Comments on the report on best practices for promoting and facilitating the participation of SMEs in government procurement

COMMUNICATION FROM THE DOMINICAN REPUBLIC

The following communication, dated 6 March 2025, has been received from the delegation of the Dominican Republic, signed by Carlos Pimentel Florenzán, Director-General of the Directorate‑General of Government Procurement, and addressed to the Chair of the Committee, with the request that it be circulated to the Committee on Government Procurement.

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In addition to extending a warm greeting from the Directorate-General of Government Procurement (DGCP), governing body of the Public Procurement and Contracting System of the Dominican Republic and observer to the _Committee on Government Procurement of the World Trade Organization (WTO) since October 2022, we welcome the publication of the "Report of the Committee on Government Procurement on best practices for promoting and facilitating the participation of SMEs in government procurement" of October 2024 (GPA/CD/6). This report reflects the shared commitment of this plurilateral forum to promote greater inclusiveness and accessibility in government procurement markets.

As an observer to this Committee, we are pleased to share how we are implementing several of the recommended strategies and lines of action through various initiatives and good practices aimed at promoting equal opportunities for MSMEs. Several of these actions taken by the Dominican Republic are presented below, organized under each heading of the report.

1  ENHANCED TRANSPARENCY

"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".

The DGCP has made a Comprehensive Data Monitoring and Analysis System[1] available, which provides open data on the main metrics of the National Public Procurement and Contracting System, in line with the institutional vision of including MSMEs, women and productive sectors. This allows procurement processes, awarded contracts, business activities and government market trends to be tracked.

Furthermore, the MSME Portal[2] has been launched, which contains information on government market trends that allows MSME state suppliers to identify business opportunities based on data. The Portal sets out the processes that have been launched by public institutions, the main items procured, as well as the products that entities have included in their annual procurement and contracting plans. Thus, companies can check on processes that are planned, specifically aimed at MSMEs and MSMEs led by women.

In addition, the DGCP's Virtual Campus[3] provides training courses and workshops aimed at state suppliers and other stakeholders in order to build their technical and regulatory capacities in relation to the National Public Procurement and Contracting System (SNCCP) so that they can submit successful bids and secure greater business opportunities with the Dominican State. Explanatory videos on how to do business with the State are also published on the institution's social media channels, providing guidance and information in an interactive and user-friendly manner.

Other tools have been created to enable a greater understanding of the Public Procurement System, such as a certification guide for MSMEs led by women, a procurement guide for industrial MSMEs, and various instructions.

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

The DGCP web page[4] contains all the tools that constitute the legal and regulatory framework of the National Government Procurement System, including:

§_   Laws, decrees and regulations related to the SNCCP.

§_   Rulings in the light of investigations and on complaints.

§_   Policy resolutions.

§_   Circulars with general instructions.

§_   Threshold resolutions.

§_   Procedure manuals.

§_   Standard document templates.

§_    Other relevant documents such as instructions, guides, the methodology for the annual procurement and contracting plan, and the code of ethics.

In addition, each time that a regulation is issued or updated, or a process is changed, this information is duly disseminated through the digital channels used by the governing body, the registered contact points of suppliers and the procuring institutions, and social media channels.

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

The Electronic Public Procurement System (SECP)[5], administered by the DGCP, is a digital platform that enables public institutions to carry out the entire procurement process online, from the planning and publication of invitations to tender to the management of the contract. Suppliers and MSMEs have access to the procurement processes in a virtual office and receive automatic notifications about purchases related to their business activities, and citizens can see what the government is going to procure, when, from whom, how and for how much. This allows both barriers to access to the government market and costs to be reduced.

In addition, various technological tools have been created to provide citizens and companies with details on all stages of the procurement processes. These tools include:

·_              LiciCompras: A virtual assistant on the instant messaging platform Telegram, through which users can consult information on the requirements and applications for the State Supplier Register (RPE), download their RPE certificate, review their contract history, processes and statistics related to procurement units, and download the tender documents, among other features.

·_              ContratacionesRD mobile app: An application available on the App Store for iPhone and on Google Play for Android, which allows suppliers and the general public to access information on government procurement processes of interest to them, activate notifications and view their RPE status. It also provides information on available training courses, open data and other features such as setting up push notifications by categories for procurement procedures, modalities or prioritized institutions.

·_              PubliCompras: This is an auto-posting bot on X and Instagram that shares the competitive procurement processes published on the SECP.

