Small business needs help, but there seems to be little in sight.
The Ontario government has formed a committee to review the way it doles out contracts to businesses in the province. Unfortunately, the “Doing Business with the Ontario Government Task Force” offers little explanation as to what improvements it can offer small businesses.
The group’s objectives are to identify and eliminate barriers that exist for small- and medium-sized businesses when trying to obtain contracts from the government. However, it offers no explanations as to how it would actually go about overhauling the province’s unbalanced procurement system. With much talk but no action plan, the task force seems to be little more than an empty attempt by the government to show small business it cares.
Small businesses face more formidable barriers than competition for contracts. Let’s not forget about issues of manpower and financial resources. Many government contracts require far more resources, both human and monetary, than small- and medium-sized businesses can provide.
Not only that, businesses usually need various types of insurance, from performance to liability, before they can be awarded a government contract. With no guarantee that any of their bids will ever be accepted, most small businesses can’t afford to take the chance on expensive insurance that they wouldn’t otherwise need.
While, in theory, this new task force could be a helpful step forward for the province’s small businesses, the nature of the existing barriers may prevent any real action from being taken. The formation of the committee sounds great for the future of small business in Ontario, but will it really help? The answer appears to be no.
At this stage, the task force is listening but lacks any plan for action.
The group has been to Ajax and Thunder Bay to hear from representatives of various business organizations — it will come to Ottawa on March 22.
Currently, businesses learn about available government contracts from the Merx online tendering system at www.merx.com, but this doesn’t make sense for small business owners. Because the system is so large and contains a list of all available contracts, they might be competing with up to 300 other companies for a contract, and may not have the resources to be viable competitors.
Some of the representatives at the task force’s hearings have expressed concern about the process for learning what projects are available. Larger companies have an unfair advantage because they can devote a full-time employee to surfing the huge Merx site and writing proposals for bids. However, the task force has yet to offer any helpful alternative to the Merx service.
The current procurement policy strictly adheres to the guiding principle of getting the most value at the best cost. It’s doubtful that this hard and fast rule will be removed to make allowances for small businesses who can’t afford to be as competitive as larger, more financially-stable companies.
Although the committee hopes to come up with some solutions to the problems faced by small business, the government’s current procurement process would have to change fairly drastically in order for this to happen.
Unless the government is willing to change its “biggest bang for the buck” policy, it’s unlikely that small business will see an influx of contracts come its way anytime soon.