GCC Action Before Tender Builds Local Resilience

How the GCC can use mega projects to build local supplier ecosystems and increase resilience

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Article | May 2026 |

Introduction

Through 2035, the GCC has a pipeline of more than $2 trillion in mega projects—defined as those greater than $250 million—across transportation, oil and gas, utilities, and real estate.¹ The next decade offers a golden opportunity to supercharge the development and maturity of the region’s supplier ecosystem and substantially increase the share of local content (spending captured by local goods, services, and workforce) in capital projects.

This focus on local content matters even more in light of recent regional events, which have exposed how quickly supply chains can turn from an efficiency advantage into a strategic vulnerability. The World Bank finds the current Middle East conflict is already affecting commodity prices and logistics, while disruptions to shipping routes are raising costs and heightening supply risks in energy and other critical inputs. A more developed supplier base can help the GCC weather supply chain disruptions now and into the future.

Devising effective interventions requires an understanding of the different phases of capital projects and where the value lies. For example, in real estate, the initial planning phase consists of four sequential steps: a master plan that defines a vision for what will be built, a concept or design brief, a schematic that determines the specifications and quantities, and detailed design to finalize drawings and specifications. A project moves to tender on an already fixed scope before proceeding to engineering and construction.

Today, most GCC local content guidelines concentrate on the tender stage, which is often too late in the process to be effective. Consider that roughly 60 to 70% of project spending is largely frozen after master plan and concept, when design and specifications are defined.² By then, projects are already locking in materials, technical standards, and pre-tender bills of quantity for items from façade systems and floor finishes to HVAC equipment. The result is a continued reliance on international sources to the detriment of local ecosystems.

If the GCC wants the project pipeline to support the expansion of more domestic capability and reduce future exposure to supply chain risks, it must take concerted action before the tender phase.

Over the next decade, we estimate that about $1.5 trillion in GCC mega projects will be in the planning phase.³ Time is of the essence to bolster the development of local suppliers.

The good news: When managed effectively, the procurement process for capital projects can significantly shift more spending to local content. As the GCC plots its path forward, leaders can draw inspiration from successful policy interventions in other countries.

In the United Kingdom’s £60 billion HS2 rail program, for example, the government directed the owner to embed local employment standards during project planning and engage with suppliers and set consistent local content requirements for all contractors.⁴ By signaling future demand volume and timing early, the owner gave local suppliers ample notice to prepare and invest, helping to avoid last-minute imports. These actions created more than 30,000 jobs and supported approximately 2,000 apprenticeships.⁵

British Columbia’s Wood First Act aimed to embed material choices into design. The act prioritized local wood and timber as the primary material in provincially funded buildings in British Columbia. These updated building design standards supported the expansion of BC-based mass timber production facilities over the past 15 years.⁶

Similarly, Malaysia’s Industrialized Building System (IBS) introduced minimum local content targets during concept and design, backed by approved systems, supplier directories, and tightly defined exemptions. These interventions in the early phases helped 85% of public building projects meet IBS targets by 2021 and more than 90% of affordable housing by 2023. As of 2025, more than 300 certified domestic suppliers are registered in the Construction Industry Development Board.⁷

The lesson across these cases is consistent: when governments take steps to shape demand in the planning phase, suppliers have more time to respond and prepare.

So what moves should stakeholders be making to bolster their local supplier ecosystems? The GCC’s agenda should address three levels.

At the center of government, local content in project planning should be framed as part of the national resilience agenda, with clear direction and mandates from the top.

Local content regulators should extend existing programs beyond tender into the planning phase and implement the enablers that make early localization credible: supplier databases, harmonized classifications, market signaling, and local design guidance.

National champions, meanwhile, should pilot the approach across their own project life cycles, particularly in strategic sectors such as real estate, so targets are tested against real delivery conditions.

Conclusion

If the GCC gets this sequence right, it will do more than increase the local content in mega projects. It will lay the groundwork for a stronger supplier ecosystem that is better prepared for the next disruption.