SME access to public procurement in South African water infrastructure projects

Abstract

Historically, public procurement literature had been a neglected field in management science despite its importance to service delivery. Massive budgets are spent by governments globally through public procurement; a figure reported in 2020 to accounts for 15-20% of global gross domestic product (GDP). Government spending through public procurement is one of the levers that can be utilised to stimulate economic growth and create employment. This can be done through small and medium-sized enterprises (SMEs), which have been found to have a major impact in employment creation and eventually poverty eradication. The study set out to discover the challenging issues facing the built environment sector, in particular, the barriers and enablers of SME access to public procurement in South African water infrastructure projects, and ultimately determine what collaborative efforts are required by all stakeholders to improve the access of SMEs in public procurement. An exploratory and qualitative research methodology was adopted. Semi structured interviews were held with 15 experienced participants within the water sector. The study revealed valuable insights, namely, the challenges currently facing the built environment sector, in particular, the barriers and enablers of SME access to public procurement in South African water infrastructure projects. In addition, these include collaborative efforts required by all stakeholders to improve the access of SMEs in public procurement. The findings gave rise to the proposed framework for providing SME access to public procurement in South African water infrastructure projects as well as the stakeholders responsible to do. Whilst the participants requested all stakeholders to act ethically in their public procurement dealings within the water infrastructure space, some findings were specific to certain stakeholders such as:  Government departments and public entities need to review their current procurement strategies, ensure that there is no ambiguity between policy statements, be supportive to SMEs, ensure investment inflows into the sector for project execution, and also invest in the much required skills for the sector which are contractors, engineers and artisans.  Contractors need to provide support to SMEs through the provision of guarantees and sureties, implement skills transfer programmes, and also involve SMEs in their standing supplier agreements.  Consulting engineers need to implement skills transfer programmes, to develop innovative designs using modern technology as an enabler to SME access to public procurement.  Communities need to be made aware of, and stop sabotaging projects within their own localities results in cost overruns that are detrimental to the successful completion of the projects for their own benefit.  SMEs need to ensure that they are compliant with the laws and regulations of doing business in South Africa. In addition, to be passionate about what they do, and to learn the governance practices within the public procurement system