An expert’s guide on how SMEs can better manage the Government’s procurement process.

Government is the single largest procurement body for goods, services and works through its different departments and ministries. The public procurement system in Uganda had been centralized and all procurements were done centrally in the 1980s. However, due to the size of the government that has grown over the years, government adopted a more decentralized procurement system because of the inadequacies of the more centralized procurement system. A budget is thus set up annually to tally incomes with government expenditure on all areas, procurement inclusive for every single government department and/or ministry.

Over the years, government has contracted a number of companies for procurement projects for goods, services and works and over the years, SMEs have continued to harbor an interest in government procurement projects; many of them having vague knowledge about the government procurement. Today we give you a few tips to help you sign that contract for your next big assignment.

1. Understand the Process

This is the first and most critical stage of managing the government procurement process. Like any other institution, the Government of Uganda (GoU) has a procurement procedure or process which should be followed through to the end in all its procurement projects whether it is goods, services or works. The purpose of the procurement process or cycle is to encourage competition among suppliers, professionalism, good business ethics and non-discrimination among others. The PPDA is a procurement regulatory body that governs government procurement process also called public procurement process. It was also established to set standards, monitor compliance and carry out audits and investigations where necessary.

As Uganda is a developing country, there have been many continuous changes to the public service procurement function. The procurement process has recently undergone many reforms and these reforms have not been limited to regulations only, but also to public procurement processes methods and the workforce. The reforms have been as a result of joint effort with various development partners like the World Bank. Understanding this and keeping tabs with the new developments in the process is key to any SME with the intention of doing business with the government.

Broadly speaking, the Government’s procurement process consists of a needs assessment, an invitation to bid, receiving and bid evaluation and contract award and management.

Once you have the procurement process, particularly the government’s procurement scope and procedures at your fingertips it will be easier to identify barriers as well as the opportunities for your SME regardless of your sector. Understanding the procurement process will also help you analyze your own capacities as well as qualifications and other business requirements such as incorporation documents, and business ethics among others.

2. Be keen on the relevant laws and regulations 

Legal considerations and provisions must be clearly complied with. Proper registration of companies with clear documents, compliance with employment laws, clear financial (book) records, and submission of tax returns among others should be considered. In other words, all your operations and processes must be legal. Once you sign the contract, it is also important that you understand your responsibilities clearly. It is very common for many organizations to file away the contracts once it is awarded without thoroughly reading and understanding the terms and conditions of the contract. Ensure that you read and understand the specifications of the contract, the payment terms of the contract, keep tabs with any changes to the contract among others.

It is well known that people do not like to associate themselves with fraudulent people and schemers, and Governments are in the same mould. Because of this it becomes imperative for whoever is doing business with government to have a clean legal record. Because of that, one needs to remain keen on the relevant laws and regulations.

Also confirm that your company can meet all the criteria put in place for the award of the contract in question.

3. Identify where you can add value

A deep analysis of the government procurement process will clearly help you to identify how you can add value to government through the countless opportunities available. Reviewing of RFPs regularly and checking with all possible sources including newspapers, online procurement notices and even within your own networks will ensure that possible opportunities do not pass you by.

As you seek out these assignments, remember that this is your opportunity to add value to the government through better service delivery and better value for money plus the possibility of more business. Once you identify opportunities, it is time to seek out these assignments through submission of the requested (and required) documents.

Bringing your knowledge and expertise from unique sources in your industry or sector is a strength. Having only knowledge and expertise however is not enough. You should be able to express that in the presentation and structure of your bid documents and the other required documents. As an SME that is interested in finding potential business areas from the government’s procurement process, it is very important to have the capacity to carry out these assignments. Benchmarking yourself against the best in your field will help you know your position and analyze your chances of getting these assignments.

Good governance, disaster preparedness, conflict resolution abilities among others are all qualities that will get you closer to that assignment. And once you figure out the opportunities, you will be able to tell which ones best suit your abilities, capabilities, knowledge and skills.

4. Submit a strong proposal or bid

Company leadership should ensure that proposal or bid preparation is allocated adequate resources both in terms of time and effort (human resources). Always allow for sufficient time to put together an adequately researched and detailed bid or proposal. This will give you a better chance over all the other companies competing for the same assignment. More importantly, understand the workforce requirement, facility requirements plus all the outcomes and repercussions of a successful bid to the company. This will allow you to plan and prepare all the necessities if the contract is awarded to you. Small enterprises should however be selective on bid choices putting into consideration the workload, delivery schedule an expectations of the agency.

 5. Look out for outsourced contracts

The fact is that only one company at a time can be contracted to carry out any particular assignment to either provide goods, services or works for any government project. It is common however for these companies to sub contract certain areas of these assignments either because of their limited capacity or because it is a massive assignment that requires a lot of time and effort. As an SME, failure to sign a contract for that big assignment should not ruin your morale. Instead, you should be on the lookout for sub-contracting assignments as it will build your profile and better your chances of getting similar future assignments.

6. Joint ventures with bigger companies 

A joint venture is an arrangement where two or more firms/companies agree to take on an assignment with clearly defined timelines, goals and objectives to jointly share expenses as well as profits. As a small company, you can benefit from such arrangements because it will enable you to share both risks and costs. Such arrangements may be formal or sometimes very informal such as a handshake. As a small firm however, it is advisable to avoid informal arrangements as the loss is bigger on your side in case the other party breaches their duties.

It is very important to keenly identify which assignments you can handle and then identify the bigger firms that may be interested in such similar assignments and then work on creating clear working agreements (contracts) with these firms as you bid for the assignment together. As a small firm you can either bring your expertise in an area where the bigger firm of interest may not have or add to the capacity in areas where there is a possible shortage. Joint ventures offer small disadvantaged companies an opportunity to handle bigger assignments that they usually do not bid for.

One important caution however, is not to bid for any government assignment without clearly understanding the specifications.

By Sarah Achiro

Sarah_Achiro Sarah recently joined BLEGSCOPE®, as an Intern and has worked as a Marketing Executive for   Riham Foods. She has  interest in finance, accounting and procurement. You can follow her on twitter >> @achirosarah

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