Furthermore, the DGCP is in the process of developing Efi-Compras RD, an e-commerce portal where minor purchases and purchases below the threshold will be managed.

"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".

The current regulations stipulate that government procurement procedures in the Dominican Republic include a clarification phase, to ensure that the procurement rules are fully understood and, as a result, to review anything that is unclear and improve the drafting at the request of interested parties or ex officio. Interested parties can request clarifications from the procuring institution through the SECP during working days and hours, before 50% of the tender submission period has elapsed.

The procuring entity, together with experts, will respond to the clarification requests through circulars. Clarifying circulars will be issued: (a) with the questions and answers only, without identifying who made the request; (b) during working days and hours, before 75% of the tender submission period has elapsed; and (c) when the consultation concerns technical aspects, it should also be signed by the designated experts.

Clarifying circulars will be published on the SECP, meaning that all bidders will be notified. In addition, the institution will send the circulars by email or other means to all those who have shown an interest in participating, pursuant to paragraph I of Article 20 of Law No. 340-06 and amendments thereto.

When the complexity of the rules of procurement so warrant, the procuring institution may, ex officio (which may be pre-established in the timetable for the procurement process) or at the request of a party, convene an in-person or virtual hearing with interested parties to provide clarifications and respond to their concerns. Interested parties will not be required to attend the hearing. Minutes of this hearing must be prepared that record the questions and answers purely for purposes of clarification. These minutes will be signed by the body responsible for the tender process, shared with all companies that have expressed an interest and published on the SECP.

2  Reduction of administrative burden

"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".

Efforts have been made by the DGCP to ensure that all procuring entities in the public domain use the system provided to launch invitations to tender and manage procurement procedures. In the period August 2020-August 2024, a total amount of DOP 828.997 million (USD 13,596.36 million[6]) was processed using the SECP, for a total of 304,888 contracts awarded. In addition, 253,066 procurement processes were disseminated through the SECP and more than 1 million bids were received from suppliers.

It should be noted that in the period August 2020-August 2024, over 235 institutions started using the SECP, making a total of 560 institutions that managed their procurement processes through this platform. Of these, 289 are central government bodies, 185 are local government institutions, 82 are hospitals and 4 are extra-governmental bodies.

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

The State Supplier Register in the Dominican Republic can be accessed online through the DGCP web page.[7] This portal explains in detail the requirements that interested parties have to meet, the steps to register, and how to provide the requested data and attach the required documents. It also contains instructions and contact information in case of questions or concerns.

With regard to price quotations, the DGCP has made the Price Information System available to procuring entities, which allows them to check the costs of work that has been tendered out, thus ensuring the principles of efficiency, economy and flexibility.

Regarding purchasing schedules, the DGCP has established the methodology for public sector institutions to prepare annual plans and programmes for the procurement of goods, services and works, which in addition to being available on the SECP and on the MSMEs portal, must be published by all entities on their transparency portals.

For the period January-August 2024, 50% of the processes disseminated through the system were properly planned in the Annual Procurement and Contracting Plans (PAAC) submitted by procuring entities, amounting to 63,129 planned processes for that period.

"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".

Procuring entities launch procurement processes through the SECP. The tender documentation and all other documents, reports and actions related to the process can also be accessed in SECP. Suppliers can also submit their bids and documents required by the procuring entities via the same System.

The SECP is integrated with the Financial Management Information System (SIGEF) at the stages of pre-emptive payments and commitments, as well as the registration, by the procuring institution, of invoices that result in accruals. Thus, the SECP covers the whole payment cycle, allowing both the procurement unit and the winning bidder to monitor the payment process and track, from creation to approval, the accrued payments, the creation and approval of the payment order and the executed payment order.

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

Article 109 of Implementing Regulations No. 416-23 provides that "bidders will submit their technical and financial bids in electronic form through the Electronic Public Procurement System (SECP) or on paper" and specifies that both formats are equally valid.

In the period January-August 2024, more than 60% of the total number of bids were submitted by suppliers digitally, indicating a shift in favour of digitalization in the National Government Procurement System.

Source: Directorate-General of Government Procurement.

"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".

These elements are integrated into and available on the SECP, where entities can locate all the information and documentation related to the procurement processes including tender documentation and specifications. In addition to being published on the SECP, notices and information are available on the technological tools LiciCompras, PubliCompras and the ContratacionesRD app, which are open access and free of charge. The DGCP also has standard documents on its web page for procuring entities and for suppliers, as well as guides and instructions.

