THE push to reserve 20 per cent of government procurement for micro, small, and medium-size enterprises (MSMEs) is highlighting a readiness problem, with many businesses struggling to meet verification requirements because they lack proper financial records.

“We have launched in July the process of verifying the SMEs for this list, so it is taxing because most do not have financials,” Public Procurement Commission (PPC) Executive Director Nadia Morris said Monday at the launch of the Jamaica Employers’ Federation (JEF) and Young Entrepreneurs Association of Jamaica (YEA) Business Development Centre at the JEF’s office on Ruthven Road in Kingston.

The verification process is intended to establish a business’ category, revenue, and ownership, helping to identify businesses eligible for government procurement opportunities. But the issue extends beyond getting businesses onto the registry, with the PPC also focused on strengthening supply readiness and building a pool of contractors capable of delivering quality services, once awarded contracts.

“Through this project we are seeking to now broaden supply readiness, increase awareness of registration requirements, and also build stronger contractors,” she said.

The new business development centre is being established to provide businesses with practical support as they move through different stages of development — from starting and registering a business to managing and scaling operations. The launch also highlighted a gap between the attention given to starting businesses and the systems required to sustain and grow them. Entrepreneurs can move from questions about registration and accounting to more complex needs around management, contract negotiations, distribution, and supply-chain management as their businesses grow.

“Many businesses don’t fail because entrepreneurs don’t have good ideas; they fail because of the weaknesses in the institutions — poor systems; poor management; cash flow and government issues,” minister of state in the Ministry of Industry, Investment, and Commerce Delano Seiveright said at the launch.

Minister of state in the Ministry of Industry, Investment, and Commerce Delano Seiveright addressing the official opening of the Jamaica Employers Federation-Young Entrepreneurs Association Business Development Centre in St Andrew on Monday. (Photo: Karl Mclarty)

The weaknesses can become particularly consequential when businesses begin pursuing larger opportunities, including government contracts.

“Get ready, don’t wait until the tender appears. Get your accounts in order and formalise your business,” Seiveright advised.

In July the Government said more than 600 MSMEs had secured government contracts worth a combined $3.2 billion over the preceding three years, across about 100 industries. The PPC has also been working to simplify supplier registration, with Morris previously describing the existing process as bureaucratic, and saying proposed reforms would reduce the administrative burden on businesses. But the latest verification exercise suggests that reducing administrative barriers will not, on its own, solve the readiness problem.

The centre will seek to address some of those gaps by making professional services, human resource and industrial relations expertise, mentorship, digital support, training and connections to financing, procurement, government services and markets more accessible.

The JEF-YEA partnership is expected to expand the centre’s reach through partnerships with the Government, financial institutions, development partners, professional service providers, training institutions and other private and public sector stakeholders.