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PIONEER ICV CERTIFICATION CONSULTANTS

As PIONEER ICV certification Consultants, we have set up a specialized sub-service line for ICV to help our clients for acquiring ICV certificates, ICV improvement plans as per ICV guidelines .

In-Country Value (ICV) certification

In November 2017, Abu Dhabi National Oil Company (“ADNOC”) introduced an In-Country Value (ICV) program to improve the GDP of the country by enhancing local supplies of goods and services, encouraging manufacturing facilities to set up in the country. Emiratisation in the private sector in line with UAE vision 2030 is also one of the main objectives to introduce the ICV program.
In years 2019 and 2020, various Government and Semi-Government Entities (Participating Entities) joined hands to broaden the ICV Certification process and launched the Unified ICV program which requires that all their vendors be mandated to calculate and declare their certified ICV score for the financial year, to demonstrate how they are helping to deliver ICV.

NATIONAL ICV CERTIFICATION PROGRAM

In 2021, the ICV program was shifted to the Ministry of Industry and Advanced Technology (MOIAT) with the intention to make this program all-inclusive for Government and Semi-Government departments across the whole UAE. 

Carrying forward the objective of this program to ensure spent of businesses is within the national economy in terms of manufacturing cost as well as spent on local products & services. In addition, encouraging investments in the country, appointing and qualifying citizens and creating quality job opportunities is another major objective of the National ICV Program. Further, to support industry in the UAE and recycling a larger part of purchases and services expenses within the national economy is the foremost objective of this program.
AREAS CONSIDERED FOR ICV CALCULATIONS
  • (a)  Goods Manufactured (only for Suppliers holding Industrial License)
  • (b) Third Party Spend (only for Suppliers holding non-Industrial License)
  • (c) Investment
  • (d) Emiratization
  • (e) Expatriate Contribution
  • (f) Bonus – i) Revenue from outside UAE. ii) Emirati Headcount iii) Investment Growth

WHY HAS THE ICV CERTIFICATION PROGRAM BEEN IMPLEMENTED IN UAE?

An In-Country Value (ICV) program was announced for Abu Dhabi National Oil Company (ADNOC) Group Companies with the following objectives:

  • (a) Emiratization: Creating additional employment opportunities for Emiratis in the private sector
  • (b) GDP Diversification: Supporting UAE GDP diversification by sourcing additional goods and services within the UAE; and
  • (c) Strategic Considerations: localizing strategically critical parts of the value chain for selected categories.

WHO NEEDS ICV CERTIFICATE?

Companies working directly as suppliers or indirectly as sub-supplier with the following Implementing Agencies are required to acquire the ICV certificate. The Implementing Agencies for the National ICV Program are gradually increasing in numbers to ensure observing ICV Program across the country.

  • ADNOC Group Companies
  • Abu Dhabi Department of Economic Development
  • Aldar Properties
  • Abu Dhabi Ports
  • Mubadala
  • Etisalat
  • Emirates Steel
  • TAQA Group
  • Edge
  • Etihad Rail
  • Sharjah Investment and Development Authority (Shurooq)
  • Emirates Nuclear Energy Corporation
  • Emirates Global Aluminium (EGA)
  • Companies submitting tenders through Musanada (Abu Dhabi General Services Company)
Vendors of Implementing Agencies who do not possess the ICV Certificate are allowed to participate in the tenders of Implementing Agencies, however, their ICV score will be considered as “Zero” in the bid evaluation and hence may be at a disadvantage to those holding ICV Certificates.

Basic Information Regarding ICV Certification

Each license of a Company is considered as an independent legal entity even if the ownership is the same. However, if a Company has different branches in the same Emirate with identical activities and ownership listed on the licenses, then one combined ICV certificate is allowed for the Company in that Emirate.

For newly established Companies (less than 10 months old) that do not have audited financial statements, the Management Accounts for a period of up to 9 months can be used for ICV calculations. Any management accounts greater than 9 months will be required to be audited.

For newly established Companies (less than 10 months old) that do not have audited financial statements, the Management Accounts for a period of up to 9 months can be used for ICV calculations. Any management accounts greater than 9 months will be required to be audited.

The ICV certificate shall be valid for a period of 14 months from the date of issuance of Audited Financial Statements. The supplier can get recertified during the validity of the ICV certificate if he chooses to, using the same audited financial statements, but the validity of 14 months from the first issue will remain same.

ICV IMPROVEMENT PLAN

When the term of tender requires, the Supplier shall submit an ICV Improvement Plan along with the commercial bid. 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 score achieved vis-à-vis the ICV score committed as per the ICV Improvement plan.
For monitoring of the ICV score actually achieved vis-à-vis the ICV score planned as per the ICV Improvement plan, the Supplier shall provide the latest ICV certificate upon completion of each Agreement year

A Milestone towards the achievement of planned ICV score for an amount of 5% of the Agreement value shall be included in the Contract and this payment will be released after completion of each year from the commencement date of the Agreement in proportion to the actual ICV score achieved as per the latest ICV certificate.

Types of the improvement plan

  • Company based Improvement Plan

          Based on the overall company’s financial statements.

  • Agreement based Improvement Plan
         Based on cash flows from activities pertaining to relevant contract for which ICV Certificate is required separately. These improvement plans and respective ICV certificates are normally related to particular high-value EPC or construction projects.
ICV Milestone Payment process:
  • Total ICV Fee = 5% of contract amount
  • Annual ICV Fee = Total ICV Fee/Duration of Agreement (Years)
  • Annual ICV entitlement = Annual ICV Fee × (Actual ICV Growth/Planned ICV Growth) 
  • Supplier to submit separate invoice at the end of each Agreement Year to claim Annual ICV entitlement. If the Supplier meets the target in any subsequent year, the unpaid amount in previous years shall be released.
     

     

WHAT WE OFFER AS LEADING ICV CONSULTANTS

We offer the following services:

  • ICV CERTIFICATION
  • ICV CONSULTANCY
  • ICV IMPROVEMENT PLAN
  • ICV PROGRAM IMPLEMENTATION

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