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

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.

Article 88 of Implementing Regulations No. 416-23 for Law No. 340-06 on Government Procurement stipulates that "in cases in which the same invitation to tender covers a large number of units of the same good, service or work, the total quantity may be divided into different sets or lots".

In addition, Article 66 of the draft law to update the General Law on Government Procurement, submitted by the DGCP to the National Congress, provides that "for all procurement under the present law, in the case of goods, services and works that are individually identifiable, tenders may be carried out by lots, in the event that prior studies have identified this possibility in order that micro-, small and medium-sized enterprises (MSMEs) may be included, without the public interest being affected. In such cases, the tender documentation must establish the lots to be awarded and whether it is possible to make partial awards or not, according to the nature of the procurement to be carried out".

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.

The current legislation establishes the criteria of sustainability and value for money, allowing for the submission of alternatives that promote efficient solutions for public entities. In addition, bearing in mind the commitment to foster innovation at the national level and facilitate the participation of various productive sectors in the government market, the draft to update the General Law on Government Procurement submitted to the National Congress proposes incorporating the Innovation Partnership into the law: "Procuring institutions may develop selection procedures through an innovation partnership, when the subject of the tender is being acquired to meet needs through solutions that are not available in the market and that depend on the development of innovative goods, services and works".

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.

In the case of processes aimed at MSMEs, procuring institutions must deliver an initial advance of 20% of the value of the contract, purchase order or service, at the request of the supplier. This mechanism allows the supplier to maintain its financial and operational capacities, thereby encouraging their participation in order to facilitate the implementation of the procured product or service.

In addition to this, the DGCP works in coordination with the Ministry of Agriculture, the Agricultural Bank, the Council for the Promotion of and Support for Micro-, Small and Medium-Sized Enterprises (PROMIPYME) and the Supérate (Get ahead) programme, on plans, programmes and projects to acquire agricultural products from small producers through the National Price Stabilization Institute (INESPRE). As a strategic entity in the regulation of food prices and in agricultural policy, INESPRE operates under special provisions that ensure procurement flexibility and allow direct payments to be made to suppliers, as was the case for the Villa Poppy[8] and Casa Sombra[9] cooperatives.

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

Under the National Government Procurement System of the Dominican Republic, the procuring entity is responsible for the procurement procedures being conducted in a competitive and efficient manner, ensuring completion of the contract and payment within the specified time frames. The company awarded the contract must assume responsibility for the execution of the contract, meeting the deadlines and specified requirements.

In order to balance the risks between the parties, mitigate technical risks and ensure proper compliance, the tender documentation must set out expressly, and in an objective, concise and measurable way, the evaluation criteria and requirements that the bids must meet. To ensure that the tender documentation is prepared in accordance with the elements described, the DGCP has made available standard templates and documents to be used, which are also checked by the decision-making body.

In terms of financial risks, the procuring entities must verify the budgetary availability when launching the procurement processes and companies submitting bids must prove they are solvent and have capacity.

To mitigate contractual risks, the Law provides that "contracts must include clear requirements and mandatory clauses setting out the background, objective, time frame, price, price adjustment, financial and economic balance, guarantees, amendments, termination, ruling, arbitration, annulment, penalties and rebates, if this has been agreed, contract settlement, dispute settlement and other relevant areas in line with the nature of the procurement". In addition, Regulation No. 416‑23 provides that, among other elements, contracts must include "the assessment of the foreseeable risk and the framework under which it will be distributed between the parties".

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

Article 158 of the Implementing Regulations of the Law provides that, in the processes aimed at MSMEs, industrial MSMEs and women-led MSMEs, "as a general principle, the deadlines and requirements for the submission of bids, delivery of goods, provision of services and execution of works, must be reasonable, in accordance with the response capacity of the sector, so that they do not constitute a barrier that prevents or limits the participation [of the MSMEs]".

Furthermore, considering the financial capability of companies in processes aimed at MSMEs, a reduction in the amount of the contractual performance guarantee is applied, which will be 1% of the total amount of the award.

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

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.

Within the organizational structure of the DGCP there is the Directorate of the Promotion and Development of the Government Market, whose main function is to facilitate the development of an inclusive and sustainable government procurement market in the national territory, through mechanisms that ensure the equality and participation of all productive sectors by promoting regulations, technical assistance and specialized training, and identifying and implementing good practices that foster entrepreneurship and business development.

