Tawteen: Building a Resilient and Competitive Energy

Tawteen: Building a Resilient

and Competitive Energy Sector

in QatarICV AWARENESS SESSION

DECEMBER 2019

2

Agenda

ICV Overview

ICV Procurement Integration

ICV Governance

ICV Tools and Templates

Next Steps

ICV Scorecard template walkthrough

Questions

3

Tawteen program – at a glance

Building a resilient and competitive Energy sector in Qatar

Initiative aimed at promoting

collaborative relationships between

suppliers and Energy companies to

share information, improve business

processes, and technical/ business

development support.

Local Supplier Development

C

ICV sets forth the rules and

requirements of in-country value into

the procurement ways of working

and has an impact on the end-to-

end supply chain

In-Country Value (ICV)

B

~100 investment opportunities

across the Energy sector which

serves to drive the localization

agenda for Tawteen

Investment Opportunities

A

In addition, QP and Energy Companies are changing their internal processes (e.g., procurement, finance, legal,

IT), terms and conditions, and consolidating spend to enable Tawteen localization

TAWTEEN LOCALIZATION PROGRAM1

1Energy companies implementing ICV: QP, Shell, TOTAL, NOC, Qatargas, Dolphin Energy, Qatar Steel, QAFAC, QAFCO, QAPCO, QChem, QEWC, Qatalum, Oryx GTL

4

Tawteen objectives

Tawteen Objectives

Maximize the sustainable

ICV

Increase in country

knowledge transfer

Upskill local talent

Develop local suppliers

Targeted Achievements

Additional value added in-

country (~+1.6% GDP

growth)

~QAR

8 – 9bn

Localization market

opportunities identified

~100

International companies

localized

10

White collar jobs created5,000+

Increase ICV

from

16% to 41%

5

What is In-Country Value (ICV)?

Way of working,

not just a formula

Contribute to

sustainable

economic growth for

the Energy sector

Key strategic

focus area

Mechanism to

promote GDP

diversification

Enable the

development of

local suppliers

Support Qatar in

becoming globally

competitive

6

The Tawteen ICV framework is a top-down framework from ICV strategy to certification

ICV Certification and reporting

ICV procurement requirements

Governance and rules of ICV

ICV formula and calculation

Objectives of ICV

ICV execution toolkit

ICV formula& calculationmechanism

Strategic

objectives

ICV policy &

governance model

ICV integration

methodology

ICV monitoring

& reporting

ICV tools &

templates

7

Tawteen ICV strategic objectives

Maximize the sustainable in-country value creation from the

sourcing of goods and services

Upskill and develop local talent and suppliers

Promote in-country private investment

8

Tawteen ICV formula and calculation methodology

A

𝑨 + 𝑩 + 𝑪 + 𝑫

𝑹

ICV formulaB

Training of

WorkforceCost of training offered to Qatari

nationals and residents

CSupplier

DevelopmentCost of supplier training and

certification programs

DInvestments in

Fixed AssetDepreciation and amortization of

company assets in Qatar

RTotal Revenue

in QatarTotal revenue value in Qatar

ServicesCost of local services, and manpower

compensation

Cost of local tangible goods and

materialsGoods

Maximize the

sustainable in-country

value creation

Upskill and develop

local talent and

suppliers

Promote in-country

private investment

2

3

1

9

ICV penetrates deep into the supply chain

Tier 1 supplier

Supplier 1

ICV%

Supplier 1 Supplier 2 Supplier 3

Supplier 2

ICV%

Supplier 1 Supplier 2 Supplier 3

Contractor 3

ICV%

Sub-

contractor 1

Sub-

contractor 2

Tier 2

Tier 3

Tier 1 supplier ICV%

depends upon its

tier 2 suppliers’ ICV

scores and it’s

internal costs

Tier 2 suppliers’ ICV

scores depends

upon their suppliers

(tier 3), and so forth

ICV%

ICV% ICV% ICV% ICV% ICV% ICV% ICV% ICV%

Internal costs

Applies for

component

A: goods

and services

Includes everything in the ICV formula

except component A: goods and

services

10

Example of subcontractor ICV calculation

Spend on Goods /

Services

(QAR Mn)

