Securing public contracts: SME's case on payment terms in the Vaal Triangle
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Date
2022-06-24
Authors
Mohambi, Tshegofatso Felicity
Journal Title
Journal ISSN
Volume Title
Publisher
Vaal University of Technology
Abstract
Because small- and medium enterprises (SMEs) are so vital to a country’s economy, it is critical to keep an eye on the problems they face. The research objectives, in this study, were to identify the factors that hinder SMEs to secure public contracts, to explore the impact of 30-day payment terms on SMEs in securing public contracts and to explore a set of recommendations on how the current payment terms on public contracts can be improved so that they contribute to the survival of SMEs in the Vaal Triangle, Gauteng province.
The study adopted the qualitative methodology to investigate the research phenomenon and was guided by the triangulation method of qualitative research. The research design used in this study is exploratory in nature and the design of a case study was adopted to gather information from various SMEs around the Vaal Triangle. The target population was the SMEs within the Vaal Triangle area and were sourced from the Central Supplier Database (CSD). A total of 13 993 SMEs were registered under the Vaal Triangle and only 10 were selected for convenience and practicality. Semi-structured interviews were used to collect data.
The research revealed that SMEs can be assisted to secure procurement opportunities through several appropriate supportive initiatives and other procurement methods. However, the research further revealed that there are challenges facing SMEs in accessing procurement opportunities. Themes drawn from the study are inclusive of the politicisation of public contracts, lack of transparency, delayed payments, lack of training towards securing public tenders, corruption and use of sexism in the awarding processes of tenders. Such constraints must be considered and addressed to ensure that the objectives of SMEs securing public contracts in the Vaal Triangle are met.
Based on the study's findings, the following recommendations were made to make it easier for SMEs to access public contracts: a) select a reliable panel to award contracts; b) enhance the public value concept; c) revise payment terms; d) provide training to SME owners; e) modify the regulatory framework for public procurement; f) eradicate gender equality; and g) stop fraud in the public procurement process.
Description
M. Tech. (Department of Business Administration, Faculty of Management Sciences), Vaal University of Technology.
Keywords
Small and medium enterprises (SMEs), Public contracts, Payment terms, Public officials, Cash flow