Transcript MSME PARTICIPATION IN PUBLIC PROCUREMENT POLICY

MSME PARTICIPATION
IN PUBLIC PROCUREMENT IN
JAMAICA
Shirley Gayle Sinclair
Snr. Director
Procurement Policy Implementation Unit
WHAT IS A MSME IN JAMAICAN
CONTEXT?
Micro-Enterprises:
Small Enterprises:
Medium Enterprises:
4 employees or less
4-10 employees
11-50 employees
Revenue generated does not relate well to
size.
Usually less than JMD 99M (US$1.17M)
WHY MSME PARTICIPATION IN
PROCUREMENT?
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MSMEs provide 80% employment, 40%
GDP
Support community development and
cohesiveness;
Reduce payment of unemployment
benefits;
Provide employment for low skilled
workers;
Government is the largest buyer
SUPPORT ICT4GP
CONSULTANCY – Examine the current status of MSME in the
procurement system, the obstacles to their effective
participation and recommend measures to assist
METHODOLOGY
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Research previous Jamaican and
International MSME reports and surveys
Direct discussions with MSME Business
Associations and support agencies
Survey sample of MSMEs currently
participating in procurement & Procurement
Staff (informed focus groups)
FINDINGS
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No current reliable data on MSME numbers or
participation but it is probably < 3%
MSME make-up :
Micro (formal) 35%
Micro (informal) 40%
Small Enterprise 15%
Medium Enterprise 10%
FINDINGS
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Jamaica - approx 300,000 MSMEs
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50% part of the informal economy.
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Jamaica has one of the highest levels of entrepreneurial activity in
the world. +
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17% of the adult population, or approximately 391,000 individuals
were actively planning or had recently established a new business.
Of this number 241,500 were nascent entrepreneurs and 154,100
had established a business in the 42 months prior to June 2005”
Global Entrepreneurship Monitor (GEM) Jamaica Report, 2005
FINDINGS (barriers)
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Almost no micro-enterprises /few small enterprises are
participating
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Formal requirements- e.g Business registration, tax payments,
securities and bonds would bankrupt most micro-enterprises
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Complex bidding process
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There is an inadequacy of economical, accessible procurement
business education programs
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Delays in payments to contractors/subcontractors
Government of Jamaica
Number, Value (USD), and Percentage
of
Contracts Awarded
Contract
Value
RangeUS$
No.
Value
2009/2010
2008/2009
2007/2008
%
No.
Value
%
No.
Value
%
<5800
5,701.0 1,421.7 3.6%
7,904 1,796.5 3.1%
5,433.0 1,606.4 2.7%
6k - 12k
2,615.0 1,886.0 4.7%
3,140 2,228.6 3.8%
3,350.0 2,384.5 4.0%
12k-59k
2,969.0 6,528.2 16.3%
3,486 7,337.5 12.5% 3,773.0 7,855.9 13.1%
59k-118k
212.0 1,557.8 3.9%
253 1,836.1 3.1%
576.0 3,993.7 6.7%
118k-588k
188.0 3,890.8 9.7%
399 8,454.3 14.4%
298.0 6,624.1 11.0%
>588k
105.0 24,730.8 61.8%
142 36,863.8 63.0%
116.0 37,528.8 62.6%
Totals
11,790.0 40,015.3 100.0% 15,324 58,516.8 100.0% 13,546.0 59,993.4 100.0%
POLICY PROPOSALS
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Establish a reservation for MSME – 20% of each agency
procurement budget
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Remove requirement for bid & performance security on contracts
up to US$240,000 (J$20M)
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Mandatory evaluation criterion valued 20% to encourage use of
MSME in contracts over US$ 580,000 (J$50M)
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Web –enabled National Procurement Registry, voluntary
registration, supplier responsibility
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Opportunities for MSME to be posted on one central site
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Disaggregation of contracts
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Tax relief for fledging businesses