iktva

The in-Kingdom Total Value Add Program

Our In-Kingdom Total Value Add (iktva) program is designed to drive supply-chain efficiency and value across our operations, and to encourage the development of a diverse, sustainable, and globally competitive energy sector in the Kingdom.

Through iktva we are building a world class supply chain to support our needs and the needs of our partners. The goal of the program is to increase the amount of goods and services procured in the Kingdom to 70 percent by 2021.

As well as driving domestic value creation, iktva prioritizes consistency and transparency to create a level playing field for more than 1000 suppliers we are engaged with across our local and international network.

How to participate

Chapter 1

iktva participation is essentially a two step process:

iktva baseline: using the iktva survey completed by you, we measure and identify your company’s current iktva score.

Action plan: once the baseline has been identified, your company and Saudi Aramco can work together to develop a 5-year iktva action plan to improve your iktva ratio.

The iktva process: what do you need to do to participate in iktva?

complete the iktva survey
read the guidelines and complete the survey available in our resources area below to determine your iktva baseline ratio
survey certification
get your completed survey certified by one of our listed audit firms
submit for review
submit your certified survey documents to us for review
develop your action plan
once certified you can use your iktva scoring as a starting point to develop your 5-year action plan, using the guides provided in the resources section below.

Identifying your baseline

Chapter 2

To identify your iktva baseline:   

 
  • Download the iktva package that includes the iktva survey and other supporting documents.
  • Complete the survey and get it certified by one of the approved audit firms.
  • Once your survey is certified by the audit firm, submit all certified documents via the iktva contact below.

You may send us a copy of the survey while it is being reviewed by the auditors for our initial review.

When submitting your survey please provide the following details:

  1. Name
  2. Email
  3. Phone number
  4. Company name
  5. Attachment 1: PDF of full Audit Report
  6. Attachment 2: Excel version of Survey
  7. Message: include any additional information you would like to include.

Developing an iktva action plan

Chapter 3

Once you have a certified iktva, you can use your current iktva score as a starting point for your 5-year iktva action plan.

Utilizing the available guide, you will find that you have collected a tremendous amount of valuable data. You must take this information and present it in a way that tells a detailed story of how you plan to achieve the desired goals set forth in the iktva program.

5-Year IKTVA Planning Format Guide 2018

5-Year IKTVA Plan form

 

FAQs

Chapter 4

Q1: What is iktva program?

The In Kingdom Total Value Add (iktva) program is designed to drive domestic value creation and maximize long-term economic growth and diversification to support a rapidly changing economic environment.

Q2: What is the objective of the iktva program?

iktva recognizes prioritization of domestic value creation. It is designed to drive increased investment, economic diversification, job creation, and workforce development within the Kingdom. By 2021, at Saudi Aramco we aim to achieve 70% localization of all spending, creating a business environment that will provide thousands of new jobs, and enable 30% export of Saudi energy sector products.

Q3: What does iktva mean to existing and potential new suppliers?

As well as enabling a sustainable Saudi energy sector, iktva provides a level playing field for suppliers through consistency and transparency in application and process. Uniform evaluations for both service and material suppliers will be consistent across the company, creating supplier-focused partnerships, and investment stability and assurance achieved through annual assessments.

Q4: How does the iktva program work?

The program will first establish an iktva baseline score for each supplier measured against key metrics for local value creation. With the supplier, we will then jointly develop an action plan to increase the iktva score. Thirdly, we will measure performance and track progress to ensure the relationship results in continued local value creation.

Q5: Who will benefit from iktva?

The benefits of a strong and sustainable economy are widespread and long-term – quality jobs for a growing Saudi population, innovation and diversification of industry, and improved global competitiveness through increased exports.

In addition to the direct benefits of our investment in their goods and services, suppliers will gain access to a growing, higher skilled Saudi workforce and will be recognized as prioritizing value creation which can lead to increased opportunity for expansion into markets across the Kingdom, the GCC region, and the world.

