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2010/SMEWG31/008 Agenda Item: 9.1

APEC Survey on Business Environment: Government Procurement for SMEs

Purpose: Information

Submitted by: Malaysia, Mexico

31st Small and Medium Enterprises Working Group Meeting

Gifu, Japan29-30 September 2010

10/27/2010

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APEC Survey on BusinessAPEC Survey on Business Environment:

Government Procurement for SMEs

Report by Malaysia/Mexico

Outline

Objective

Government Procurement Policy

Participation of SMEs in GP

WP 2010/SME Corp. (2)

Way forward

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ObjectiveObjective

Why the survey was required?

In response to best practice KPI for BusinessEnvironment:Project KPI Medium term KPI

Government Procurement assumes dual roles:

j

To promote GovernmentProcurement from SMEs

To track number of SME suppliers toGovernment

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Provider of  market access for SMEs

Platform for SMEs to develop capability and capacity to venture into 

global market

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Identify GP policy practice

Objective of survey…

Identify GP policy practice 

Compare benefit towards supporting SME development

Relate to KPI of Business Environment

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• Australia

• Brunei Darussalam

“Thank you” to 14 economies…

• Malaysia

M i• Brunei Darussalam

• Canada

• Chile

• Chinese  Taipei

H K

• Mexico

• New Zealand

• Peru

• Singapore

• Hong Kong

• Japan

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• Thailand

• Viet Nam

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Government Government Government Government Procurement Policy Procurement Policy Among APEC Among APEC E iE iEconomiesEconomies

Out of 14 economies …

..ONLY 5 with specific GP policy relating to SMEs

Australia Commonwealth Procurement Guideline

Chinese Taipei

Government Procurement Law Article 22 & 97

Japan Direction on Government Authority Contract

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MexicoNational Agreement to benefit Family Economies & Employment “Made in Mexico”

Peru MSE Law 28015

10/27/2010

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Out of 9 economies …

..only 3 intends to introduce new policy in 2011 - 2012

• Brunei SME Policy is being draftedBrunei

• Directive on SME Federal Procurement by the Public Works and Government ServicesCanada

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Services

• Green Lane Policy for SMEsMalaysia

GP are classified as…

GOODS SERVICESWORKS OR 

CONSTRUCTION

.. 3 major classifications

• General supplies (e.g. computer hardware, food and beverages, office equipment)

• Non‐consultancy (e.g. repairs, maintenance services)

• Consultancy (e.g. engage manpower

CONSTRUCTION

• Civil engineering, demolition, plumbing and sanitary works 

• Building and road constructions

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manpower, consultants in research, management etc)

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Total of 6 economies …

.. are signatory to the WTO GP Agreement

Canada, Chinese Taipei, Hong Kong, Japan, Peru and Singapore

and 9 economies offer GP under FTA negotiation…

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Australia, Canada, Chile, Chinese Taipei,Hong Kong, Japan, Peru, Singapore and Viet Nam

Specific policy introduced for minority/ selected group…

.. are practiced by 5 economies, namely:

F b i i d ICT tFor aborigines and ICT sector

Procurement strategy for aboriginal business

Preferential treatment for products by disabled, indigenous people, charitable non‐profit organisation or 

inmates

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inmates

For cooperatives licensed as “Government Procurement Eligible Cooperative”

Preferences to Bumiputera & local manufacturers 

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Participation of Participation of SMEs in GPSMEs in GP

Specific registration for SMEs before supplying …

.. applicable to only 6 economies:

• Prequalifying exam before certificationBrunei Darussalam • Prequalifying exam before certificationBrunei Darussalam

• Entrepreneurship centre will assist SMEs to comply to Government requirementChile

• All Government authoritiesJapan

•Ministry of Finance for supplies and services

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Ministry of Finance for supplies and services

•Contractor Service Centre  and Construction Industry Development Board for works procurement

Malaysia

• National Register of Suppliers to GovernmentPeru

• Comptroller General’s Department (classification is based on experience and financial strength)

Thailand

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Channel of advertising contract opportunity…

Centralised WebsitesSpecial invitationFacts..

13 out of 14 

Newspaper

economies use centralised website 

to advertise

11 out of 13 economies use organisation 

website to advertise

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Organisation Websites

Estimated percentage of SME participation in GP… Average Percentage 

39.8%

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Hong Kong, Malaysia, New Zealand, Singapore and Viet Nam do not segregate data on suppliers to GP by size 

of companies

Average Percentage 40.9%

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Payment by Government…

Payment Medium:

• 1st choice –

Payment period

• 6 economies

Compensation

• 3 economies

• Pay penalty/1 choice Bank transfer

• 2nd choice –Cheque

• One economy credit card 

6 economies within 30 calendar days from  invoice job completion

• One economy payment in no more than 20 

Pay penalty/ interest for delayed payment

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days

• One economy record payment within 14 days

Way forwardWay forward

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Specific GP policy directly impact on SME participation and contribution to the

Findings…

participation and contribution to the economy

Policy improves market access and SME’s capability

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Economies need to monitor data compilation on SME contribution

Economies should consider…

Importance of formulating 

specific policy to continue 

supporting SME participation in 

Adoption of a electronic media as a channel to promote GP 

t it

Assessing the growth, capability and capacity of SMEs that has 

been appointed as long term p p

GPopportunity 

gsuppliers 

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10/27/2010

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