Finally! 14 year-old provision for small business state contract allocation set for January

Minister of Business Dominic Gaskin

Confirmation that the clause in the country’s 2004 Small Business Act making provision for local small businesses to access 20% of state contracts from January next year will be activated was on Monday provided in the National Assembly by Minister of Business Dominic Gaskin.

It however seems that at least in the immediate term the full and complete implementation of what is regarded in the small business community as a potentially significant development will be limited by the capacity of the beneficiary entities to effectively execute in some areas.

On Monday Gaskin disclosed in his post-budget presentation to the House that the 20% allocation to small businesses “will begin with a set aside of all procurements of under $30 million for approved small businesses” subject to capacity existing within the sector” though he stated that the “set aside” is likely to be inadequate to meet the stipulated 20% allocation. “Government is aware that even if all of the procurements under $30 million were to go to small businesses it still may not amount to 20% of total procurement,” Gaskin said.

What would appear to be some existing immediate term limitations, however, are still, it seems, not sufficient for government to further delay the implementation of a clause in the Small Business Act which it sees as pivotal to small business growth and wider employment generation. In the National Assembly on Monday, Gaskin told assembled parliamentarians the provision is so important that it “must begin and we must start collecting the data to show what percentage of government is going to small businesses so that we can make annual adjustments, going forward, until we hit the 20% target provided for in the Small Business Act of 2004.”

What appears to be final confirmation that eligible small businesses can begin to submit tenders for some categories and sizes of state contracts from January next year is likely to meet with the approval of the small business sector and the private sector as a whole. Earlier this year the Guyana Manufacturing & Services Association (GMSA) welcomed the move to hasten the full implementation of the provision which is likely to see a move by small businesses in some sectors to further build capacity to meet with the eligibility requirements for accessing what are likely to be multi-million dollar state contracts.

On the government side, the authorities will be challenged to carefully monitor the implementation of the new contract allocation regime on an agency to agency basis in order to ensure the transparency and veracity of the process.

In October Minister of State Joseph Harmon had told a post Cabinet press conference that government had given the ‘green light’ to the implementation of the programme from January. Harmon had said that the programme “will ensure that small businesses have their fair access to government procurement opportunities through a transparent and efficient process and will also enhance the economic impact of public spending.”  Despite this pronouncement, however, there had still been indications that government was still in the process of tweaking the programme in order to make it fully ready for actual implementation.

The Small Business Act of 2004 requires that  at least 20% of procurement of goods and services required annually by the government be obtained from small business. The Act also mandates the Small Business Council to facilitate this provision by preparing a small business procurement programme.

Prior to the legally correct implementation of the 20% set-aside provision for small businesses government must still tackle the need to move to the National Assembly to effect the amendment of the Public Procurement Act, the principal legislation governing procurement, a point made by Public Procurement Commission Chairperson Carol Corbin during a recent  interview with the Stabroek News.

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