Time to roll out the Small Business Procurement Programme

Last Friday, the Guyana Chronicle reported that Minister of Business Dominic Gaskin had indicated that his Ministry was “in the advance(d) stages” of preparation for the introduction of the Small Business Procurement Programme, the provision under the 2004 Small Business Act for small businesses to access 20 per cent of state contracts. Quite what is meant by “advance(d) stages” is, however, unclear. When this newspaper last received a briefing on this matter from the CEO of the Small Business Bureau (SBB) Dr Lowell Porter several weeks ago, we were told that some work still remained to be done to complete the mechanistic and monitoring infrastructure to ensure the smooth running of the programme once it comes into effect. Up until the Minister’s pronouncement last week, we had received no further update on the pace of progress towards the completion of the infrastructure.

This newspaper, on Boxing Day last year, quoted the Minister as saying that “next year (which we took to mean 2018) is the year for the small business programme.” By July, the Ministry of Business, in an article published in the Stabroek Business on Friday, July 27, shifted the timeline to 2019 but provided no specific date for the launch of the programme. The Ministry, however, appeared to justify the delay on the grounds that “a number of challenges have been identified” and that “solutions are still being sought to reduce any negative impact on the programme’s effectiveness.”

While we now know from Minister Gaskin’s most recent disclosure on the issue that the programme will not come on stream before next year, we are still unaware of the extent of the progress made towards overcoming the “challenges” to which the Ministry referred in its July article. More than that, we are yet to receive a clear timeline for the full and effective implementation of the programme.

One of the things that has already been explained about the Small Business Procurement Programme is that its implementation must, of necessity, be preceded by the putting in place of mechanisms that would ensure its effectiveness; that is to say that the system is transparent insofar as it does not fall victim to nepotism or corruption by any other means and that those smaller businesses get their fair share of contracts from the various state agencies that will be required to make them available.

That being said, and while we understand that ensuring the integrity of the system necessitates the careful implementation of the strictest possible regulations and procedures, a point has been reached where local small business service providers are evincing an understandable impatience over the lack of clarity that obtains with regard to implementation, given its unmistakable importance to the small business sector and to the wider Guyana economy.

For a host of reasons, the Small Business Procure-ment Programme is (arguably) the most important of the suite of provisions embodied in the Small Business Act. Not least among these is its potential impact on enhancing service standards in the small business sector which, one expects, will be a requirement if they are to be considered for state contracts. One expects too, that the prospect of securing state contracts is likely to witness the startup of new service providers who will come under pressure to enter the market offering a higher quality of service than would have obtained prior to the implementation of the Procurement Programme.

The lifeline of bigger contracts could well mean the difference between survival and ‘going under’ for some currently struggling small businesses that are unable to compete for state contracts under the prevailing demanding regulations. Additionally, the implementation of the new procurement provision is almost certain to witness a greater tendency towards the pooling of resources by small companies to tackle state contracts the sizes of which might exceed the capabilities of a single firm.

But by far, the biggest overall potential benefit to the country which the Procurement Programme could bring, is the broader impact on the economy as a whole through job-creation since bigger contracts will, in some instances, necessitate a larger work force. More jobs will mean enhanced security for families, for the circulation of money, for spending and by extension, for the well-being of the business community.

In his update on the issue last week, Minister Gaskin alluded to what he described as “several methods” of administering the programme, one of which he termed a “set aside” arrangement “where procurements below a certain threshold are only available to small businesses.” This would mean that the rationale for determining size would have to be established in order to ensure that the system does not become subject to cynical manipulation by larger firms that might not qualify on the basis of size. What, according to the Minister, is also being contemplated, is a system that provides what he describes as “special incentive” to those businesses that contract a portion of their work to smaller ones. Here again, one can see such a mechanism working to the advantage of smaller businesses only if the provisions that are put in place, are able to guard against loopholes that will render the system vulnerable to the sort of barefaced cheating that is altogether possible, and which imposes the responsibility of greater scrutiny on the tender system whether it be at the national, ministerial or regional level. 

Here, as the Minister himself appears to be admitting, government is caught between a rock and a hard place that arises out of the need to implement the Procurement Programme in the shortest possible time, in the first instance, and the need to ‘get it right’ the first time, on the other.

With the best will in the world and whatever caveats, provisos and conditionalities accompany the initial implementation, it is likely that, along the way, the system may have to be tweaked, here and there, from time to time, to cater for unforeseen developments and unanticipated loopholes. Whilst it is important that the work associated with the initial implementation of the programme guard against such situations, government should be mindful of what is now the utmost importance of setting a clear, definite and reasonable time-frame for full and effective implementation of it. Among small businesses now ‘chomping at the bit’ against the backdrop of meaningful jobs that will guarantee their stability, there is developing an audible clamour for the gateway to what they see as the best existing opportunity to take their businesses forward, to be flung open. Unemployed persons, numbering perhaps in the thousands, are, in all likelihood, contemplating possible employment opportunities and are equally keen to see the programme get underway.

Accordingly, and even given the admitted challenges associated with implementing an administering mechanism that ensures the effectiveness and integrity of the system, further delay in the implementation of the programme, all things considered, has become difficult to justify.

Around the Web

Comments