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Government Procurement

Government procurement – a path to SME growth?

Simon Bell's picture
A tile factory in Ghana. Photo: © Arne Hoel/The World Bank

In many countries Government is the biggest procurer of goods and services, which makes them an attractive client for small and medium scale enterprises (SMEs) seeking to get a leg up in business.

Recognizing the important role that the public sector plays as a purchaser of goods and services, as well as the critical role SMEs have for the economy, Governments frequently use Public Procurement to incentivize, support and otherwise sustain local SMEs.

Also, as in many of our client countries, where the vast majority of SMEs are informal, the lure of a significant Government contract can serve as a strong motivator to register and formalize – bringing these companies in from the shadows.

But there is also a significant downside in many countries. Cash-strapped governments frequently don't pay their bills on time and, in some countries, payment delays of 12 months or even two years are not uncommon. Such delays can seriously compromise the position of a small scale enterprise which – with limited access to formal bank financing – relies critically on cash flow from its clients to sustain its business. A six month delay in receiving payment on a contract can easily put a small firm out of business.

How capacity building and market analysis achieved speedy implementation in China

Jianjun Guo's picture
Photo credit: Jianjun Guo

Is it possible to complete advanced contracting for the construction of Bus Rapid Transit (BRT) lines within two or three months and have the lines in operation within six months?

The simple answer is, yes.

The China Urumqi Urban Transport Project II, a US$537 million project, achieved just this as it looked to improve mobility in selected transport corridors in the city of Urumqi, the capital of the Xinjiang Province in West China.

A Collaborative Approach to Tackling Fraud and Corruption

Adu-Gyamfi Abunyewa's picture
Photo: Tran Thi Hoa / World Bank

Whenever aid and development money is involved, one question consistently emerges: How do you make sure it does not fall on the wrong hands, and be victims of fraud and corruption? This is a question that the World Bank country team in Vietnam and elsewhere has been grappling with. How do we ensure that financing for World Bank projects actually goes to its intended purposes and supports the ultimate goals of eliminating extreme poverty and boosting shared prosperity?

World Bank country staff in Vietnam realized that previous responses to fraud and corruption have focused too narrowly on individual projects. What are the factors that cause and perpetuate fraud and corruption in the first place? They needed to sufficiently address the root causes of the problem, and not just the symptoms. Despite greater awareness and more open debate about corruption in Vietnamese society, there's no evidence that allegations of fraud and corruption have decreased in the last several years.

To nip the canker in the bud, the Vietnam country team is developing a Strategic Action Plan to Address Fraud and Corruption Risks. The plan identifies broad areas of fraud and corruption concerns, categorizes them, and proposes measures and activities for mitigation. Teams across different World Bank units called “Global Practices” have come together to mainstream and implement the plan into core operations.

Voluntarily Tying Government’s Hands: Civil Society Oversight of Procurement in Mongolia

Zahid Hasnain's picture

In June 2011, the Government of Mongolia amended the Public Procurement Law of Mongolia  (PPLM) to include a new formal role for civil society and professional organizations in bid evaluation and contract monitoring.