THE REGULATION OF THE MINISTER OF INDUSTRY ON TECHNICAL GUIDELINES ON THE UTILIZATION OF DOMESTIC PRODUCTION
Referred to in this regulation as
(1) Procurement of goods/service by ministries, nonministerial government institutions, provincial governments, regental/municipal governments, state owned statutory bodies (BHMN), contractors of joint cooperation contracts (KKKS), state-owned enterprises (BUMN), regional administration-owned enterprises (BUMD) and subsidiaries financed by domestic fund or realized by a model of cooperation between the government and business entities shall maximize the use of domestic production.
(2) The obligation to maximize the use of domestic production as meant in paragraph (1) shall become compulsory to use domestic production if companies having goods/services with the sum of TKDN and value of BMP reaching 40% (forty percent) at the minimum have existed in the country.
(3) If the companies having goods/services with the sum of TKDN and value of BMP reaching 40% (forty percent) at the minimum have existed in the country as meant in paragraph (2), the procurement of goods/ services only can be followed by domestic companies producing goods/services.
(4) The domestic companies producing goods/services as meant in paragraph (3) shall be given a price preference in accordance with the respective achieved TKDN, without including the value of BMP.
(5) Unless the companies having goods/services with the sum of TKDN and value of BMP reaching 40% (forty percent) at the minimum as meant in paragraph (2) have existed in the country, realization of procurement of goods/services can be followed by suppliers of goods/providers of services with price preference given to the respective companies in accordance with the achieved TKDN of domestic production without counting the value of BMO.
(6) The price preference as meant in paragraphs (4) and (5) shall only be granted to companies producing goods/services in the country with TKDN higher or the same as 25% (twenty five percent).
(7) The amount of the price preference granted to the respective companies as meant in paragraph (4) and (5) shall be as follows:
(1) The sum of TKDN and value of BMP minimally 40% (forty percent) as meant in Article 2 paragraph (2) shall be the sum of the value of domestic components of goods or services or combination of goods and services and the value of BMP.
(2) The value of BMP as meant in paragraph (1) shall be set 15% (fifteen percent) at maximum and counted on the basis of the scoring of economic benefit contributed by companies to national economy.
(3) The value of BMP as meant in paragraph (2) shall be counted on the basis of score in the empowerment of small-scale businesses, including small-scale cooperatives through partnership, preservation of occupational safety and health and environment (OHSA 18000/IS0 14000), community development as well as facilities of after-sales service.
(4) Calculation of determination of value of BMP as meant in paragraph (3) and the format shall be as contained in Attachment I to this regulation.
(1) Procurement-of goods/servlces by ministries, nonministerial government institutions, provincial governments, regental/muncipal government, stateowned statutory bodies (BHMN), state-owned enterprises (BUMN), regional administration-owned enterprises (BUMD) and subsidiaries financed by foreign loans/grants shall involve national suppliers of goods( providers of services and give price preference to companies supplying goods/providing services.
(2) The price preference as meant in paragraph (1) shall be granted proportionally in accordance with the achieved TKDN of goods/services owned by the companies.
(3) The amount of price preference granted to the respective companies as meant in paragraph (2) shall be as follows:
(1) The Domestic Component Level of goods shall be counted on the basis of ratio of the price of goods subtracted by foreign components to the price of goods.
(2) The price of goods as meant in paragraph (1) shall be the production cost spent for producing the goods.
(3) The production cost as meant in paragraph (2) shall include the cost of direct goods (materials), manpower and indirect cost of factory.
(4) The format of calculation of TKDN of goods belonging to a company and example of components of costs in the calculation shall be as contained in Attachments II and III to this regulation.
(1) The domestic component level of services shall be counted on the basis of ratio of the total price of services subtracted by the price of imported services to the total price of services.
(2) The total price of services as meant in paragraph (2) shall be a cost spent for producing services.
(3) The spent cost as meant in paragraph (2) shall cover the cost of project management and engineering, working tools/facilities, construction and fabrication as well as general services, excluding corporate profit and overhead.
(4) The format of calculation of TKDN of services belonging to a service provider and example of components of costs in the calculation shall be as contained in Attachments IV and V to this regulation.
(1) The domestic component level of combination of goods and services shall be counted on the basis of the ratio of the total price of domestic components plus the total price of domestic services to the total price of goods and services.
(2) The total price as meant in paragraph (1) shall be the total cost spent for producing domestic goods or services or the total cost spent for producing goods and services.
(3) The spent cost as meant in paragraph (2) shall cover costs of direct goods (materials), equipment, project management and engineering, working tools/facilities, construction and fabrication as well as general services.
(4) The format of calculation of TKDN of combination of goods and services as well as example of components of costs in the calculation shall be as contained in Attachments VI and VII to this regulation.
(1) Suppliers of goods shall calculate and undertake self assessment assessment of the achieved TKDN of goods that they produce.
(2) The achieved TKDN as meant in paragraph (1) shall be counted on the basis of every kind of goods produced by the same raw material and production process.
(3) The self-assessment of the achieved TKDN as meant in paragraph (1) shall be based on accountable data coming from both:
(4) In the case of suppliers of goods No.holding proper accountability for the supporting data in stipulating the achieved TKDN on the basis of self assessment as meant in paragraph (1), the components submitted in the self assessment shall be stipulated as imported components.
(5) The achieved TKDN resulting from the self-assessment as meant in paragraph (1) can be conveyed to the Ministry of Industry for verification and the result shall be mentioned in the list of inventory of domestically produced goods/services.
(6) The list of inventory of goods/services as meant in paragraph (5) shall become reference to suppliers of goods/providers of services in the realization of tender.