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.

The DGCP uses different channels such as social media, workshops and contact forms available online to respond to any of the general public's queries or concerns, with the objective of providing support and guidance on aspects related to the government market.

The Directorate of the Promotion and Development of the Government Market may also be contacted directly via its web page, by telephone on 809 682 7407 (extensions 3195 and 3198) and by email (mercadopublico@dgcp.gob.do).

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

Government procurement procedures include a clarification phase (see point 1.4), during which companies can express their concerns that the entity must respond to by means of clarifying circulars sent to all bidders. In the case of complex contracts, the legal framework allows for the possibility of convening a hearing with bidders in order to provide clarifications.

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.

The DGCP has formalized partnerships with the Dominico-International Federation of Women Entrepreneurs (FEM), the Dominican Association of Women Entrepreneurs (ADME) and the National Association of Women Entrepreneurs, Executives and Professionals (ANMEPRO)[10], with the aim of creating a committee to ensure accountability and make recommendations, which is convened by the DGCP on a six-monthly basis in order to provide a report to the signatory institutions on the actions taken and progress made on themes related to the inclusion of MSMEs led by women in government procurement.

Furthermore, there is an agreement between the DGCP, the Centre for Industrial Development and Competitiveness (ProIndustria)and other institutions, in the form of the "ProIndustria Intersectoral Board", the main aim of which is to foster competitiveness and industrial innovation in the Dominican Republic, stimulate the productive sectors of the national economy, incubating new industries and promoting the holistic development of existing industries, with a view to achieving greater competitiveness and diversification of the country's economic activities, raising the population's standard of living, and creating and fostering all support programmes and policies for the industrial manufacturing sector, with the aim of making it more competitive.

Similarly, the DGCP has an arrangement with the Santo Domingo Chamber of Commerce and Production[11], the objective of which is to encourage the participation of companies where women account for over 51% of shareholders, with regard to government procurement and contracting of goods, services and works.

Recommendations and possible opportunities for improving the Government Procurement System are being discussed in these forums.

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.

To bolster training and awareness-raising efforts in relation to the participation of MSMEs in the National Government Procurement System, the DGCP has worked in coordination with the Ministry of Industry, Trade and MSMEs (MICM), the Ministry for Women, ProIndustria, the Dominican Republic Export and Investment Centre (ProDominicana), the Cooperative Development and Credit Institute (IDECOOP) and associations of women entrepreneurs such as FEM, ADME and ANMEPRO, to ensure women's inclusion in the government market.

Actions have also been undertaken with other professional associations that are strategic partners and encourage the DGCP to broaden the scope of state suppliers. These include the Dominican Confederation of Micro-, Small and Medium-Sized Enterprises, INC (CODOPYME), the National Association of Young Entrepreneurs (ANJE) and the provincial Chambers of Commerce, among others.

Furthermore, with regard to trade shows to link government institutions with the government market, the DGCP coordinates Business Round Tables[12] to promote the participation of MSMEs, women, productive sectors and suppliers in general in government procurement processes. This initiative aims to create spaces for exchanging information between sectors and the state procurement units, where personalized interviews are conducted between both parties so that MSMEs can offer their products and services, having been informed about state procurement requirements.

As of July 2024, the DGCP had held 23 business round tables, 10 in the National District, 6 in the northern region and 5 in the southern region, with a total of 24,448 business interviews involving 440 state procurement units and 3,117 participants, more than 40% of whom represented women-led MSMEs.

With regard to training, the DGCP organizes virtual and face-to-face seminars aimed at suppliers and those interested in the government market. During the period August 2020-August 2024, 546 workshops were held for suppliers and the general public, with a total of 11,928 trained participants. These seminars have focused on how to sell to the State, the online registration of suppliers, the online submission of bids, and industrial MSMEs in government procurement. Training courses on the Implementing Regulations of the Law have also been offered.

This set of initiatives has enabled MSME state suppliers to be awarded contracts totalling DOP 270.436 million during the period August 2020-August 2024, or 33% of procurement contracts, exceeding the quota of 20% established by Law No. 340-06 for procurement processes aimed at this sector. The DGCP is committed to building the capacities of MSMEs in the Dominican Republic and will continue to promote initiatives and regulations that ensure a competitive and inclusive government market.

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