Offset Obligations

Burden or Opportunity?

Quincy is proud to be a Registered Service Provider to U.S. defense companies.

Developing Domestic Defence Capabilities

The Kingdom of Saudi Arabia has a long history of defense offset requirements which encourage its national defense initiatives to simultaneously promote technology transfer and develop domestic capabilities. Since the 1960s, defense contractors have been obliged to include offset agreements in their proposals to provide products and services to Saudi Arabia. Since Saudi Arabia's Economic Offset Committee currently requires that 45% of a contract's gross value provides local offset benefits, it is critical to consider how these requirements will be met from a strategic perspective.

“Direct offsets” relate directly to the exported product, in contrast to “indirect obligations”, which deliver societal benefits through indirect programs and partnerships that may not involve the exact product or service contract. The country’s priorities determine the multiplier used to generate offset credits to draw down these obligations. This is a most simple explanation of a complex area. Quincy can help identify or design programs that maximize credit impact, assist in negotiations and support the execution of offset programs.

At the Quincy Group, we work with our clients to not only identify and develop programs to accompany contracts but to also ensure programs attract aggressive offset multipliers in incentivized sectors. The Quincy Group transforms Saudi Arabian offset requirements from obligations into competitive advantages for our clients.