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Micro, small and medium enterprises are missing out on the billions of income available to businesses that vie for government contracts, which keep being awarded to a narrow set of companies, Nadia Morris, the acting executive director of the Public Procurement Commission, PPC, has said.
Too few entrepreneurs are willing to compete for public contracts that could allow them to grow and expand their businesses, Morris said.
The PPC has the mandate of ensuring that the acquisition of goods, services and works by the government and the entities it owns is done in an efficient and transparent manner.
Morris says while the PPC reviewed and endorsed nearly $79 billion contracts in the fiscal year 2023/24, the overall amount that the government spends in procurement is in the order of $450 billion every year.
Based on guidelines, procuring entities such as government ministries, departments and agencies, have the remit to award ‘Tier 1’ contracts, those valued up to $29.99 million, without review by the PPC.
However, ‘Tier 2’ contracts, $30 million up to $59.99 million, must go to the PPC for review; while ‘Tier 3’ contracts, over $60 million, also go to the PPC, which will examine them and make a recommendation to Cabinet for that body to take a decision on approving the award of the contract.
The PPC says it is trying to find ways to bring the message to suppliers who are not yet registered, to show them that there is an opportunity for them to participate in public procurement. Morris says based on what she’s seeing at the PPC, a lot of entrepreneurs are missing out on contracts that they could easily qualify for.
“The portion that came to PPC for just last year alone was $78.8 billion. We find that the suppliers, for one reason or the other, they are not coming into the net to be able to do business with the government,” Morris lamented.
“Those who are participating in these processes are the same ones you keep seeing, repeating over and over again,” Morris added
Even among those who are properly registered, only a small percentage of the suppliers are lining up to compete, she said.
For the financial year ended March 2024, there were 2,754 entities registered with the PPC. Registration has to be renewed annually but not all entities renew. Morris says there is an average of 800 new registrations every year, and she wants to grow that to about 1,000, and the number on roll to about 3,200.
“If you tap into the Companies Office database, you’ll see how many persons are registered as businesses. I’m here saying: ‘Why can’t we get some of those persons over here?’” Morris said.
Entities wishing to register with the PPC need to furnish a list of 14 documents. Morris acknowledges that many have shied away because of the notoriously slow manual registration process.
“They still require them [all 14 documents], but you need to give us at least the six that we need to show, so that we can start the process,” Morris told the Financial Gleaner.
For starters, those wishing to register need a TCC or tax compliance certificate and a status letter from the Companies Office of Jamaica. There are also some declaration forms that must be completed to indicate whether there is any conflict of interest or if any of the company’s directors are part of the government system. Applicants must also provide a list of certificates of approval from relevant regulatory bodies and audited financial statements.
“If you give us the documentation, it can take one to two weeks. Right now, if you submit and have the correct documentation, based on our tracking, it can take a week,” Morris said.
The PPC aims to reform the process for speed and efficiency, but in the meantime is taking steps to make the turnaround faster for applicants.
“We are willing and able because we have a dedicated help desk. If you have the issues, we can walk you through the process. We are setting up ourselves to be able to take on the influx of persons who need assistance because we know everybody’s not tech savvy,” Morris said.
The PPC was established in 2019 to oversee Jamaica’s public contracting processes. Its responsibilities include registering entities that want to business with state bodies, review of procurement submissions from procuring entities, and implementation of the contractor and consultant performance evaluation programme.
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