ICV

(QAR Mn)

Subcontract 1 1,400 980

Subcontract 2 596 298

Subcontract 3 396 -

Subcontract 4 153 31

2,554 1,309

Subcontractor

ICV

Subcontractors

× =

× =

× =

× =20%

Not

Available

50%

70%

11

Agenda

ICV Overview


ICV Governance


Next Steps


Questions

12

• Certified by pre-approved ICV Certifier

• Based on latest 12-month audited financial

statements

• Renewed annually, at a minimum

• Certified by pre-approved ICV Certifier at end of the contract

• Based on ICV forecast for contract duration

• Submitted per contract

• Applicable for selected contracts

𝑨 +𝑩 + 𝑪 +𝑫

𝑹

ICV formula

ICV

ScorecardICV Plan

How much WAS spent on ICV last fiscal year? How much WILL be spent on ICV per contract?

𝑨 + 𝑩+ 𝑪 +𝑫

𝑪𝒐𝒏𝒕𝒓𝒂𝒄𝒕 𝑽𝒂𝒍𝒖𝒆

ICV formula

Key inputs in the procurement process

13

• Monitor the ICV Plan

throughout the contract

duration

xxxxxxxxxxxxxx

• Get the ICV Plan

certified at the end of

the contract using an

ICV Certifier

• Include ICV ITTs

(Instructions to

Tenderers) in the tender

documentation

• Provide a certified ICV

Scorecard or an ICV

Plan along with the bids

• Use the ICV Scorecard

or ICV Plan score (%)

as a parameter in

commercial evaluation

ICV in the procurement process

Monitoring scheme

ICV Inputs

Tender submission1Technical

evaluation2

Commercial

evaluation3

Contract

execution4

ICV Scorecard ICV Plan

Energy

Companies

Suppliers

𝐀 + 𝐁 + 𝐂 + 𝐃

𝐑

ICV formula

14

Establishes background and context of the

Tawteen ICV framework

Defines ICV requirements in the procurement

process

Outlines the ICV audit and certification

requirements

Establishes the Tawteen ICV governance and

reporting scheme

Tawteen ICV policy

Non-exhaustive

15

Agenda

ICV Overview


ICV Governance


Next Steps


Questions

16

Tawteen ICV governance of audit and certification

Tawteen SteerCoOversee the ICV Certification and audit processes, and resolve escalated disputes across the energy sector

TAWTEEN VISION

Energy

companies

Receive ICV

Certificates

and leverage

the certified

ICV scores in

the

procurement

process

ICV CertifiersCertify ICV Scorecards and Plans and provide ICV Certificates to suppliers

SuppliersComplete ICV Scorecards and Plans and provide supporting documentation to ICV Certifiers

Tawteen team

ICV OperationsManage day-to-day ICV operational activities

ICV AuditConduct audits on the ICV Certifiers

17

Who is involved in ICV Certification and what are the roles and responsibilities?

Tawteen

• Oversee the ICV program

• Provide guidance and resolve disputes

• Audit the ICV Certification process

• Facilitate the ICV Certifiers panel bi-weekly meetings

ICV Certifiers

• Perform test procedures according to ICV AUPs

• Issue Factual Findings Reports

• Attend the ICV Certifiers panel bi-weekly meeting

• Provide access to Tawteen to review working papers relevant

to sample ICV Certifications issued during the review period

Suppliers

• Complete the ICV Scorecard and/ or ICV Plan Submission

Template and submit it to one of the ICV Certifiers

• Submit the ICV Certificate to the Energy Companies as part of

the bid package (for ICV Scorecard) or at the end of the

contract (for ICV Plan)

Appointment Letter

Engagement Letter

18

Understanding the different ICV Certification tools, templates, and documents

Engagement letter

Agreed-Upon Procedures

(AUPs)

