Women win one in four contracts in the Dominican Republic thanks to inclusive procurement reforms
“Why don’t women participate in public contracting?” When the team at the Domincan Republic’s General Directorate of Public Contracts (Contrataciones Públicas) posed this question in 2012, it marked the beginning of their strategy to increase women’s engagement in the public procurement market. Eight years later, the share of contracts awarded to micro, small and medium-sized enterprises (MSMEs) led by women exceeds the threshold mandated by legislation, and they participate in procurement processes in greater numbers every day. How did Contrataciones Públicas achieve this? With an approach that combined the development of a national information system, the creation of an e-procurement platform, training sessions for different actors in the procurement system and regular, open discussions between these groups.
According to data from the Inter-American Development Bank (IDB), public procurement represents almost 30% of spending by governments in Latin America and the Caribbean and 8.6% of their GDP. Playing such an important role in the economy, procurement is thus a key tool for inclusion and development in these countries. By integrating and strengthening women’s participation in the sector, governments can create new opportunities and promote more equitable economies and societies.
This was the path that the Dominican Republic chose. Over less than a decade, the country’s new public procurement strategy led to a 16% increase in contracts awarded to smaller businesses led by women, from 10% of these deals in 2012, representing spending of US$41 million, to 26% in 2019 with a value of US $125 million. Although competitive public tenders are still a male-dominated field, the fraction of these contracts awarded to women also increased, from 20% in 2013 to almost 30% in 2019. But the team’s most important achievement was to develop a big picture understanding of the problem. They did this with the help of data, which was the raw material to drive the changes, but also by actively listening to the needs of women and the procurement agencies across the country.
The beginning: a sector without a supplier registry
“Without information there is nothing,” says Yokasta Guzmán, director of Contrataciones Públicas, when she recalls the start of the project. In 2012, her team reviewed the national statistics on women in the country. While the general figures reflected their importance to economic and social development, there was no data on women’s participation in government procurement processes. The big picture was even more bleak: the national procurement agency did not have a record of goods and services purchased by the government and less than 2% of contracting opportunities were advertised publicly.
The lack of information prevented Guzmán’s team from making decisions to improve procurement processes. At that time there was only one supplier registry, which was unreliable and lacked a field for documenting a vendor’s gender. In addition, although suppliers were required to register, some winners did not appear in the records.
“Those who participated in the procedures were not registered and those who were registered did not participate,” recalls the head of the procurement agency.
So in the first stage of the project, the public procurement team focused on two major challenges: improving the supplier data system and developing a tool that could collect information from different stages of procurement processes. The team began to gather data on all phases of the procurement process: from the call for proposals to the signing of the contract. This was a key milestone since the registry allowed the team, which had limited resources, to identify and prioritize groups of women to promote specific reform activities.
Perceptions of the procurement system and barriers to entry
According to a report by Value for Women and the Open Contracting Partnership, a number of factors make it difficult for women to participate in public procurement. These include a poor understanding of financial processes and products, a lack of knowledge about business opportunities and that women-led companies are typically smaller firms. But other administrative and economic barriers also exacerbate inequalities, such as discrimination in government regulations and unequal access to credit and investment capital.
Women’s low participation in procurement systems is a global phenomenon. In the European Union, only 26% of government suppliers have managers who are women. In the US, women-run businesses only receive 4.7% of federal contracts. In Chile, only 30% of public procurement vendors are led by women and they receive only 27% of the value of public contracts. And for most other countries, the statistics are hard to come by, since the data needed to evaluate women’s participation in the market is seldom collected and monitored.
In the Dominican Republic, certain characteristics of the procurement system directly affected women’s engagement: the use of technical language when evaluating supplier proposals and in the selection criteria, and delays in invoice payments kept women away because their companies, which are generally MSMEs, could not survive without regular income. In addition, the Contrataciones Públicas team found that women tended to bid on low value, low risk contracts rather than larger, but more complex jobs. These factors weren’t the only barriers. Research on influences outside the procurement system were key to identifying other social aspects and getting a universal understanding of the problem.
“We needed to look beyond the data of the system,” Dr. Yokasta Guzmán recalls. Her team worked together with procurement officers, for example, to show how the perceptions of government actors were limiting opportunities. Some regional units felt that women’s businesses did not have the technical capabilities or organizational structure to sell to the government and that women did not believe they were capable of winning public contracts. Furthermore, according to surveys carried out by the agency, the perception of public procurement as a market with widespread corruption discouraged participation. For Andrés De La Rosa, data analyst for Contrataciones Públicas, this situation highlighted “the high level of general mistrust of the system” and the importance of the measures taken to involve women and government officials.
