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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.
To read and download the full Queen's report, please visit here.
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.
It allows procuring authorities to verify bidder eligibility, which helps ensure program integrity.
It streamlines the bid process for eligible businesses.
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.
Their key advantage is that they guarantee that select contracts are awarded to women-owned businesses.
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.
The challenge in this approach is configuring the extent of the price discount.
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.
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.
This furthers the integrity of a regime and provides policymakers with a source of feedback.
- Periodic review of applicable legislation/regulations ensures continuous improvement.
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.
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.
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.
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.