Bid security removed for state projects under $7M
As he underscored that government will keep implementing policies across the board for small businesses’ growth, Minister with responsibility for Finance Dr Ashni Singh says that the bid security for contracts under $7 million has been removed and he lauded the increased participation of small contractors in the public bidding process.
He explained that as government works to ensure that at least 20% of state contracts go to small contractors, the National Procurement and Tender Administration Board (NPTAB) implemented a system where those bidding will now sign a self-declaration form guaranteeing their commitment for contracts $7 million and under, instead of the previously required bid security.
“We actively believe in promoting small businesses, and that is across board with assistance, as you will see, from the Small Business Bureau…and other agencies as I have listed, such as NPTAB et cetera, all playing their part to encourage small entrepreneurs,” he added.
Dr Singh pointed to works done under current Chairman of NPTAB Tarachand Balgobin, such as small businesses being given a 5% advantage in bidding and the removal of the bid security.
Balgobin noted that in order to acquire bid security, a contractor would have to go to the bank or to an insurer to secure a guarantee. “For the bank to give you that bid security, you would have to have collateral; some assets. If you don’t have that asset base, but you have the skill, the competency, the experience, the papers and all of that, you still wouldn’t qualify. You would not have qualified. But we have taken that off,” he explained to this newspaper.
He continued, So now you have what is called a Bid Securing Declaration. You don’t have to find any money. All you have to do is to sign a declaration that is incorporated in the bid, which says that if you don’t comply—as in the same way you would have had a bid security—you are voluntarily saying to the government ‘Throw me out’”.
The NPTAB Chairman said that in the same way that a defaulting contractor would lose the bid security, with the declaration process they would accept liability to be penalised by government, which could extend to their ability to be considered for future contracts.
‘Margin of preference’
In March of this year, Balgobin had explained that to allow small businesses access to 20% of government procurement, the NPTAB had implemented a 5% margin of preference to those businesses that qualify under law.