A review on participation of SMEs in public procurement: opportunities, challenges, and policy implications

Document Type : Original Article

Authors

Department of Procurement & Supply Management, College of Business Education, Mbeya, Tanzania

Abstract

In recent years, there has been growing interest in the participation of small and medium-sized enterprises (SMEs) in public procurement. This research aims to provide a comprehensive understanding of the opportunities, challenges, and policy implications related to SME participation in public procurement through an extensive review of existing literature in the field. Bakker's (2010) review approach was employed using the Emerald and Google Scholar databases, resulting in the identification and critical analysis of 31 studies that addressed the research objectives. We revealed that limited access to information, complex tendering procedures, financial constraints, limited capacity and skills, and unequal competition with larger firms are the most significant challenges that hinder the effective participation of SMEs in public procurement. On the other hand, several opportunities are available for SMEs to leverage public procurement opportunities. These include, but are not limited to, diversified training and capacity-building programs on public procurement procedures, diversity programs and policies that provide preferential treatment to SMEs, simplified procedures for minor and micro procurement, online platforms and tender portals, enhanced collaboration between SMEs and large firms, and expanding procurement requirements. Existing literature offers limited reviews that thoroughly examine SME participation in public procurement. Moreover, further research is needed to assess the effectiveness of policy measures and their impact on SME engagement in public procurement.

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