Trade and Gender in Public Procurement

 

(Image Source: United Nations)

 

The uOttawa-Queen's Joint Clinic carried out two projects on Trade and Gender for the International Trade Center (ITC), Geneva. 

 

Background:

 

The Joint Declaration on Trade and Women’s Economic Empowerment was endorsed at the WTO Ministerial Conference Meeting in Buenos Aires in December 2017. It acknowledges, among other things, that “inclusive trade policies can contribute to advancing gender equality and women’s economic empowerment, which has a positive impact on economic growth and helps to reduce poverty.” The 118 WTO members and observers who supported the Declaration affirmed their commitment to “effectively implement the obligations under the Convention on the Elimination of all Forms of Discrimination against Women” and agreed to collaborate on making their trade and development policies more gender responsive in a number of ways. 

 

The ITC hopes that the Ottawa and Queen’s projects will produce results that will assist WTO members to implement key goals of the Declaration.

 

Focus of the Queen's and uOttawa Reports

 

The Queen’s project focuses on the enhancement of women entrepreneurs’ participation in public procurement. It examines public procurement models and tools used in a number of countries with a view to assessing their strengths and weaknesses for promoting bidder diversity and inclusivity of specific groups. 

 

The uOttawa project is dedicated to helping remove barriers for women’s economic empowerment and increase their participation in trade. It includes a “stocktaking” of governments’ best practices for gender-inclusive trade policies and gender-mainstreaming approaches for small business, including laws, regulations, and trade agreements.

 

The summary of the Queen's project is provided below. To read and download the full Queen's report, please visit here. To read more about the uOttawa report, see here

 

Executive Summary

 

Preferential public procurement provides states with a powerful means of reducing gender  inequality  and promoting  women’s  empowerment. Well-designed policies that efficiently redirect a greater proportion of public spending towards  small  and  medium-sized  women-owned  enterprises  (SMEs)  will  not only  help  these  businesses  develop  capacity  and expertise  but will  also  pay broader societal dividends. For not only are women’s rights and the interwoven need for economic gender equality a question of human rights, but mounting evidence also suggests that levelling the economic playing field for women is a prerequisite  for  sustainable  development.  Creating opportunities for women-owned SMEs through public procurement is a potent means of achieving this objective, particularly because of the significant room for growth that remains: while public procurement accounts for approximately 20% of global GDP, it is estimated that only 1% of this market is supplied by women-owned businesses. Investing   in   women-owned   SMEs   further   makes   sense   because   SMEs generally make up nearly 80% of jobs worldwide, and yet the third of all SMEs owned by women cannot realize their full potential because of gender-specific constraints and barriers.

 

Of   course,   public   procurement   already   presents   a   challenge   for policymakers because of the number of objectives in play, including efficiency, transparency, and integrity. By adding a set of preferences for some businesses to this list of considerations, preferential public procurement only increases the complexity of the  task.  While  the  scope  of  this  challenge  is considerable,  a review  of  existing  preferential public  procurement  schemes  proves  that  there are practical and cost-effective solutions available to governments across the spectrum of economic development.

 

This report aims to provide a roadmap to preferential public procurement tailored to the context of women-owned businesses.  Specifically, we offer guidance   to   policymakers   working   with   governments   and   international organizations on the design, implementation, and support of these programs by distilling best    practices    from    existing    approaches    into    a    set    of  recommendations. In brief, we show that successful programs combine a range of primary and secondary measures, namely:

  • Primary  measures form  the  core  of  preferential  public  procurement schemes,  as  they  provide  tangible  benefits  to  eligible  women-owned businesses.   While   certification   acts   to   minimize   abuse   of   these programs, set-asides and bid-adjustments are forms of affirmative actionthrough which eligible businesses are awarded contracts without having to compete on the open market. Ideally, these policies provide sufficient growth opportunities for businesses so that eventually they are able to compete beyond the scope of these programs.

   

     - Certification forms the backbone of any preferential procurement regime.

 

  1. It  allows  procuring  authorities  to  verify  bidder  eligibility, which helps ensure program integrity.

  2. It streamlines the bid process for eligible businesses.

  3. Procuring authorities can perform certification in-house, or can out-source to third party certification organizations.

 

    - Set-asides reserve  suitable  contracts  for  exclusive  competition amongst women-owned businesses.

 

  1. Their  key  advantage  is  that  they  guarantee  that  select contracts are awarded to women-owned businesses.

  2. The  selection  process  may  be  complicated  because  it requires a range of data (e.g., the number and profiles of eligible  businesses,  the  communities  within  which  those businesses operate, their representation in the applicable economic sector, and cost implications).

     

     - Bid-adjustments promote the competitiveness of women-owned businesses  by  applying  a  discount  to  some  or  all  of  the  price components of eligible bids.

 

  1. The challenge in this approach is configuring the extent of the price discount.

  2. Procuring  authorities  must  balance  between  access  for women-owned  businesses  while  capping  the  potential cost-consequences of applying the discount.

 

  • Secondary  measures educate  and  train  eligible  business  personnel and provide general support structures.

     

   - Public  outreach  and training  initiatives provide  education for women owned  businesses  on  the  programs  offered  and  on  the steps required to participate in public procurement.

  1. Among  other  things,  this  should  include  training  on the particular   procedures   in   a   procurement   process,   the criteria  used  to  evaluate  bids,  and  the  preparation  of  bid documents.

     

    - Materials   must   be   presented   clearly   and   accessibly. Information  on  websites  and  elsewhere must  be presented  in  a user-friendly  manner,  and  reference  documents  should  provide step-by-step explanations of the procedures involved.

   

   - Investigative/adjudicative   tribunals provide   a   venue   for suppliers to contest the award of particular contracts.

  1. This  furthers  the  integrity   of  a regime   and provides policymakers with a source of feedback.

 

  - Periodic review of applicable legislation/regulations ensures continuous improvement.

  1. Ideally,   these   reviews   include   consultations   with   all stakeholders  and  engage  independent  experts  to  assist with fact-finding, analysis, and recommendations.

 

In addition, there are three interrelated issues in preferential public procurement that would be best resolved through international coordination.

 

  1. Governments  should  work  towards  a  universal  definition  of  “women-owned business”. Variations in the definitions and standards used for women-owned    business    limit    the    reach    of    preferential    public procurement   schemes   and   create   artificial   obstacles   for   women entrepreneurs  seeking  opportunities  across  borders.  We  discuss  a number  of  considerations  on  which  to  base  a  universal definition  and provide a template for what this definition might look like.

  2. A universal definition, in turn, would create the foundation for a universal certification  program.  This  would  further  enhance  the  reach  of  these schemes by reducing barriers and promoting integrity. 

  3. Finally,  successful  preferential  public  procurement  regimes  require accurate data on a range of points, most importantly, on the number and profiles of eligible women-owned businesses. A centralized database of women-owned  businesses  would  facilitate preferential  procurement processes that do not discriminate based on nationality and would also allow  for  a  more  nuanced understanding  of  these  businesses  and  the challenges they face. Governments should therefore be encouraged to share domestic  information  and  aggregate  it  in  a  transparent  global registry. Ideally, this global registry would be administered alongside a universal certification mechanism.

 

To read and download the full Queen's report, please visit here.

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