SENSITIZATION OF THE PRIVATE SECTOR ON THE CSME PUBLIC PROCUREMENT REGIME

THE CSME PUBLIC PROCUREMENT REGIME – OPPORTUNITIES AND CHALLENGES FOR THE PRIVATE SECTOR

BY

Philip McClauren,

Deputy Programme Manager, CSME

June 28, 2016

Knutsford Court Hotel

Kingston, Jamaica

CONTENT OF PRESENTATION

Objectives of the CSME Public Procurement Regime

What Areas and Entities are Covered

Scope of Application of the Regime

The CSME Public Procurement Thresholds

Public Procurement Opportunities in Member States Challenges andOpportunities – Current Situation and under the Implementation ofthe Regime

OBJECTIVES OF THE CSME PUBLIC PROCUREMENT REGIME

Establish the conditions necessary for full integration of the nationalprocurement markets of Member States into a single, unified and open area forPublic Procurement to bolster the CSME

Creation of the necessary competitive and non-discriminatory conditions tofacilitate achievement of value for taxpayers’ money.

Provision of opportunities for access to a single market with regional salesopportunities.

Strengthening the competitiveness of the regional supplier base andencourage the rational use of scarce resources.

WHAT ENTITIES AND AREAS ARE COVERED

Entities

Central Government Entities

Sub-Central Government Entities

Other State Owned companies that procure goods, services and works by using public funds

What is Covered

Goods.;

Services and

Works

SCOPE OF APPLICATION OF THE REGIME

Public procurement that are at and above the agreed thresholdsfor goods, services and works

Public procurement that are not otherwise excluded from coveragein paragraph 2 or in the Annex to this Protocol.

The CSME PUBLIC PROCUREMENT THRESHOLDS

REGIME GOODS (US$) SERVICES (US$) WORKS (US$)

FRIP 100,000 100,000 1,000,000

Proposed Thresholds 150,000 150,000 3,000,000

Comparative Thresholds in the CARIFORUM –EC EPA

CARIFORUM – EC EPA 248,000 248,000 10,400,682

European Union: Central

Government (Directive

2004/18/EC)

€134,000 €134,000 €5,186,000

Other Public Sector Authorities€207,000 €207,000 €5,186,000

PUBLIC PROCUREMENT OPPORTUNITIES IN CARICOM MEMBER STATES –CURRENT SITUATION

Public Procurement Opportunities for the Private Sector including SMEs’

Some Member States have implemented a procurement policy which include for example: offsets, set aside system, margin of preference, quota or a percentage of annual procurement expenditure for SMEs

There is also a policy in some Member States to allow an undisclosed fair share of public procurement of goods and services for MSMEs’

There are Member States that have Set Aside between 20-40 percent ofprocurement budgets for SMEs in order to access to procurement opportunities.

PUBLIC PROCUREMENT CHALLENGES IN CARICOM MEMBER STATES –IMPLEMENTATION OF THE REGIME

Prohibition of the imposition of offsets in the qualification andselection of suppliers for tender awards in relation to CARICOMSuppliers

However, a margin of preference may be applied to extra-regionaltenderers

CARICOM suppliers in relation to public procurement should begiven a different meaning than what obtains in Article 32 of the RTC

SMEs and larger companies can engage in joint-bidding on cross-border procurement opportunities

PUBLIC PROCUREMENT OPPORTUNITIES IN CARICOM MEMBER STATES – IMPLEMENTATION OF THE REGIME

Procurement opportunities below the threshold would giveMember States policy space for domestic suppliers

National Treatment for all CARICOM suppliers in relation toprocurement opportunities in Member States

Opportunities for development of joint ventures, consortiums,associations, joint bidding on procurement opportunities withsuppliers in Member States

PUBLIC PROCUREMENT OPPORTUNITIES IN CARICOM MEMBER STATES –IMPLEMENTATION OF THE REGIME

Procurement opportunities funded by International Financial Institutions (IFIs),Third States and other Agencies are not covered by the Regime. Member Stateswould be able to impose offsets permissible by these agreements.

Request for quotations (RFQs) and Shopping under these IFI arrangementswould give Member States the latitude to consider a fair share of procurementexpenditure for domestic suppliers.

The Private Sector can also participate in procurement opportunities funded byIFIs both through thresholds that are at National Competitive Bidding (NCB) andInternational Competitive Bidding (ICB) levels.

PUBLIC PROCUREMENT CHALLENGES IN A CSME PROCUREMENT REGIME –INFORMATION AND COST CONSTRAINTS

Lack of information and awareness on procurement opportunities

Onerous Pre-qualification criteria and volume of information required to fillout bidding documents

High cost associated with Security Bids and Bid Guarantees

Lack of capacity to bid on high level procurement and therefore sub-contractors for most projects do most of the work for less than full payment

Over-emphasis on price which gives larger suppliers/companies a competitiveadvantage over SMEs for public contacts.

PUBLIC PROCUREMENT OPPORTUNIITES IN A CSME PROCUREMENT REGIME – INFORMATION AND OTHER RELATED MATTERS

Development of the Community Public Procurement Notice Board (CPPNB) for e-publication and e-awards of procurement opportunities

Centralized Register of Community Suppliers and National Register of Suppliersin Member States

Integration of CPPNB with existing National eProcurement Portals (Jamaica andBarbados)

Provision of National eProcurement Portals in other Member States forpublication of procurement opportunities including those below the thresholdsand procurement opportunities funded by IFIs

PUBLIC PROCUREMENT OPPORTUNIITES IN A CSME PROCUREMENT REGIME – INFORMATION AND OTHER RELATED MATTERS

Availability of information regarding Public ProcurementOpportunities in all Member States

Simplified Bidding document forms available online for eachMember State making the application process less onerous

Transparency and accountability in the bidding and awards process

The availability of historical data on Public Procurement which caninform policy on SMEs

CLOSING THOUGHT

The integration of fourteen (14) national markets into a singleunified CSME regional procurement market

Opportunities for the regional private sector to access publiccontracts for goods, services and works at an estimated value ofapproximately USD $25 billion to USD $32 billion per annum

E-Learning platform with courses, videos and demos and trainingopportunities for employees of the private sector in publicprocurement.

END OF PRESENTATION

THANK YOU