New tender category will give SMEs better access to government contracts

A NEW category of government tenders will make it easier for small and medium-sized enterprises (SMEs) to participate, Senior Minister of State for Finance Chee Hong Tat announced in Parliament on Friday (Feb 24), alongside other moves to help businesses build capabilities and cut costs.

To be introduced by end-2023, the new “Tender Lite” category will have “fewer and simpler conditions”, said Chee, though he did not provide details.

During the Ministry of Finance’s (MOF) Committee of Supply debate, Members of Parliament Saktiandi Supaat and Edward Chia asked how SMEs can be given more opportunities to participate in government procurement.

About 80 per cent of government contracts each year are awarded to SMEs, giving them “the opportunity to build up their track records, develop capabilities and capacity to tap into new growth areas”, noted Chee.

The “Tender Lite” category will allow more firms to participate in government tenders with values higher than S$90,000 but below S$1 million. It is estimated to cover over 70 per cent of the government tenders currently awarded to SMEs.

To design the new category, MOF will work with the Singapore Business Federation, the Association of SMEs, and government agencies.

During the earlier two days of the Budget debate, MPs asked how the government can better prepare SMEs for new requirements and opportunities in environmental sustainability.

To this, Chee said the target is to include sustainability requirements and evaluation criteria in all government procurement within the next five years, “in a manner that keeps pace with industry readiness and international developments”.

This will soon apply to two kinds of tenders: construction projects with a minimum estimated procurement value of S$50 million, and information and communication technology projects with a minimum estimated procurement value of S$10 million.

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From FY2024, up to 5 per cent of the evaluation points for such tenders will be set aside for sustainability-related considerations. The government will engage industry stakeholders on the details of these measures, said Chee.

Separately, to help firms save time and money, MOF has introduced measures to simplify government processes and improve efficiency.

For instance, it recently launched eGuarantee@Gov, an online platform on which businesses and individuals can provide a banker’s guarantee or insurance bond to government agencies. This means that firms can apply for and submit a guarantee within a day, without needing to head to the bank physically or pay for courier services to have it delivered.

“The new arrangement is quicker, better and cheaper,” said Chee. The government expects up to 4,000 eGuarantees to be lodged this year, saving stakeholders a total of S$500,000.

And to improve efficiency, national e-invoice service InvoiceNow will be made the default submission channel for all government vendors within the next few years. Currently, about 55,000 businesses have adopted InvoiceNow, supported by 200 service providers.

Companies save S$8 per invoice when they use InvoiceNow, compared to doing so manually, said Chee. The service also makes it easier to access overseas markets, as it allows invoices to be sent directly in a “structured and standardised digital format” that is accepted internationally across finance systems.