Q6: What are the parameters to measure iktva? And how is it calculated?

A. Localized goods and services
B. Salaries paid to Saudis
C. Training and development of Saudis
D. Supplier development spending
r. Research & Development X. Export Revenue Factor (%)
E. Company revenue

%IKTVA=[(A+B+C+D+r)/E]+X

Q7: How was the consultation process conducted for iktva?

We understand that achieving our objective of 70% localization of all spending by 2021 requires collaboration, commitment and trust. An extensive consultation program was conducted which included representatives of the major supplier sectors to develop and refine iktva.

Additionally, a successful pilot phase engaged more than 100 companies across sectors in Kingdom and internationally to ensure we created a level playing field for all our existing and future suppliers.

Q8: When is this program taking effect?

The iktva program was launched on an event on December 1, 2015

Q9: Do you need to comply with iktva to do business with Saudi Aramco?

A bedrock of our strategy at Saudi Aramco is to drive domestic value creation in every aspect of our business. iktva reorients the dynamics of our business partnerships with more than 1000 existing suppliers to this effect, and we will work collaboratively with all suppliers that chose to participate, to develop action plans and ensure our relationships are mutually beneficial and focused on domestic value creation.

Q10: How would iktva affect your existing business with Saudi Aramco?

The dynamic has necessarily changed with a value proposition focused on the future. We have historically awarded contracts on the basis of technical compliance and lowest cost. Moving forward, participation in iktva will be one of the components used to evaluate any supplier proposal.

Q11: Who is iktva applicable to? (E.g. suppliers, manufacturers, service providers)

All suppliers who we are engaged with – suppliers, manufacturers and service providers – will be encouraged to participate in the iktva program.

Q12: Does iktva apply to both local and international businesses?

iktva will be a component in the evaluation for all awarded contracts and agreements – local and international. It does not discriminate in any way between in-Kingdom and out-of-Kingdom suppliers.

Q13: How can iktva benefit your business?

iktva recognizes prioritization of value creation. Increasing the iktva score has the potential to increase business with us at Saudi Aramco, others in Saudi Arabia, and the GCC region. It drives toward developing a local cost-effective workforce, making goods and services more competitive locally, regionally and globally.

This program has the potential to help companies develop new products, services and technologies through partnerships in and outside of the Kingdom. All of which will lead to greater business performance and a more diversified economy.

Resources

Chapter 5

iktva package

2017 IKTVA Survey (First-Time filers)
The official spreadsheet that the suppliers are requested to complete and submit to Saudi Aramco. This worksheet is to be used by companies that have not submitted an iktva survey before.

2017 IKTVA Survey (Repeat filers)
The official spreadsheet that the suppliers are requested to complete and submit to Saudi Aramco. Based on the input, the form calculates the suppliers’ iktva ratio.

2017 Survey guide
The iktva guidelines are an informative and instructive document designed to support suppliers in completing the self-reporting requirement across the major information categories used to calculate an iktva ratio.

Steps to Complete 2017 IKTVA Survey
This presentation Illustrates steps on how to complete the iktva Survey for 2017.

2017 iktva Workshop Presentation
The presentation gives an overview about iktva program, and iktva in procurement.

Approved iktva auditors

Guidelines

Doing Business with Saudi Aramco

Engineering Requirements for Technical and Quality Approval
This Engineering Requirements for Technical and Quality Approval (ERTQA) handbook has been developed to provide clear approval guidelines for new and existing local manufacturers of engineering commodities.

5-Year IKTVA Planning Format Guide 2018
Describes the methodology of developing the 5-Year iktva plan.

5-Year IKTVA Plan form
Document that needs to be completed and submitted.

Brochure
This document provides a snapshot of iktva the program: what it is, it’s objectives and what it means to us at Saudi Aramco, you as our partners and suppliers, and the Kingdom of Saudi Arabia.