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 had approved the following proposals submitted by Prime Minister as the Minister of Finance, Economic and Policy Development to allow local companies and entities with 51% Sri Lankan ownership to get preferential treatment when bidding for Government tenders. Industries that the new regulatory changes will support include: Software companies, furniture manufacturers, construction and hardware.

Accordingly, under this proposal;

i) Procurement of office furniture will only be from companies that have at least 50% domestic value addition. 

ii) All software should be procured from local firms, and if it is not possible, approval has to be received from  Sri Lanka Information and Communication Technology Agency (ICTA).

iii) Hardware supplies for which specifications has to be developed by the ICTA, will get a 30% preference if domestic value addition in 25% or more.

iv)  Under the new proposals, it has also been decided that all constructions, including houses, highways, and irrigation, water supply and sewage systems should be given to local contractors. The value of the contracts, if given as sub-contracts to foreign contractors, should not exceed 10% from the contract value without temporary funds.

The Finance Ministry will work to issue the amended procurement guidelines in consultations with the National Procurement Commission.