Request for Information

(RFI) List

Factual Finding Report

Scorecard Certificate

• Document that defines the relationship between the ICV Certifier and the Supplier, and

the conditions in which the ICV Certification services will be provided

• Includes clauses to give Tawteen access to supplier information maintained by the ICV

Certifier

• List of information required by the ICV Certifier to complete the testing of the

information provided in the ICV Submission template

• Format of report issued by the ICV Certifier to the supplier as a result of the completion

of the ICV Certification process

• Format of template issued by the ICV Certifier that contains the ICV score

demonstrating the suppliers’ contribution to ICV

• Testing procedures that ICV Certifier should perform when testing the information

provided in the ICV Submission template

19

ICV Certification process

ActivityDownload and fill

the ICV template

Perform testing

procedures on

the filled ICV

template

Fill, sign and

stamp the ICV

Certificate and

send it to the ICV

Certifier

Sign, stamp and

issue the Factual

Finding Report to

the Supplier and

Tawteen

Select ICV

Certifier

1 32 4 5

Owner Supplier ICV Certifier Supplier ICV CertifierSupplier

Supporting

tools and

templates

1. Engagement

Letter

1. ICV

Scorecard/Plan

Submission

Template

2. ICV

Scorecard/Plan

Submission

Guidelines

1. Filled ICV

Scorecard/Plan

Submission

Template

2. RFI List

3. AUPs

1. ICV Certificate 1. Final ICV

Certificate

2. Factual Finding

Report

20

Agenda

ICV Overview


ICV Governance


Next Steps


Questions

21

ICV tools and templates

Icon Name Description

ICV Scorecard

submission template

Excel worksheet used to capture supplier ICV related data in relation to the ICV

formula components

ICV Scorecard

guidelines

Guidelines to provide information and instructions for suppliers to help them in filling

and completing the ICV Scorecard template

ICV Plan submission

template

Excel worksheet which will be used by suppliers to submit their planned ICV

contribution throughout the contract duration. It will be the basis to capture ICV

planned data against ICV actual data and identify any differences

ICV Plan guidelinesGuidelines to provide information and instructions for suppliers to help them in filling

and completing the ICV Plan template

22

ICV toolkit is available on the Tawteen website

Provides context on Tawteen

ICV programExplains ICV requirements

in the procurement process

Defines the Tawteen ICV formula

Tools and guidelines for ICV

data collection Explains the ICV Certification

process

www tawteen.com.qa

23

Contact Us

For general inquiries

about Tawteen and ICV

For specific ICV certification

inquiries

Dr Sultan Hassan Al Dosari

Auditing and Advisory (Member Firm of Grant Thornton

International Ltd)

Support services for suppliers:

Answer ICV-related questions

Resolve ICV-related issues

Connect to Tawteen team

Provide ICV content

Gather feedback from suppliers

Tawteen Service Center:

Qatar Navigation

Center Tower,

Annex Building,

6th Floor, Doha,

Qatar

[email protected]

www tawteen.com.qa

+974 4013 6477

24

Agenda

ICV Overview


ICV Governance


Next Steps


Questions

25

ICV go-live strategy

Grace Period

JUNFEB

Hard Launch

JAN MAR APR MAY JUL AUG

Hard Launch

Grace period ends

start of July 2020

Soft Launch

Grace period begins

January 2020

26

Immediate next steps

Identify a sponsor in your organization to oversee and drive the ICV certification process

Begin familiarizing yourselves with the Tawteen ICV Program (details on website)

Engage with your preferred ICV Certifier

Commence efforts in completing the ICV Scorecard template

Ensure quick and swift mobilization of resources to ensure deadlines are met

1

2

3

4

5

27

Agenda

ICV Overview


ICV Governance


Next Steps


Questions

28


29

Agenda

ICV Overview


ICV Governance


Next Steps


Questions

30

Any questions?

Documents

Tawteen: Building a Resilient and Competitive Energy