LUCEA, Hanover – Government is revising its procurement guidelines in an effort to implement a policy – an Affirmative Action Procurement Policy – that favours micro, small and medium-sized enterprises (MSMEs), said Commerce, Science and Technology minister Phillip Paulwell.

“The existing policies and guidelines do not adequately provide for the development agenda,” Paulwell disclosed at Thursday’s launch of the Hanover Chamber Business Centre in Lucea.

According to Paulwell, the vast majority of micro and small enterprises are at a disadvantage with respect to government procurement, as the current policy is skewed in favour of the larger firms.

“Domestic firms do not have the level of cost advantages as large overseas firms and so cannot compete with those firms on the cost criterion,” he explained.

“The current policy favours the packaging of contracts in large lots sizes (and) this puts the MSMEs at a disadvantage, as quite often they are not able to qualify to bid on large contracts,” Paulwell added.

It would be more desirable, the minister said, for contracts to be packaged to facilitate some of the MSMEs, either through direct contracting with government or by acting as sub-contractors to larger firms.

“While this happens to some extent in works contracts, the general principle needs to be expanded if the MSMEs are to obtain a larger proportion of government procurement,” he argued.

Local MSMEs have long complained of their inability to meet existing bid requirements. Paulwell told the launch that government was looking to establish different bond thresholds.

He pointed out that some countries have successfully implemented “affirmative action-type” policies and legislation to facilitate the development of their local economies.

“In the case of the USA, their small business legislation makes provision for a certain level of government procurement to be earmarked for small businesses. The USA also has a Buy American Law which encourages firms to purchase US-made goods,” he explained.

In the case of Trinidad and Tobago, he added, that Caribbean country has provision for a 10 per cent margin of preference in favour of local firms.

“For evaluation purposes, the bid of a foreign firm would be increased by 10 per cent. This margin of preference serves to enable their domestic firms to compete with overseas firms for government contracts,” Paulwell said.

The Hanover Chamber Business Centre is a collaborative effort between the Jamaica Business Development Centre and the Hanover Chamber of Commerce. The centre will house an extensive business reference collection of government and non-governmental information for use by the business clientele .