The primary goal of public procurement is the correct and timely delivery of goods and services while safeguarding the use of public resources against the risks of waste, misuse and corruption. In addition, governments increasingly recognise the potential of public procurement in achieving complementary policy objectives (i.e. social, environmental and economic).
Social objectives could include, promoting the participation of women-owned businesses or of other socially or economically vulnerable groups in public procurement opportunities. The focus of objectives pursuing an economic dimension is often on lowering barriers for small and medium-sized enterprises (SMEs) to participate in public procurement. Facilitating SMEs’ access to tenders increases the number of firms participating in the tender, and could result in lower prices through higher competition, while creating employment opportunities, particularly as SMEs make up for a large percentage of employment in the LAC region (Ferraro and Rojo, 2018). Additionally, public procurement can be used as a tool to support policies on environmental protection and environmentally-sustainable development.
The most widely pursued strategic objectives in LAC is the participation of SMEs in public procurement. About two thirds of LAC countries indicated that they support SMEs through various policies and strategies, both at the central level and at the level of specific procuring entities. The most widely used approaches in LAC include the provision of training and workshops, and having a specific unit specialised on SMEs- each was reported by 75% of LAC countries. Further, 60% of responding LAC countries indicated having specific policies or legislative provisions to promote the participation of SMEs in public procurement. In contrast, OECD countries promoted SMEs participation in public procurement through the division of contracts into lots (70% of the countries) and the issuance of documentation and guidance directed to SMEs (67%).
Only a quarter of LAC countries reported having policies to promote procurement by women-owned enterprises. Among these, Chile and the Dominican Republic - have made large strides and are recognised as pioneers in this area. Some advances are also observed in other countries; for example, the 2018 data shows that in comparison to 2015 (previous survey period), Honduras adopted a strategy aimed at increasing the participation of women-owned enterprises in public procurement.
Fifty-five percent of LAC countries, including Brazil, Costa Rica, El Salvador and Paraguay, have developed strategies to promote green public procurement and contribute to safeguarding the environment and fighting global warming. Paraguay recently implemented a mandatory sustainability criterion for the acquisition of paper materials and computer equipment through framework agreements. In comparison with 2015, some procuring entities in Guatemala have developed a policy to support green public procurement. However, the use of the lowest price as the exclusive award criteria hinders the strategic use of public procurement in many countries of the LAC region. In fact, many contracting authorities of OECD countries – 93% of which have green procurement policies at the central level, compared to 40% in LAC – highlighted this issue as one of the main challenges related to the implementation of green public procurement
