Package a subcontract under Saudization and local content

Split the works into procurement packages and give each one its share of what the main contract committed you to: the labour content, the local content percentage and the value it represents. Say which packages are labour heavy and which are supply heavy, because they carry the two obligations in opposite proportions.

Why: A commitment held only at project level is one nobody can be held to. Split across packages, each buyer knows the number their package has to deliver and can see at award whether they have bought it. A local content target that arrives at the end as a single project percentage is a target that gets discovered as a shortfall when there is nothing left to buy.

Check each candidate on the record rather than on the reference: contractor classification in the field and activity the package needs, current commercial registration, zakat, tax and social insurance certificates, the Nitaqat band, and the local content certificate with the percentage it actually states.

Why: The band is the one people skip because it looks like the subcontractor's own business. It is not. A firm in the red band cannot renew work permits or transfer workers in, so the crew it promised for month four is a crew it has no lawful way to assemble. Reading the band at prequalification is how you find that out while there is still another bidder.

Send one enquiry with one bill, and require each bidder to state the same things beside the price: the local content he will deliver and how it is made up, the crew he will staff the package with, and where that labour comes from. Compare the returns on those columns as well as on the total.

Why: Priced against a common bill, the cheapest number is a fact. Priced against three different assumptions about who supplies the labour, it is a guess. Asking for the local content composition at enquiry also does something the award cannot: it lets you see which bidder has thought about it, because the one who has will answer with named suppliers and the one who has not will answer with a percentage.

Draw the subcontract with the commitments as terms rather than as expectations: the local content percentage and how it will be evidenced, wage protection compliance as a condition of payment, the obligation to keep the classification and the certificates current, and notice to you if the band changes.

Why: You are answerable to the employer for numbers you do not control. Where the obligation is written down, a shortfall is a breach with a remedy attached and the conversation happens in month three. Where it is not, the first anybody hears of it is your own report to the client, and by then the only remedy left is to explain.

Register the expiry of every certificate you prequalified on and re-check the band at agreed points through the package rather than only at award. Ask for the evidence again before each milestone payment, not because the subcontractor is suspected but because a band is a moving measurement.

Why: A band is recalculated as the workforce changes, so a subcontractor who was green at award can be red by the time he mobilises without having done anything visible. Since April 2026 an employment contract that is not documented electronically on the labour platform stops counting toward the percentage, which means a firm can slip a band through paperwork alone.

Build the local content position from the spend that actually went out, supplier by supplier, with the certificate or declaration behind each line, and report it against what was committed. Where the job also reports under the in-Kingdom total value add programme of an operator, keep that measurement separate rather than reusing the government figure, because the two methodologies are not the same.

Why: Local content is audited against invoices, so a figure assembled from intentions does not survive the first sample. Keeping the two schemes apart matters just as much: they are administered by different bodies, measured on different rules and reported on different platforms, and a contractor who submits one authority's number to the other has filed something he cannot support.

Value the subcontractor's work as measured and check the conditions the subcontract attached to payment before certifying: wage compliance evidence for the period, the certificates still current, the local content return submitted. Where something is withheld, state which term it is withheld under and what would release it.

Why: A condition nobody checks is a condition that was never agreed. Checking it at each valuation is also fairer than the alternative, which is a large deduction at the end for months of small omissions nobody mentioned. A withholding that names its clause and its cure gets fixed. One that just appears becomes a dispute about the deduction rather than about the obligation.