Report of the Committee on Government Procurement on best practices
for promoting and facilitating the participation of SMEs
in government procurement

Decision of the Committee on Government Procurement of 9 October 2024

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Article XXII.8 of the Agreement on Government Procurement 2012 (GPA 2012), which tasks the Committee to undertake the Work Programmes, states that "the Committee shall undertake further work to facilitate the implementation of this Agreement.". In its Decision of 30 March 2012[1], the Committee adopted a Work Programme for SMEs containing five elements:

1._    Initiation of Work Programme on SMEs;

2._    Avoidance of Discriminatory SME measures;

3._    Transparency Programme and SME Survey;

4._    Assessment of the Results of SME Survey and Implementation of Its Outcome, and

5._    Review.

The first stages of the work have been completed, including the circulation of a small and medium enterprise (SME) survey pursuant to paragraph 3.2 of the Decision. The majority of Parties to the GPA 2012 replied to a questionnaire seeking information regarding the measures and policies used to assist, promote, encourage or facilitate participation by SMEs in government procurement. The Secretariat prepared and circulated a compilation of the responses by Parties to the SME questionnaire.^[2]

Paragraph 4.1 of the Decision sets out that "the Committee shall identify the measures and policies that it considers to be best practices for promoting and facilitating the participation of SMEs of the Parties in government procurement and prepare a report that includes these best practices and a list of the other measures". Such practices could be applied to covered procurement as the Work Programmes are intended to facilitate implementation of the Agreement.

Taking note of this mandate and the existing GPA 2012 principles, the Committee provides the following indicative list of best practices. This list contains some best practices put forward by Parties and is non-exhaustive. As the Parties have not engaged in, nor provided an assessment of these measures, the list includes measures and policies that are considered useful for promoting and facilitating SME participation in government procurement, as covered by the Agreement. At the present stage, the Parties have not agreed on a list of other measures, as required in 4.1 of the Decision.

Among the practices listed in Annex I to this report, Parties could decide which practices to apply, based on their needs and suitability for their environment.

This report is without prejudice to the rights of Parties under the GPA 2012.

Considering the various nature of the measures, they were grouped in several headings:

1._    Enhanced transparency;

2._    Reduction of administrative burden;

3._    Procurement opportunities for SMEs, including through proportional qualification and selection criteria; and

4._    Enhancing the professionalisation of procuring entities as well as the cooperation and dialogue with SMEs.

Some suggested practices may fall under more than one of the headings. The order of the listing does not reflect the importance, efficiency or effectiveness of the measures and policies.

Annex I

Practices concerning measures and policies useful for promoting and facilitating the participation of SMEs in government procurement

1  Enhanced transparency

Transparent, open and fair measures regarding government procurement are the precondition to functioning and SME-friendly government procurement, thereby contributing to increased SME export opportunities and competitiveness and reducing unnecessary obstacles to international trade. Enhanced transparency to be ensured through visible, easy and quick access to procurement information and opportunities.

1.1.  Providing information for SMEs through special websites designed to help SMEs (such as "how to" videos or SME-specific guides, access to open data, etc.) to understand the procurement process.

1.2.  Ensuring the online publication of government procurement measures (legislation, regulations and policies).

1.3.  Promoting the use of electronic tools in government procurement (from notification to submission and the following stages), free of charge.

1.4.  Making publicly available, by recording and putting online, public industry engagement and related question and answer sessions. For example, record and publish pre-solicitation conferences or "Industry Day briefings" and all related questions and answers.

2  Reduction of administrative burden

Administrative burden is a major obstacle for participation in government procurement for all companies, in particular for SMEs.

2.1.  Using e-procurement systems by procuring entities in a manner so that it ensures simplified and shortened processes, and reductions in red-tape and administrative burdens.

2.2.  Using online supplier registrations, standing price quotations, and purchasing schedules.

2.3.  Streamlining documentation requirements by allowing SMEs to self-declare compliance with qualification criteria and/or by eliminating requirements for official government-provided documentation.

2.4.  Reducing the number of procurement portals SMEs must access by integrating various functional systems such as registration, payment systems, tender documentation release and submission systems.

2.5.  Eliminating in-person requirements in order to submit a bid and submit for payment.

2.6.  Providing electronic access to all tender information including tender notices, bid documents and contracting forms and resources such as templates, checklists and other supporting tools.

2.7.  Establishing multi-use lists to reduce administrative burden of SMEs in submitting tenders of similar nature.

2.8.  Establishing procedures that require government agencies to review regulations on an as needed basis for their impact on SMEs and consider more flexible and less burdensome alternatives.

3  Procurement opportunities for SMEs, including through proportional qualification and selection criteria

SMEs can supply quality goods, services and innovative solutions, but for this they need the appropriate conditions. Overly demanding qualification and selection criteria, in particular economic and financial requirements, can constitute a barrier to participation of SMEs in government procurement.

3.1.  Providing an option for contracting authorities to structure larger contracts into lots in full respect of the GPA 2012 obligations, and with the view to reinforce competition and facilitate access of smaller undertakings to public procurement contracts. Structuring into lots shall not be discriminatory or used with the intention to lower the estimated value of the contract below the threshold so as to circumvent the application of procurement rules.

3.2.  Raising awareness about opportunities for joint bidding and subcontracting for government tenders in order to facilitate access of smaller undertaking to important government procurement contracts, for example, through online resources that connects SMEs to prime contractors (winning bidders) to supply goods or services.

3.3.  Providing room for SME innovations by refraining from developing overly prescriptive specifications that do not impact service delivery or quality and which may advantage one supplier over another, and by including opportunities for the bidders to submit an alternative in their bids.

3.4.  Requiring prompt payment by procuring entities, including in subcontracting. Ensuring contract types and payment structures used do not discourage SME's participation in public procurement.

3.5.  Identifying the risks, mitigating and distributing them appropriately between the procuring entity and business.

3.6.  Ensuring that procuring entities consider the financial capability of SMEs in developing tender requirements, such as the bid bond and guarantees values.

3.7.  Ensuring that insurance costs and any other conditions for participation are not unnecessarily prohibitive for SMEs, (including through providing government-backed bond guarantees to allow SMEs to participate in government procurement).

4  Enhancing the professionalisation of procuring entities as well as the cooperation and dialogue with SMEs

The implementation of all elements mentioned under previous headings require professional procuring entities, while a robust supply chain of SMEs in government procurement requires dedicated engagement and education by government authorities.

4.1.  Tasking an agency or otherwise establishing a function to identify and reduce barriers to SME's access to government procurement, to develop guidance for procuring entities on how to develop SME–friendly technical specifications, to share information across procuring entities, and to develop and share guidance on SME's access to procurement opportunities.

4.2.  Providing SMEs with a point of contact (phone, email and/or web form) to raise questions on how to do business with the government.

4.3.  Using different formats, such as interview sessions for complex contracts, letters, etc., to debrief businesses after they have bid for government contracts.

4.4.  Creating an advisory committee, co-chaired by the public and private sector, along with membership from industry associations, to discuss potential improvements with government procurement processes.

4.5.  Building partnerships with business associations and other organizations, participating in industry events/trade shows, and conducting seminars with SMEs to enhance their understanding on how to do business with the government.

4.6.  Consulting regularly with SME suppliers on barriers or other concerns in government procurement, including through surveying SMEs on such barriers or concerns.

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