Guyanese companies in the oil sector just got a major boost. A new policy now requires that companies evaluating bids give more weight to local content, increasing it from 5% to 10%. Companies with a Local Content Certificate will get a bigger score advantage when competing for contracts.
A Local Content Certificate is given to companies that meet specific requirements set by Guyana’s Local Content Act. These include having 51% of the company owned by Guyanese citizens and meeting quotas for Guyanese management and staff. Over 800 companies already have this certificate and stand to benefit from the new policy.
Previously, the local content category only comprised 5% of the total score in bid evaluations. Now, it has doubled to 10%. This gives Guyanese companies a better chance to win contracts by emphasizing local involvement.
Foreign companies can also gain an edge by partnering with Guyanese firms. These joint ventures help them meet the local content requirements while contributing to the development of Guyanese companies.
Director of the Local Content Secretariat, Dr. Martin Pertab said at the Local Content Summit in April that the Secretariat was considering the policy change. It is now reflected in the June 10 guidelines issued to companies in the sector.Â
The government also plans to make sure Guyanese companies get paid faster. There is a 45-day payment period, but the government thinks this is too long and wants to shorten it. Additionally, there may be new categories of services added to the Local Content Act. This means that companies will be required to allocate a portion of their spend to be awarded to Guyanese companies when procuring goods and services in the specified sectors.
Recent Exxon data shows that spend by the company and its contractors has increased by an average of 80% annually in the 2017-2023 period.
