Public Contracting and Inclusion: How is Latin America doing?

August 12, 2020

Guestblog by ILDA. A Spanish version of this article can be found here.

In recent months we have been discussing the possibility that public contracting could encourage the inclusion of vulnerable or marginalized groups in society. Along these lines, we participated in an exchange of ideas, based on the presentation of a report on inclusion and open contracting written by Michael Canares and Francois van Schalkwyk. This report reflects cases from Africa and Asia and gives us a promising but still incipient picture.

In Latin American countries, the public procurement market is key to inclusive and sustainable development. That is why at ILDA  we have worked on this topic of research in the region, developed by Ana Joaquina Ruiz, with Hivos’ support. The report is part of a series that analyzes a selection of cases and experiences related to civic participation and inclusion (specifically women) in Latin America, in order to learn about its development and implementation.

The central axis that guided this report, about the inclusion of women in the public procurement sector, is related to the identification of the people and companies that supply to governments. A first stage of exploration and identification of cases was carried out and, after that, a more in-depth analysis stage was conducted with the help of several interviews to better understand them. After these steps, one of the main findings is that, although the measures that affect inclusion through increasing the number of women in the list of providers can be useful, in most cases, we do not have enough information to evaluate the success of these initiatives.

Despite the implementation of the Data Standard for Open Data Procurement (OCDS), in countries such as Colombia, Chile or Mexico, we cannot know with certainty whether the award processes benefit them in terms of inclusion for the developing. That is, we do not know the place that women occupy in companies. The numbers are important, but the roles (and disaggregation by sectors) assumed by that number of women in a given market is an essential piece of information to understand inclusion. Beyond the lack of data, it is worth noting that several Latin American countries and some sub-national governments, such as the Dominican Republic, Chile, Colombia, the city of Buenos Aires, and Cali, have generated proactive policies to increase women’s participation in these markets. From the generation of certifications/seals for women’s companies, training and workshops, to policies to give them preference in bidding processes.

After analyzing the cases, we concluded that it is necessary for the cities and countries of the region to emphasize inclusion and implement policies aimed at this. They are also required to be proactive in their approach to the subject, to know the market for women suppliers, and to invite them to be part of the public bidding process. Along these lines, the report makes a series of recommendations, which focus on quality data and the policies associated with that data. Furthermore, the records should include gender markers. That is, a column, a color, a way of distinguishing in the database that there are companies run by women or with a majority participation of women. This marker can be placed through data analysis (markets or small countries) or can be placed as a “seal”.

Collecting data is necessary but not enough. The data should also be combined with a public policy that encourages women to be included in the public procurement process. These policies must approach inclusion by design – and not as a subsequent action, not calculated – as well as enabling the necessary elements for an effective and sustainable implementation. From improving communication, facilitating the training of women in charge of small and medium-sized enterprises (it is a complex field that requires specific knowledge), to social clauses, among many others, are measures that contribute to inclusion.

In any case, it should be added that the development of a general policy framework that allows us to improve inclusion in these markets is pending. In the same way that an open data policy on public procurement has been developed, it is necessary to formulate inclusive policies in this sector. The elements included in the policy should aim to eliminate mechanisms that do not allow access to opportunities to participate in development. Without those changes, the status quo remains and changes are minor.

To sum up, many cases have great potential to gradually transform the inequitable reality that we have to live, but much remains to be done to achieve this goal. These initiatives are incipient, despite the hard work of some networks for the exchange of knowledge and good practices in the field. In this line, the report is a contribution to be able to understand a little better the Latin American situation and has been conceived as a first step to be able to take better measures and continue adding research to achieve effective inclusion.

To read the complete report, access this link.