City urges big contractors to help small firms

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)