The Private Sector Organisation of Jamaica (PSOJ) welcomes Finance Minister Hon. Dr. Nigel Clarke’s intentions to table Procurement Regulations that will grant Micro, Small and Medium Enterprises (MSMEs) special access to Government Contracts. The plan is to allow Government to reserve a portion of its annual procurement contracts for MSMEs. The Regulations also speaks to a Domestic Margins of Preference which would give Jamaican suppliers preference in the application process, regardless of their price point in relation to foreign suppliers.
The PSOJ and other private sector groups are pleased with the new opportunities that will arise from this legislation, however, they remain optimistically cautious about how quickly positive results will be realized by MSMEs and strongly urge for surrounding policies, requirements and infrastructure to be modified to ensure maximum benefit of the legislation.
Newly elected PSOJ President Keith Duncan and head of the PSOJ Access to Finance initiative says: “This really is very good news; however, we do have some concerns. We believe that one of the mandates that we should all adhere to when developing initiatives to improve the ecosystem for MSMEs, is that we need to ensure end-to-end that all such initiatives are what we call “Fit For Purpose.” For us, “Fit For Purpose” means that we are cognizant of all the interlocking pieces in any of our efforts. MSME initiatives must be designed to accommodate the cultural, educational and financial realities of where we live and who is being targeted.”
Duncan continued, “Through this “Fit for Purpose” lens, we see two very high hurdles for MSME participation in this initiative. 1) The Application Process to qualify for Government Procurement Programs and 2) The time it takes for the Government to pay for products or services delivered.”
Hugh Johnson, President of the Small Business Association agreed with Duncan “The Application Process to qualify for the Government Procurement Program is extremely intimidating and laborious. Many MSMEs abandon the application process even after they have started.”
Johnson continued: “We think that the negative effect of these two hurdles will dampen the impact of the MSME Special Access to Government Contracts Regulation. Many MSMEs simply can’t or won’t benefit from the opportunities as the hurdles to participation are too high.”
Supporting the sentiments of his colleagues, Donovan Wignall, President of the MSME Alliance said “The notoriously long time that the Government takes to pay its obligations puts an unmanageable burden on the financial wherewithal of the MSME. Many an MSME can go out of business waiting for the Government to pay up and settle its obligations. This is not just about money; this is also an issue of fairness and justice.”
The PSOJ recommends that in order to maximize the benefit of this pending regulations, the Government should also consider the following; extensive assessment of the government procurement application requirements, forms and processes and identify where they can be made more MSME friendly and that any Government supplier with less than 30 employees will be contracted with a deposit and paid on a net 30 basis.
We believe that by addressing these two hurdles along with the legislation, the Government will create an MSME Government Procurement Initiative that will indeed be fully “Fit For Purpose” and allow MSMEs to fully benefit from the good intentions of this legislation.