Budget 2024 > Latest > Commentary
Mr Derrick Goh (Nee Soon): Chairman, one way to support local businesses and SMEs to build up their capabilities and track record is through Government tenders. Industry groups have shared during my engagement with them that SMEs appreciate such opportunities, not just to increase revenues but also the chance to partner larger companies to sharpen their experience and learning.
While the Government has taken steps to reduce the administrative burden with new functions in GeBiz, such as an online repository, SMEs continue to feed back that accessibility and efficiency of Government tenders can be improved.
In particular, SMEs highlighted how contract specifications may at times be too stringent to fulfil or too rigid to allow room for SMEs to propose more innovative solutions to address requirements. They, therefore, hope contracts can be made more practical and flexible; while bundling and aggregation of contracts are logical, they could exclude smaller SMEs from bidding or compress their margins as they fulfil subcontracts with bigger SMEs as the middlemen; and startups, such as one specialising in AI video analytics which I met at the recent Singapore Airshow, asked whether the financial grading criteria can be eased to provide more opportunities for them to participate as vendors. The reality is that most are asset-light with different risk profiles from traditional companies and they are still in the midst of building up their financial track record.
On payments, I note that the Government has fulfilled payments on e-invoices below $5,000 well before the 30-day credit period. However, SMEs wonder if the invoicing and progressive payment process for larger contracts can be further simplified, such as in the verification of work completion and, especially when variation orders are involved.
I understand MOF had announced the Tender Lite procurement category in last year’s Budget to ease the Government tender journey for SMEs. On this note, can MOF: (a) update on the progress and effectiveness of Tender Lite’s implementation; (b) share if there are plans to further ease the administrative burden on SMEs during the Government’s procurement process, such as through further digitisation and automation; (c) consider improving inclusiveness of smaller SMEs and startups so that they can participate in Government procurement, such as by adjusting the requirements to prefer homegrown enterprises or MNCs that partner with them, so that our local businesses can also participate in the supply chain; and (d) share how the Government can improve the disbursement of payments and grants to be timelier and more frictionless to help SMEs ease their cash flow challenges?
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