity
Company submits ICV plan
offline template with the bid
Company 3
Certifier certifies ICV plan tracker at the end of the
project
Certifier
Govt. entity applies ICV to
evaluate bids & award
lowest commercial score
Govt. Entity Rewards Penalties
Letter of Award Rewards and penalties are applied based on achieved ICV Plan
21
Break – 10 Minutes

22
Agenda

Introduction and Objectives

QICV Overview
ICV Application
ICV Digital Portal Training
Closing Remarks/ Questions

23
The ICV Digital Portal is the primary tool used to implement ICV and plays a key role in
transforming the way different stakeholders engage in the ICV program

The ICV Digital Portal plays a key role in transforming the way different stakeholders engage in the ICV program including Companies,
certifiers, government entities, auditors and creates a unified and integrated omni-channel experience

Accessible one-stop ICV Portal for Companies, Certifiers,

Government Entities, and ICV Management & Leadership

End-to-end digitized and efficient ICV submission,

certification, audit and monitoring

Established ICV database and reporting tools providing

sector level ICV insights

Maximized traceability, transparency and consistency of ICV

processes

24
 Companies can register, fill their ICV scorecard, engage with certifiers and obtain the ICV
Certificate on the ICV portal

The Engagement page allows

The Registration Page allows Companies to access the list
Companies to register and of previous and active
get access to the ICV digital engagements with their
portal features certifiers. Companies can
approve engagement
initiated by certifiers to start
the certification process
The Company Home Page Registration page Home page Engagements page
can be used by Companies to
start and create a new ICV
scorecard, receive actions
and notifications, and view
some ICV performance
dashboards

ICV scorecard page Certificate page Through the Certificate Page,

The ICV scorecard Page
Companies approve their ICV
enables Companies to fill an
certificate, download it, and
ICV scorecard template and
access their continuously
submit it for certification
refreshed ICV score

Please visit https://icv.qa/ to learn more

25
ICV Portal Demo - www.ICV.qa

26
Agenda

Introduction and Objectives

QICV Overview
ICV Application
ICV Digital Portal Training
Closing Remarks/ Questions

27
Questions

28
Thank you