A private member's bill tabled Monday proposes that contract bids be evaluated based on nine categories.
NDP finance critic Trent Wotherspoon said currently the government only looks at the lowest initial price in procuring products and services.
"The reality right now is that the naive approach from this government and the premier is allowing the lunch to be eaten of many Saskatchewan companies here in our province," he said. "What we're pushing for is a levelling of the playing field."
The categories laid out in the act include local knowledge, product history and previous performance on government contracts. It also includes quality, supplier experience, warranty, delivery schedule, initial price and final total price.
Wotherspoon said the legislation would mainly affect Saskatchewan's manufacturing and construction industries, but also the service industry.
"It just doesn't make sense to only look at the initial lowest bid price, which has the result, the net effect, of having companies from all over the world and the United States tripping around our province at the same time as we have manufacturers and companies who can do that work," he said.
He added that one example where the policy could have an effect is with steel companies, which he said lose work to companies from Ontario, Quebec, California and Texas.
"We're hearing from some of the steel manufacturers, also some construction companies, who are frustrated when they're bidding on these projects," he said.
"The result is that these companies here in Saskatchewan are in layoff mode when they could be doing that work and creating that employment."
Gordon Wyant, who is the minister responsible for SaskBuilds, said procurement policy is an important issue.
He said Priority Saskatchewan, which is a branch of SaskBuilds, was created to find out what barriers provincial companies are facing in the procurement process.
"What we need to do is determine precisely what those issues are," Wyant said.
He added that the government hasn't been able to go through the legislation thoroughly but will examine the proposal as soon as possible.
"If anything that is being suggested by the Opposition in any way borders on or extends over to having local preference, we'll categorically reject that," Wyant said, adding that free trade agreements remain a priority.
He said this would include a local preference policy "disguised as local knowledge."
"It's a significant disadvantage to those same companies when they go to compete in other jurisdictions," he said. "It's a violation of our trade agreements and we're just not going to go there."