Designing An Integrated Local Content Commodity Catalog and Monitoring Mechanism for Procurement at PT Bumi Energi

+ INKUBIS: Jurnal Ekonomi dan Bisnis Volume 8, Issue 1, 324-340 e_ISSN: 2775-3913 https://inkubis.polteksci.ac.id/index.php/ink/index DOI: doi.org/10.59261/inkubis.v8i1.154 Designing An Integrated Local Content Commodity Catalog and Monitoring Mechanism for Procurement at PT Bumi Energi Ade Febriyani1* Yuanita Handayati2 Institut Teknologi Bandung, Indonesia Institut Teknologi Bandung, Indonesia Corresponding author: Ade Febriyani, Institut Teknologi Bandung, Indonesia 🖂email: Article Info : Article history: Received: February 26, 2026 Revised: March 16, 2026 Accepted: March 18, 2026 Abstract Background: The Domestic Component Level Policy (TKDN) is a strategic instrument of the government in encouraging national industrial independence through procurement mechanisms, especially in State-Owned Enterprises (SOEs). PT Bumi Energi as a national energy company is required to integrate TKDN in every procurement process. However, its implementation still faces challenges, especially at the stage of analyzing the minimum value of TKDN and monitoring post-contract realization. Keywords: Objective: This study aims to analyze the influence of the weaknesses of local content; procurement; TKDN monitoring on the effectiveness of the procurement process at PT implementation; benchmarking; oil Bumi Energi and formulate a strategy to improve it. and gas. Methods: The research method uses a qualitative approach with a case study design. Data was collected through semi-structured interviews, participatory observations, internal document review, and benchmarking with oil and gas sector companies that have more mature TKDN practices. The analysis was carried out using thematic analysis and gap analysis to compare existing conditions with ideal conditions based on regulations and best practices. Results: The results show that the weakness of verification standards, reliance on vendor self-declaration, and the absence of an integrated TKDN database affect the effectiveness of procurement decision-making and increase governance risks. Conclusion: This study concludes that strengthening TKDN monitoring procedures, establishing clear PIC mandates, and developing an integrated TKDN commodity catalog and database system are the key strategies to enhance procurement governance effectiveness at PT Bumi Energi. These findings contribute to the micro-organizational governance literature and provide actionable policy recommendations for SOEs facing similar TKDN compliance challenges. To cite this article: Ade, F., & Yuanita, H. (2026). Local Content Policy at PT Bumi Energi: Barriers, Gaps, and Pathways to Optimization. INKUBIS: Jurnal Ekonomi dan Bisnis, 8(1), 324-340. https://doi.org/10.59261/ inkubis.v8i1.154 INTRODUCTION The lack of realization of committed Domestic Component Level (TKDN) values in procurement contracts at PT Bumi Energi indicates a wider challenge to governance that occurs in Indonesian energy-sector SOEs, where regulatory requirements and operational implementation remain structurally unaddressed. The monitoring and verification of TKDN realization is linked as the critical variable that connects policy compliance to procurement effectiveness and it is an operational aspect that has not been so evident in existing academic literature on the subject local content policy in Indonesia (Pereira et al., 2021; Thai, 2017). It is globally accepted since the last two decades, especially in resource-rich nations where while implementing Local Content Policy (LCP) or Local Content Requirement (LCR), issues have popped-up (Kalyuzhnova et al., 2016). This policy is implemented as a strategic instrument to INKUBIS: Jurnal Ekonomi dan Bisnis | 324 Ade Febriyani, Yuanita Handayati Designing An... increase domestic industrial participation, encourage job creation, accelerate technology transfer, and strengthen national economic independence (Aditya et al., 2025; Nurhidayah et al., 2024; Nwapi, 2016). Globally, about 90% of natural resource-producing countries have adopted local content policies in various forms (Dobbs et al., 2013). However, the effectiveness of its implementation is highly dependent on the readiness of the domestic industry, governance capacity, and adequate monitoring systems (Suriyanti et al., 2020). In this context, the main variable of concern is the monitoring and verification of TKDN realization as a representation of the quality of local content policy governance at the organizational operational level. Although LCP is designed to support national industrial development, various studies show that the emergence of problems in its implementation is influenced by several structural and institutional factors. These factors include limited domestic industrial technology capacity, weak coordination between organizational units, complex regulations, and reliance on selfdeclaration mechanisms from vendors (Sitompul et al., 2022; Purba & Irianto, 2025). In addition, the absence of post-contract verification standards and an integrated database system causes TKDN policies to often stop only at the administrative stage without substantial control over their realization. This misalignment between regulatory design and implementation mechanisms then creates a gap between policy objectives and practices on the ground. The impact of these factors is not only related to the effectiveness of industrial policies, but also affects procurement efficiency and the quality of corporate governance. International studies show that the implementation of LCP that is not supported by system readiness can increase project costs, distort competition, and create governance risks due to unverified local content data (Fernando & Ing, 2022; Gourdon & Guilhoto, 2019). In the context of public procurement and SOEs, weak monitoring of the realization of local content has the potential to affect price evaluation mechanisms, domestic preferences, and reporting accuracy to regulators. Thus, the weakness of monitoring is not only an administrative problem, but also has an impact on the quality of strategic decision-making and organizational accountability (Febrianto et al., 2024; Setiawan et al., 2021). For example, to foster the spirit of domestic products in various regulations in Indonesia, including Government Regulation No. 29 of 2018 concerning Industry and Trade in Domestic Products (TKDN), Presidential Regulation No. 12 of 2021 on Non-Tariff Measures and Business Expansion, as well as presidential instruction over domestic product UUD delivers to ministry and SOE (Aditya et al., 2025; Nurhidayah et al., 2024; Purba & Irianto, 2025). Conceptually, TKDN includes material components, labor, production tools, and indirect costs, which are calculated as a percentage of the value of local content. This amount is then used as an assessment criteria in the selection process, including when determining the final evaluation price (HEA). By this, the TKDN monitoring variable in this study is as a (...truncated)