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Way paved for Micro Small and Medium Enterprise to get government contracts

Published:Tuesday | July 7, 2015 | 7:19 PMDaraine Luton

THE MICRO Small and Medium Enterprise (MSME) sector has been singled out for special treatment in the Public Procurement Act, which was passed by the House of Representatives yesterday, allowing it to be the beneficiary of certain categories of government contracts.

"Certain portions of government contracts will be set aside only for the MSME sector. For example, if procurement is to be done, let us say, at a cost of $10 million, certain contractors and suppliers of a higher grade will not be allowed to bid on those procurements. Those procurements will be reserved only for the MSME sector," Horace Dalley, minister without portfolio in the Ministry of Finance and Planning, said yesterday.

Dalley, who was piloting the bill - which was passed - through the House, said that the inclusion of a definition of margin of preference in the Public Procurement Act is part of a move to encourage Jamaica's economic growth, in particular, among the MSME sector.

"With the introduction of offsets, there will be the creation of policy space to facilitate the growth of the micro small and medium enterprise," the minister said.

According to Dalley, the joint select committee, which considered the bill, wanted to ensure that the bill bolstered the efforts of small businesses in Jamaica.

"The procurement bill and its regulation realised that the small contractors and small suppliers in Jamaica were at a disadvantage," Dalley said.

He said that the current system made it difficult for small contractors, but Ed Bartlett, member of parliament (MP) for East Central St James, said that the creation of opportunity for small players is "a wish" unless the small contractors are trained and certified.

"To operate a procurement system where competition is the centrepiece and you don't have the ability to compete, then you are wasting your time," Bartlett, an opposition MP, said.

margins of preference

Central Clarendon MP Mike Henry also questioned whether a set-aside provision would apply in the case of local contractors, competing against those from overseas, for government contracts.

Dalley pointed out that the bill contained a clause where the minister may make regulations for margins of preference and other measures to be applied in international competitive bidding to enhance the relative competitiveness of any sector that as a matter of policy, is being favoured for developmental purposes.

The Government of Jamaica, last fiscal year, spent $59.4 billion on the procurement of goods and services, which does not include contracts valued at $500,000 and below.

The bill, if passed by the Senate, will be Jamaica's first stand-alone, legal instrument that will guide how the Government spends money on the procurement of goods, services, and works.

Dalley said that there was an unclear line of demarcation between the Office of the Contractor General (OCG) and the National Contracts Commission in dealing with matters of procurement.

A Public Procurement Commission is to be established and granted administrative powers to deal with public procurement issues in Jamaica.

The principal function of the commission is to promote and facilitate the attainment of the objects of the law. The commission, among other things, shall register and classify persons, firms, or entities as suppliers and approve persons, firms, or entities as approved unregistered suppliers.

It means that the OCG will be cut out of the contracting process.