How can small and medium enterprises win govt tenders?

Prime Dynamics · Mar 7, 2011

Tanzania is a developing country with growing infrastructure, use of simple technologies and industrial sector. Small scale and medium enterprises (SMEs) make up good percentage of businesses, employing a good number of the working population.
Every week, newspapers run tenders from government agencies for building roads, supplying IT equipment, vehicles, furniture, and agricultural equipment etc. But out of the numerous tenders on offer, majority are taken up by established, multinational companies, stunting the growth of small-scale establishments and the Tanzanian economy through profit repatriation.

Small scale and medium enterprises (SMEs) lack capacity. They lack the procurement knowledge about competitive bidding, and for this reason, many of them do not go past the preliminary evaluation stage. Even the few SMEs, who make it past the preliminary stage, fail to execute the jobs because they lack capacity. I came to realize that many Small scale and medium enterprises are not registered, do not file monthly income tax returns and are, therefore, not tender ready. Where a Small scale and medium enterprises possess the requirements for successful preliminary evaluation, one does not possess staff who can successfully execute the tender. They usually hire next of kin, who lack the required competencies, which greatly cuts down their chances of winning tenders. In most cases, government tenders are too large for one company to solely execute without the assistance of a third party. I think partnering with larger established firms is by far the quickest way for Small scale and medium enterprises to win government tenders. Partnering with other Small scale and medium enterprises (SMEs) at a similar level will not generate any benefits for any of the firms. winning government tenders requires a firm to clearly demonstrate a wealth of experience in handling similar projects, which forms the most vital component of technical compliance before a tender can be awarded.

Government tenders require a participating firm to deliver a bank draft as bid security to the issuing public institution. Small scale and medium enterprises most of them dont have banking habits.
Many Small scale and medium enterprises have fallen short of winning government tenders due to the insistence by government regulations on using bank drafts as bid security.

Chipukizi · Mar 7, 2011

Apa Tanzania Tender wanapata wanaotoa Rushwa tu akuna jingine ata kama una PHD ya procurement PESA ndio unafanya kila kitu.and Now watu awanunui tender mpaka wajue ramani ya kupita!
Vinginevyo unakuwa msindikizaji tu

Anfaal · Mar 7, 2011

Prime Dynamics said:
Tanzania is a developing country with growing infrastructure, use of simple technologies and industrial sector. Small scale and medium enterprises (SMEs) make up good percentage of businesses, employing a good number of the working population.
Every week, newspapers run tenders from government agencies for building roads, supplying IT equipment, vehicles, furniture, and agricultural equipment etc. But out of the numerous tenders on offer, majority are taken up by established, multinational companies, stunting the growth of small-scale establishments and the Tanzanian economy through profit repatriation.

Small scale and medium enterprises (SMEs) lack capacity. They lack the procurement knowledge about competitive bidding, and for this reason, many of them do not go past the preliminary evaluation stage. Even the few SMEs, who make it past the preliminary stage, fail to execute the jobs because they lack capacity. I came to realize that many Small scale and medium enterprises are not registered, do not file monthly income tax returns and are, therefore, not tender ready. Where a Small scale and medium enterprises possess the requirements for successful preliminary evaluation, one does not possess staff who can successfully execute the tender. They usually hire next of kin, who lack the required competencies, which greatly cuts down their chances of winning tenders. In most cases, government tenders are too large for one company to solely execute without the assistance of a third party. I think partnering with larger established firms is by far the quickest way for Small scale and medium enterprises to win government tenders. Partnering with other Small scale and medium enterprises (SMEs) at a similar level will not generate any benefits for any of the firms. winning government tenders requires a firm to clearly demonstrate a wealth of experience in handling similar projects, which forms the most vital component of technical compliance before a tender can be awarded.

Government tenders require a participating firm to deliver a bank draft as bid security to the issuing public institution. Small scale and medium enterprises most of them don't have banking habits.
Many Small scale and medium enterprises have fallen short of winning government tenders due to the insistence by government regulations on using bank drafts as bid security.

