Tue | Sep 24, 2019

MSMEs to get special access to government contracts - Clarke to table procurement regulations by September 30

Published:Wednesday | July 24, 2019 | 12:35 AMKarena Bennett/Business Reporter
Minister of Finance Dr Nigel Clarke.
Minister of Finance Dr Nigel Clarke.

Minister of Finance Nigel Clarke will table orders in Parliament by September 30 that give effect to special and differential treatment for micro, small and medium-sized businesses, MSMEs, under the public procurement law.

The regulations, once implemented, will allow for ‘set-asides’, the result of which would be the reservation of a portion of the Government’s annual procurement contracts for MSMEs.

They also speak to “domestic margins of preference”, which is the preferential treatment of Jamaican suppliers – in this case MSMEs – in accessing government procurement contracts in specific circumstances.

The finance minister, who made the announcement at the Jamaica Chamber of Commerce’s procurement seminar on Tuesday, noted that the tabling of the orders would result in the roll-out of a six-month pilot procurement programme through “carefully selected” entities in the ministries, departments and public bodies.

“The aim of the pilot is to allow us the opportunity to adequately understand the implementation challenges and to find more creative ways to optimise the results expected,” Clarke said.

“This is revolutionary; this is giving a leg up to our MSMEs, who are vitally important for our growth and prosperity. It should signal the seriousness of the government to ensure that we have a vibrant and healthy MSME sector,” he added.

Last August, the Government of Jamaica passed the Public Procurement (Amendment) Act, which spoke to greater inclusion of the MSME sector in the procurement process. The new public procurement regime took effect on April 1.

The pending regulations, which address the registration and classification of suppliers, were expected to be tabled in the first quarter of the new fiscal year but, according to Clarke, will now be tabled before the end of the second quarter, that is September 30.

Under the domestic margins of preference regime, local bidders could be awarded contracts from the government even if prices are marginally higher than the prices of the non-Jamaican bidders. It is applicable only if the goods being supplied contain a minimum level of Jamaican value-added or domestic content.

The second measure – the set-aside regime – will see MSMEs that fall within the prescribed procurement limits getting priority to supply contracts from state-owned entities. Clarke has not disclosed how much of the government’s annual procurement budget will be set aside for MSMEs.

“This will be implemented in an environment of competitiveness and transparency. We have over 30,000 such businesses that are operating in Jamaica today, but the competition for the space reserved for MSMEs should allow for the delivery of good quality and prices,” Clarke said.

Aside from ensuring the “delivery of value for taxpayers dollars”, the minister noted that he will also be monitoring the process to ensure that the principles of the amended regulations are captured without opening up the possibility for people to “jim screechie” the process.

“We have to ensure that loopholes that are unanticipated will be dealt with - like someone having a very large business and just setting up a small business so that they can profit from this. It is not intended for the large business owners or small subsidiaries in their group; that’s not what we mean,” Clarke said.

karena.bennett@gleanerjm.com