2009-05-05

Industry Minister Announces Small Business Procurement Policy

Ministries and agencies of Government will now be required to allocate 15% of their recurrent and capital budgets to allow for the procurement of goods and services from qualified small and micro enterprises.

This was announced this afternoon by Minister of Industry, Investment and Commerce, Karl Samuda, during his contribution to the 2009/2010 Budget Debate in Gordon House.

In justifying the rationale for the new procurement policy, Minister Samuda pointed out that aspects of government procurement may be viewed as discriminating against micro and small businesses, preventing them from qualifying for Government contracts. For example, the packaging of contracts into large lot sizes tends to favour large firms. In addition, bidders for Government contracts are required to be previously registered with the National Contracts Commission (NCC), a task that can be administratively burdensome for tens of thousands of small businesses.

Under the new policy, contracts intended for small businesses, ranging from $375,000 to $10 million will be exempted from the need to provide a bid bond during the tender exercise. However, the usual performance guarantee will remain intact.

The maximum contract sizes under the policy for goods, works and services are as follows:

Goods contract - $1 million
Works contract - $10 million
Service contract - $5 million

Minister Samuda said an eligible small business must be registered with the Companies Office of Jamaica and officially designated as a small business, with total assets not exceeding J$30 million.

All government entities will make available on their websites information on contracts to be awarded prior to invitation to tender so that small businesses can prepare themselves to bid when the invitation for tender is issued.

Ministries, departments and agencies will be required to provide quarterly reports on small business procurement to the Contractor General.