Nice presentation but viable in developed countries. We have alot of stringent rules and regulations. However, the likes of DOWANS and RICHMONDS are never miss despite the presence of the so called PPRA. It is time now to acknowledge, the problems with SME's are highly founded on coruptions and poor governance. There is no political will to liberate the majority from poverty.
Even if the mentioned problems do exist, what efforts have so far been implemented to assist atleast the SME's in tendering. Among other things, tendering process is among the highly corrupted practices in Tanzania even for those aclaimed large corporation. They never execute their responsibilities to the desired level, ending them into delivering very low outputs again using corruption practices.
Nchi imeoza!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

newmzalendo · Mar 7, 2011

SME ndo wanongoza kupata tender,u have got it wrong.lets look at Richmond,if you were to class it,would u call Richmond a major company.
to strart with richmond was recerntly registered.
2- richmond had all the Halmarks of being an SME or A one Man Company.yet it managed to get a tender of supplying umeme to each and every Tanzanian.
So bwana mkubwa analysis yako nzuri sana lakina inafaa zaidi kuwa research/thesis ya kufanyia academic project tu.in Tanzania kinachomata ni Whom to Do you Know,and How much are you willing to give

babalao · Mar 7, 2011

Your article was Theoretically right but practically wrong. In TZ everything is possible. There are different types of tenders. There are major high value tenders such as Construction projects these require big capital to execute. There are small tenders such as supply of stationery and other office supplies. These types of tenders can be won by SMES provided they know some one in the office. Most of the tenders are given to people who are very close to the officers whom they can trust to avoid being blackmailed and loosing the 10%

Prime Dynamics · Mar 7, 2011

babalao said:
Your article was Theoretically right but practically wrong. In TZ everything is possible. There are different types of tenders. There are major high value tenders such as Construction projects these require big capital to execute. There are small tenders such as supply of stationery and other office supplies. These types of tenders can be won by SMES provided they know some one in the office. Most of the tenders are given to people who are very close to the officers whom they can trust to avoid being blackmailed and loosing the 10%

Lakini don't you think that SMEs can apply for any construction project unlike their financial healthy then atakapo win hiyo tender they can always get into a joint venture? Mimi nadhani SMEs wanaweza but they need to be encouraged and given momentum. Sidhani kama ni kweli that kila tender you need to have a godfather behind.

KENPAULITE · Apr 5, 2018

Prime Dynamics said:
Tanzania is a developing country with growing infrastructure, use of simple technologies and industrial sector. Small scale and medium enterprises (SMEs) make up good percentage of businesses, employing a good number of the working population.
Every week, newspapers run tenders from government agencies for building roads, supplying IT equipment, vehicles, furniture, and agricultural equipment etc. But out of the numerous tenders on offer, majority are taken up by established, multinational companies, stunting the growth of small-scale establishments and the Tanzanian economy through profit repatriation.

Small scale and medium enterprises (SMEs) lack capacity. They lack the procurement knowledge about competitive bidding, and for this reason, many of them do not go past the preliminary evaluation stage. Even the few SMEs, who make it past the preliminary stage, fail to execute the jobs because they lack capacity. I came to realize that many Small scale and medium enterprises are not registered, do not file monthly income tax returns and are, therefore, not tender ready. Where a Small scale and medium enterprises possess the requirements for successful preliminary evaluation, one does not possess staff who can successfully execute the tender. They usually hire next of kin, who lack the required competencies, which greatly cuts down their chances of winning tenders. In most cases, government tenders are too large for one company to solely execute without the assistance of a third party. I think partnering with larger established firms is by far the quickest way for Small scale and medium enterprises to win government tenders. Partnering with other Small scale and medium enterprises (SMEs) at a similar level will not generate any benefits for any of the firms. winning government tenders requires a firm to clearly demonstrate a wealth of experience in handling similar projects, which forms the most vital component of technical compliance before a tender can be awarded.

Government tenders require a participating firm to deliver a bank draft as bid security to the issuing public institution. Small scale and medium enterprises most of them dont have banking habits.
Many Small scale and medium enterprises have fallen short of winning government tenders due to the insistence by government regulations on using bank drafts as bid security.

Jus a quick question, is getting bid securities and performance bonds still a challenge? i might have a solution that would like to share with you

How can small and medium enterprises win govt tenders?

Prime Dynamics

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Chipukizi

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Anfaal

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newmzalendo

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babalao

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Prime Dynamics

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KENPAULITE

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