City urges big contractors to help small firms

JAKARTA (JP): The city government has threatened to cancel its projects currently being handled by large contractors unless they cooperate with small contractors and cooperatives.

They could also be barred from taking part in future tenders for government projects, a statement citing Harun Al Rasyid, head of the city administration's Prequalification Committee, said.

Large and established contractors must, by rule, work with small entrepreneurs and cooperatives in every development project, including in the procurement of goods and services for the administration, the statement said.

The rule was based on a 1994 presidential decree, but the city decided to enforce further now as part of an overall government drive to eradicate poverty by strengthening the role of small companies and cooperatives.

If big contractors fail to comply, "then their (existing) projects could be canceled and their names would be stricken from the list of eligible bidders," the statement said.

The 1994 presidential decree states that small companies and cooperatives are entitled to certain privileges in bidding for government contracts or auctions.

These include advance payments of up to 30 percent of a project's value, instead of the normal 20 percent. They would also be given preference even if bids exceeded 10 percent of offers made by big contractors.

The administration said it sent out questionnaires to all registered contractors -- big and small companies and cooperatives -- as part of a survey to help it draw up a program to support small companies and cooperatives.

The questionnaires were to be handed in by yesterday.

The administration said it aimed to strengthen the role of small companies and cooperatives and to create a healthy business climate that would allow them to take part in city projects.

The administration also urged contractors to immediately join the Chamber of Commerce and Industry (Kadin) city chapter, which could help them take part in future tenders made by the government, state companies, provincial-run companies and joint venture companies. (07)