An examination of SME involvement in public procurement under bid lot sizing

This study aims to examine the influence of market logics on tendering capabilities and small and medium enterprise (SME) involvement in public procurement, the influence of SME governance mechanisms on tendering capabilities and SME involvement in public procurement and the influence of tendering capabilities on SME involvement in public procurement.

Data was collected from owners/managers of SMEs registered by the Public Procurement and Disposal of Public Assets Authority. The SPSS software and CB-SEM software were used to obtain results on the influence of market logics on tendering capabilities and SME involvement in public procurement, the influence of SME governance mechanisms on tendering capabilities and SME involvement in public procurement and the influence of tendering capabilities on SME involvement in public procurement.

Findings indicated that SME involvement in public procurement is mainly influenced by their governance mechanisms whilst both market logics and governance mechanisms had a positive influence on tendering capabilities of SME firms. Market logics and tendering capabilities had no effect on SME involvement.

The study mainly focussed on SMEs’ involvement in public procurement. The research has implications for decision makers in government and SME firms concerned with enhancing levels of SME involvement in public procurement activities.

Many governments are now focussing on procurement lot sizing so as to increase SME involvement in public procurement. Despite the use of lot sizing, SME involvement in public procurement is still low in many developing countries and also declining in others. Aspects such as market logics and governance mechanisms that may help understand the variations in involvement have not been given significant attention.