SMEs want help to secure public contracts: Business groups

A woman seen in mask at the waterfront promenade outside Marina Bay Sands on June 6, 2020.
A woman seen in mask at the waterfront promenade outside Marina Bay Sands on June 6, 2020.PHOTO: ST FILE

Singapore manufacturers and business groups have lauded a government minister's suggestion that local companies be given a hand to scale up by helping them to secure public-sector contracts.

Winning such contracts will give these companies, battered by the economic fallout from Covid-19, a better chance to tide over the tough times, they told The Straits Times.

Fulfilling such contracts will also build up and strengthen their track record, which would help them compete internationally, an outcome that will be particularly beneficial for start-ups and small and medium-sized enterprises (SMEs), they added.

The business groups and entrepreneurs were responding to Second Minister for Trade and Industry Tan See Leng's suggestion that policies can be better adapted to help local companies emerge stronger from the Covid-19 crisis.

Speaking in a radio interview last Wednesday, Dr Tan, who is also Second Minister for Manpower and Minister in the Prime Minister's Office, had said: "No particular policy can be that precise. But I think we can better adapt, we can better tweak (policies) to reach out to an ever-enlarging group of entrepreneurs in Singapore.

"In terms of government procurement policies, we can provide them with a lift up, that provides them with a form of credentialing.

"Then, they can compete internationally, having been certified and validated by the big government-linked companies here in Singapore."

Agreeing, Association of Small and Medium Enterprises president Kurt Wee said: "Sometimes, start-ups have very refreshing or brand-new products or services that they also need to prove to the market."

He added: "Government procurement can give them a leg-up in establishing themselves."

Singapore FinTech Association president Chia Hock Lai said that an existing accreditation programme by the Infocomm Media Development Authority to help the Government and large companies identify vendors has done well.

He suggested that similar programmes can be rolled out to cover more sectors.

GIVING THEM A LEG-UP

Sometimes, start-ups have very refreshing or brand-new products or services that they also need to prove to the market. Government procurement can give them a leg-up in establishing themselves.

ASSOCIATION OF SMALL AND MEDIUM ENTERPRISES PRESIDENT KURT WEE, on local companies securing public contracts.

His association started a credentialing programme in April to help the Monetary Authority of Singapore identify fintech start-ups for grants.

The programme took two to three weeks to roll out, given the pressing need for fintech start-ups to qualify for help amid the Covid-19 downturn, he added.

So far, the association has certified about 440 out of 600 applicants, who have had to provide evidence of a technological solution, primarily for financial services.

Singapore Manufacturing Federation president Douglas Foo said that helping local companies secure government contracts is useful as government tenders are also appropriately sized for SMEs to bid competitively for.

 
 

Citing figures released by the Finance Ministry in 2017, Mr Foo pointed out that nine in 10 government contracts each year are less than $100,000 in value.

And this has helped companies here, he said, pointing to how about 80 per cent of government contracts are awarded to local SMEs.

Mr Foo said the leg-up for companies will allay anxieties among manufacturers who are affected by the lack of international travel and facing uncertainty in the forecast for new orders.

He cited a recent survey conducted by the federation that found 81 per cent of respondents indicating their order books had shrunk from six months to two months.

About 55 per cent have also highlighted worrying inventory build-up, he added.

Associate Professor Lawrence Loh of the National University of Singapore Business School said that systemic help for SMEs to secure government contracts is "definitely an appropriate move".

 
 

"Many SMEs are often in a Catch-22 situation as they need to build their track record before standing a chance to be selected - yet they cannot have any record unless they have done some work before," said Prof Loh, who is also director of the Centre for Governance, Institutions and Organisations.

"A definitive criterion that places a premium on high-potential local SMEs can be consciously included in the tender evaluation process," he added.

A version of this article appeared in the print edition of The Straits Times on September 15, 2020, with the headline 'SMEs want help to secure public contracts: Business groups'. Print Edition | Subscribe