Problems of Participation of Small and Medium Enterprises in Public Procurement

Abstract

Problems of development of small and average business in Russia due to the lack of support from the state, including in the procedures of the state order. Reforming the regulatory frame-work of public procurement (orders of state and municipal authorities on goods, services, works) will seek the involvement of small and medium-sized businesses in tenders and auctions for the procurement for the needs of the state. The adoption of a new law on contract system 44-FZ partially solves the problems of the organization of public procurement, the system of motivation of participation of SMEs in tenders, however, several questions still remains unresolved. A significant step in improving loyalty to small and medium-sized business is the requirement from 2014 at least 15% of government purchases be made through these entities. However increasing requirements for small businesses in terms of disclosure of reliable financial information about its activities, providing security for the entire period of the contracts. This partially solve the problem by attracting Bank guarantees, Bank lending, loans through microfinance organizations, credit brokers, which significantly increases the burden on entrepreneurs, which would ultimately refuse to participate in the auction. However, entrepreneurs still participate in bidding, performing the contract system, responding by the increased obligations of financial institutions, which proves the potentials of this sector of the economy and its stability. Subsequent conversions in this area should primarily be directed at easing the requirements for bidders, the ordering procedure involving collateral contract and reduce the demands from the financial institutions.

Keywords

• government contracts
• small and medium business
• contract
• performance bond
• warranty