Why is ICV Certification Critical For Your Business in UAE? : –  

A procurement-led ICV program was introduced in 2018 by the Abu Dhabi National Oil Company (ADNOC) to encourage Emiratisation, GDP diversification and strategic considerations. Later, upon the success of the program, a national ICV certification program was launched by the Ministry of Industry and Advanced Technology (MoIAT) in 2021. In this background, the suppliers are required to understand why ICV certification is critical for their business.

The launch of the national In-Country Value (ICV) program offers a great opportunity for suppliers to win tenders of government and semi-government entities. Getting an ICV certificate gives the companies a certain weightage during tender assessments. The suppliers may obtain an ICV Certificate showing a score based on their contribution as per the latest audited financial statements and other factors.

The National In Country Value Program : –

The National In-Country Value (ICV) Program by the UAE government aims to boost economic performance and support local industries by redirecting higher portions of public spending into the national economy. The program takes into consideration local expenditure on manufacturing, local products and services, investments, and the hiring and development of Emiratis. It aims to support the national industry and redirect expenditure on procuring goods and services into the national economy. Basically it evaluates the contribution to the local economy.

Strategic objectives of ICV program

• Localization of supply chains and the development of new local industries and services
• Stimulating and attracting foreign investments and diversifying the economy
• Creating valuable job opportunities in the private sector
• Increasing exports
• Contributing to the growth of GDP
• Increase the private sector’s contribution to national GDP.

Why ICV Certification : –

• ICV score is an integral part of bid evaluation of the participating entities and it will give added weightage for the suppliers and vendors in the award process.
• The ICV certification program creates more opportunities for local suppliers to enter partnerships with foreign businesses wishing to leverage the competitive advantages of a joint supply chain
• The holders of the ICV certificate can have a contractual advantage with the partner companies and federal authorities.
• Entities who are indirectly connected with the tenders also benefit from the ICV certification program; as ICV-certified supplier “spend” that remains within the UAE or contributes to the UAE economy, is considered for ICV calculation purpose.
• Individual entrepreneurs, as well as small and medium-sized enterprises (SMEs), can boost their business growth as value chains become localised on account of the ICV program
• Key objectives of the ICV program include promoting local companies, introducing the products of the local companies into the market, and generating high-skilled jobs

ICV Improvement Plan :-

ICV improvement plan carries more weightage during bid evaluation compared to the existing ICV Certificate. Therefore, even if a Company’s ICV Certificate is showing a good score, there are still chances to be at a competitive disadvantage if the improvement plan will not be showing notable improvement in ICV score in subsequent years covering the agreement year. The ICV Improvement Plan is a contractual commitment linked to payment against the achievement of actual ICV achieved with the ICV committed as per the ICV Improvement plan. The improvement plans can be either company based or agreement based. Having a sound improvement plan helps improve your ICV Score thus gaining greater edge in bidding process.

What is ADNOC ICV – In Country Value?

The ADNOC company has launched an in-country value (ICV) program which is currently in its implementation stage. The program aims to drive optimal value from oil and gas reserves, increasing the ICV contribution and supporting the private sector to support growth and diversification of the UAE economy.

The procurement-led initiative for ADNOC’s suppliers will focus on three key areas; diversification through expenditure on local goods and services; personal development for UAE Nationals in the private sector and localisation of capabilities for critical supply chain functions within the industry. The ICV program offers suppliers new opportunities to conduct business with ADNOC group.

ADNOC’s capital spend over the next five years will generate opportunities for companies to grow alongside ADNOC, as international companies work more closely with SMEs to maximise use of local products, manufacturing, services and infrastructure.

As part of ADNOC’s ICV program, all ADNOC suppliers are required to declare their ICV achievement (ICV Certificate) and their certified ICV score for the previous financial year, demonstrating how they are helping to deliver ICV. Business partnerships with ADNOC include an ICV assessment as part of the tender evaluation and award process.

The evaluation will examine the capabilities of the business within the UAE in areas including; Export of goods manufactured in the UAE; Third party spend (Procurement of goods and Sub-contractors); Local investment; Emiratization of workforce and Expatriate contribution.

Suppliers will be required to complete the Supplier Submission Template and approach one of the ADNOC certification bodies to obtain their ICV certificates. The ICV audit will have to be undertaken by an authorised local audit firm.