(7) Procedures for self assessment of the achieved TKDN and conveyance to the Ministry of Industry as meant in paragraphs (1) and (5) shall be further regulated by the Secretary General of the Ministry of Industry.
(1) Upon participating in tender, suppliers of goods/providers of services shall mention the achieved TKDN of goods/services or the achieved TKDN of combination of goods and services offered in bid document by means of self calculation and self assessment.
(2) The self assessment of the achieved TKDN of goods/ services or TKDN of combination of goods and services as meant in paragraph (1) shall be executed in every tender/contract.
(3) The achieved TKDN of goods/services or TKDN of combination of goods and services as meant in paragraph (2) shall only apply to every tender/contract.
(4) The self assessment of the achieved TKDN as meant in paragraph (2) shall be realized on the basis of accountable data coming from both:
(5) In the case of suppliers of goods/providers of services No.holding proper accountability for the supporting data in stipulating the achieved TKDN on the basis of self assessment as meant in paragraph (1), the components submitted in the self assessment shall be stipulated as imported components.
(6) The achieved TKDN of goods referred from the list of inventory of domestically produced goods/services as meant in Article 8 paragraph (5) by suppliers of goods/providers of services can become the basis for granting price preference.
(7) If necessary, the Committee for Procurement of Goods/Services can clarify the truth of the achieved TKDN mentioned in the list of inventory as meant in Article 8 paragraph (5) to the Ministry of Industry with the result being used as the basis for granting price preference.
(1) The Ministry of Industry or users of goods/services as meant in Article 8 paragraphs (5) and (6) can verify the truth of the achieved TKDN certified on the basis of self-assessment by suppliers of goods/ providers of services.
(2) In executing verification, the Ministry of Industry or suppliers of goods/providers of services can use competent independent survey institutions owned by the government and appointed by the Minister of Industry.
(3) Costs arising from the realization of verification can be charged with parties asking verification, unless otherwise stipulated in tender document.
The list of inventory of domestically produced goods/services issued by the Ministry of Industry shall be renewed at the beginning of every year and evaluated periodically in No.later than every two years.
The list of inventory of domestically produced goods/services as meant in Article 8 paragraph (2) shall be conveyed or disseminated by the Ministry of Industry to users of goods/services and suppliers of goods/ providers of services or parties related to procurement of government goods/services or other needy parties.
(1) The granting of the price preference as meant in Article 2 paragraph (7) and Article 4 paragraph (3) shall No.change the bid price and only be used by the Committee for Procurement of Goods/Services for the need of calculation of Final Evaluation Price (HEA).
(2) Example of calculation of HEA by including the elements of TKDN and price preference as meant in paragraph (1) shall be as contained in Attachment VIII to this regulation.
(3) If two bids or more have the same Final Evaluation Price (HEA), the winner shall be awarded to the bidder having the largest achieved TKDN.
In the procurement of goods/services by ministries, nonministerial government institutions, provincial governments, regental/municipal governments, state-owned statutory bodies (BHMN), contractors of joint cooperation contracts (KKKS), state-owned enterprises (BUMN), regional administration-owned enterprises (BUMD) and subsidiaries financed by domestic fund or realized by a model of cooperation between the government and business entities, requirements for the use of domestic production, starting from the planning to the realization, by referring to the List of Inventory of Domestically Produced Goods/services shall be mentioned.
(1) In order to optimize the use of domestic production in the procurement of goodsJservices by the respective ministries, non-ministerial government institutions, provincial governments, regental/municipal governments, state-owned statutory bodies (BHMN), contractors of joint cooperation contracts (KKKS), state-owned enterprises (BUMN) regional administration-owned enterprises (BUMD) and subsidiaries financed by domestic fund.or realized by a model of cooperation between the government and business entities, a team assigned to coordinate, supervise and evaluate the realization of guidelines on the use of domestic production shall be established in the respective institutions.
(2) The team as meant in paragraph (1) can monitor and witness the production and the use of domestic production.
(3) The team as meant in paragraph (1) shall report results of the execution of the tasks as meant in paragraphs (1) and (2) to the respective ministers/leaders of institutions with a copy made available to the Minister of Industry.
Leaders of ministries, non-ministerial government institutions, provincial governments, regental/municipal governments, state-owned statutory bodies (BHMN), contractors of joint cooperation contracts (KKKS), state-owned enterprises (BUMN), regional administration-owned enterprises (BUMD) and subsidiaries procuring goods/services financed by domestic fund or realized by a model of cooperation between the government and business entities can require TKDN tighter than the provisions in Articles 2 and 4 as long as it does No.contravene this regulation.
Suppliers of goods/providers of services violating the provisions in this regulation shall be subjected to the following sanctions:
1. Administrative sanction
The Administrative sanction shall be imposed on the suppliers of goods/providers of services in the form of written warning and if suppliers of goods/providers of services are proven to falsify intentionally data about domestic components, the relevant is subjected to sanction, among others, the inclusion into the black list;
2. Financial sanction
Users of goods/services violating the provisions in this regulation shall be subjected to sanctions in accordance with legislation in force.
Technical operational matters No.yet regulated in this regulation shall be further regulated by the Secretary General of the Ministry of Industry.
The Lists of Inventory of Domestically Produced Goods/Services already existing, issued by both the Ministry of Industry or other related institutions shall remain effective as long as they do No.contravene this regulation.
The regulation shall come into force 3 (three) months as from the date of stipulation.
For public cognizance, the regulation shall be announced by placing it in State Gazette of the Republic of Indonesia.
Stipulated in Jakarta
On March 14, 2006
THE MINISTER OF INDUSTRY
(signed)
FAHMI IDRIS