Outdated laws hinder Govt’s promise to award 20 percent of contracts to small businesses – Tender Board Head

Apr 22, 2019 News

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By Kiana Wilburg

Since January 2019, the Coalition Administration had said that small contractors would have access to 20 percent of all government contracts. But this is being hindered by the unambiguous provisions in the Small Business Act, says head of the National Procurement and Tender Administration Board (NPTAB), Berkley Wickham.
During an exclusive interview with Kaieteur News, Wickham said that the Act only allows for goods and services but not “works”. Wickham said that this term has to be included. He said, too, that the amendment is before the National Assembly.
Wickham said, “There is no provision in the Procurement Act to set aside procurement opportunities, specifically works, for small businesses. This affects the implementation of the requirement in the Small Business Act that at least 20% of public procurement should be set aside for small businesses. The amendment to the Procurement Act is before the National Assembly.”

The official added, “When these amendments are passed, the full effect of the small business set aside programme would be implemented. It is important enough to be dealt with now while we await the wider Revision of the Leal Framework for procurement.”
Turning his attention to strengthening the legal framework, Wickham said that NPTAB together with the Public Procurement Commission reviewed and gave input to the Inter-American Development Bank (IDB) financial consultancy to strengthen the Guyana’s Public Procurement framework by incorporating international best practices.
He said, “For example, two key areas proposed are the provision for e-procurement and framework contracts. With regard to framework contracts, this means an agreement between one or more procuring entities and one or more contractors or suppliers valid for a specific period of time, which establishes the terms and conditions in particular the price, and where appropriate quantity under which the contractor or supplier will enter into one or more contracts with the procuring entity during the period in which the framework agreement applies.”
The review also seeks to recognize small business and women owned businesses in Public Procurement.
Wickham said that the full set of recommendation for strengthening the Procurement Act of 2003 is now with the Attorney General Chambers for drafting.
SBB REPORT
The latest report of the Small Business Bureau (SBB), which was laid in the National Assembly in July last, also called for more government contracts to go to small businesses.
The Bureau pointed out that the Procurement Act (2003) provides for this. In fact, it met with representatives of the Ministry of Finance, Ministry of Business, the Small Business Council and other stakeholders to implement the provisions set forth in the Act.
However, the report noted that there are concerns relating to some contrasts between the Procurement Act (2003) and the Small Business Act (2004), which will require constitutional amendments.
SBB has to ensure a guarantee and commitment of 20% Government procurement from small businesses.
“Nevertheless, discussions will continue to ensure the smooth implementation of the Procurement Act, which will provide an opportunity for small businesses to be guaranteed, access to government contracts. While work is being done on the development of the Small Business Procurement Policy. The Small Business Bureau encourages, ministries, and other government agencies to buy from small businesses,” the report noted.
Further, the report highlighted that entrepreneurs in Guyana can be classified as necessity entrepreneurs – that is, individuals that are pushed into entrepreneurship because they have no better alternatives for work, reflecting the scarcity of decent wage-labour opportunities in the economy.
However, the report noted that despite the importance of entrepreneurship, there is an absence of a National Entrepreneurship Strategy or direct policy to support entrepreneurship.
The report noted plans to start preparation for this National Entrepreneurship Strategy.
During reporting period, the SBB stated that it continued to administer the Micro and Small Enterprises Development (MSED) Project resulting in the approval of loans for 63 businesses, which amounted to $237,743,000.
Under the MSED programme, the Government of Guyana provides small business grants of $300,000 maximum, to small businesses. This is mainly provided for start-up businesses, but may be extended to existing businesses based on their needs.
The Grant Committee also approved 73 grants totaling $21,900,000. SBB noted that through the grant scheme and mutual guarantee scheme, approximately 373 jobs were directly created and sustained.
According to the report, the SBB also established training agreements with several partners.
“Through these arrangements coupled with internal resources, a total of 1,353 persons were trained across Guyana, in various areas including business management fundamentals and hands-on technical skills training,” the report notes.
Among the recommendations was for more fiscal incentives for small businesses. These incentives, according to the SBB, play a pivotal role in the strengthening of the country’s economy by boosting the growth of the small business sector.
The report highlighted the need for tax breaks for start-up businesses for at least five years of operation and reduced duty concessions for small businesses.
The report also noted internal efforts being made to serve clients better.
Based on the report, a review was done on the governance model employed by the SBB to ensure effective management both in its external engagements and internal management practices.
The report noted that the review and strengthening of an accounting policy and procedure manual to assist in strengthening the governance framework of the Bureau was undertaken.

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