Bid Security Removed for Crown Projects Under $ 7 Million
As he stressed that the government will continue to implement general policies for the growth of small businesses, the Minister in charge of Finance, Dr Ashni Singh, said that the tender guarantee for contracts under 7 million dollars had been cut and he welcomed the increased participation of small entrepreneurs in the public tendering process.
He explained that as the government strives to ensure that at least 20% of state contracts are awarded to small contractors, the National Council for the Administration of Public Procurement and Tendering (NPTAB ) has put in place a system in which bidders will now sign a self-declaration form guaranteeing their commitment to contracts. $ 7 million and less, instead of the previously required bid security.
“We believe that the small businesses of today are the medium and large businesses of tomorrow and as they are helped we would see more and more small entrepreneurs entering the economic space here. The government has taken a number of measures to facilitate the participation of small businesses in the tendering process. The NPTAB, for example, has taken a number of steps simply to encourage more and more participation in the public procurement process, ”Dr Singh told The Sunday Stabroek in an interview.
“We are an active believer in promoting small business, and this is widespread with the help, as you will see, of the Small Business Bureau… and other agencies that I have listed, such as NPTAB et cetera, all playing their part. role in encouraging small entrepreneurs, “he added.
Dr Singh highlighted work done under the current leadership of NPTAB Chairman Tarachand Balgobin, such as granting a 5% advantage to small businesses and removing the bid bond.
Balgobin noted that in order to acquire a bid guarantee, an entrepreneur would have to go to the bank or an insurer to obtain a guarantee. “In order for the bank to give you this tender guarantee, you must have a guarantee; some assets. If you don’t have that asset base, but you have the skills, competency, experience, papers and all that, you still wouldn’t qualify. You wouldn’t have qualified. But we took it away, ”he told this newspaper.
He continued: So now you have what’s called an offer guarantee statement. You don’t have to find the money. All you have to do is sign a statement that is incorporated into the offer, which says that if you don’t comply – as in the same way you would have had an offer guarantee – you are voluntarily telling the government “ Kick me out ‘”.
The NPTAB chairman said that in the same way that a defaulting contractor would lose the bid security, with the declaration process, he would accept the responsibility of being penalized by the government, which could extend to his ability to be taken into consideration for future contracts.
“Margin of preference”
In March of this year, Balgobin explained that in order to allow small businesses to access 20% of public procurement, the NPTAB had put in place a 5% preference margin for companies that qualify by law.
“What we have done is included in the tender document that there will be a 5% preference margin for small businesses. So if big companies bid more, because of economies of scale, small companies can now compete, ”he said.
“When you award, you award to the lowest compliant bidder. If that other person is unregistered and their (offer) is 5% higher than yours, as a small business you are deemed to be above them. The law allows a margin of preference, up to 10%, for small businesses and we started at 5%, ”he explained.
Guyana’s Small Business Law provides that 20 percent of purchases of goods and services are reserved for small entrepreneurs. Since this did not include “works”, then President of the Public Procurement Commission, Carol Corbin, pointed out that small contractors should always have competed with large contractors for all construction projects.
She had urged that the laws be amended to include works.
While there had been promises made to small businesses since late 2015 that they could be awarded at least 20% of public procurement of goods, services and works, the Small Business (Amendment) Act 2020 was not adopted. in the National Assembly only in February. of this year.
Balgobin has made it clear that the NPTAB believes small businesses want the opportunity to show that they can participate and that they are good at the work they do.
That’s why he said the agency remains committed to ensuring that more and more people can qualify to bid on contracts that themselves, as taxpayers, pay.
“The question is how do you help small businesses qualify to enter the market and that’s part of the standard tender document. Not for bragging rights, but changing the bidding documents to reflect the amounts of bids we receive has never happened in the history of this country. This [the document] says “you don’t need to have all this money for bid security, you don’t need to find such resources”. As a result, a number of small businesses have been able to enter the market and we continue to move forward, ”he said.
Using data and information from the new NPTAB website (www.npta.gov.gy) and the number of small entrepreneurs listed who were awarded contracts for this year, Balgobin said it was ” evidence ”that the initiative was working.
“When you look at that [the website] you will see the number of people winning contracts for the first time and the pool gets bigger. That’s the whole objective: to broaden the pool of candidates so that more people benefit from the services provided to the government, ”he said.
“As more and more people understand, the suspicions and fears that they had in the past – that they are small and that they cannot compete with the big entrepreneurs and that only the big entrepreneurs got – this will subside, until they start to understand that ‘Hey, there is a market and an opportunity here for me’, ”he added.