Public sector procurement and the support of small and medium-sized enterprises: a comprehensive public procurement regulatory framework

Abstract

Governments worldwide leverage their purchasing power to advance social, economic, and environmental agendas. Public procurement can be employed as a strategic instrument to support small and medium-sized enterprises. Many countries are showing a rising interest in leveraging public procurement to foster the integration of small and medium-sized enterprises into markets. However, access to public procurement contracts is a challenge for small and medium sized enterprises. There are challenges posed by government policies that is frequently overlooked. Public procurement regulations cover procedures, methods, standards, and terms for inviting bids, evaluation, selection, negotiation, awarding, and payment of suppliers of goods and services. However, many small businesses fail to meet these procedures, methods, standards, and terms because of capacities and resources constraints. There are public procurement initiatives that are currently being implemented throughout the world to help small businesses gain access to markets. Nevertheless, these initiatives are still relatively new and unstructured. There continues to be a dearth of peer reviewed research. This paper delineates small and medium-sized enterprises from various viewpoints, underlines their importance, explains the frameworks for public procurement, and proposes government-led initiatives that could facilitate the integration of small and medium-sized enterprises into the market. It is concluded that governments should implement strategies aimed at assisting small businesses. These strategies may include non-competitive practices, subcontracting initiatives, qualification criteria, preferential schemes, and award criteria. By doing so, governments can create a fairer playing field, promote the competitiveness of small businesses, and encourage their engagement in public procurement processes. This, in turn, will foster SME growth, spur economic development, and facilitate job creation.