The first milestone of change: “Women want to participate”
In late 2012, the government opened a large number of tenders for the construction of public schools. The administration opted for a contracting method that selected suppliers at “random” from a pool of vendors that met the predefined criteria (for more information on the advantages and challenges of this method, see this study). Once the deals were awarded, the data showed that a large number of female architects and engineers who participated in the processes won many of them. For Guzmán, this fact made it clear that women participated more when purchasing conditions became more egalitarian. However, in the eyes of the national procurement director, something even more important happened: “Women gained confidence in the public market and identified new business opportunities.” After the awards, many of them began to sell various materials to the government: doors, toilets and wood. An association of women in construction was even formed. These milestones affirmed women’s interest in the public procurement market, and the need to work on a plan to promote more inclusive processes.
Data: the key to making decisions
The work of Contrataciones Públicas was not a process of trial and error. The empowerment of women in public procurement was always guided by the analysis and use of data about and beyond the procurement system. Once the team had enough information about the processes, they asked themselves a key question: “Where are the women and what do they sell to the government?” At that time, the team found that women’s participation was concentrated in specific regions of the country and decided to meet them to get to know them and understand their needs. “The perceptions of the public servant working in their office is very different from what happens on the street. Working closely with different sectors to understand their reality is very important. You have to put a face on these kinds of policies, in order to reduce uncertainty. Procurement systems must be humanized,” Guzmán says.
Legislation also became a tool to strengthen women’s presence in the public market. The Dominican Republic approved a law that establishes that 5% of the annual purchases from MSMEs must be awarded to companies led by women (for more background on quotas in public procurement systems, see this report). According to the latest data, the total value adds up to more than US $110 million per year. Guzmán says that before implementing the policies, “women realized near the end of the year that they still had a percentage that they had not used and ran to take advantage of it.”
The information generated by the data was accompanied by surveys that revealed women suppliers’ needs: they demanded technical training and assistance to sell to the State. The answers to the questions revealed other limitations: a low level of association and companies with more unpredictable structures. This prevented them from taking full advantage of public procurement opportunities.
From data to action: the path to more participatory processes
Creating more inclusive markets has its challenges. In the case of women’s participation, experts interviewed by Value for Women and Open Contracting highlighted the need to understand gender gaps in public procurement, clearly define what is meant by companies “led” by women and include permanent feedback spaces in the government’s strategy. The bottom line: don’t work in one direction.
All these recommendations are reflected in the strategy of the Domenican Republic. Legislative reforms were promoted to create conditions that favored women’s participation and the creation of the procurement portal helped to expand their participation beyond the local level. For Mariel Acevedo Aracena, a businesswoman in the construction industry, the e-procurement system improved the efficiency of the processes: “Before using the tool, you had to have contact with each entity to which you made offers. There was a lot of uncertainty in bidding because you did not know the starting price, access to the contract documents wasn’t very easy and it was necessary to travel to physically obtain the information about the minimum requirements to submit an offer (…). It was very difficult. Imagine if you wanted to submit proposals for five to six processes. It was a bit about working blind and there was more chance for corruption.”
Among the actions carried out to strengthen the presence of women in public procurement, the following stand out:
- Face-to-face meetings to enhance their capacities: workshops on “How to sell to the State” and “How to present a winning offer” became a guide not only on how to overcome the technical barriers to using the portal, but also gave them tools to understand how to take advantage of opportunities. The events included information to help women calculate their production costs and sell at competitive prices. Through these initiatives, they also received training on analyzing completed processes and the government’s procurement plans to professionalize their companies.
- Business circles: these spaces connected the officials of the largest procuring entities in the country with women suppliers. At the meetings, the women pitched and displayed their products. They also heard about the purchasing needs of procuring entities. Among other achievements, this initiative created a more fluid dialogue between the various actors in the procurement system.
- Development of indicators: “measure to change”, this was the aim when developing indicators to monitor contracts awarded to women by different government agencies. Among them is the SISCOMPRAS, a sub-indicator which has been developed to monitor compliance with Law 340-06, its amendment and related regulations. This indicator in turn has a sub-indicator that measures compliance with the purchase quotas for MSMEs and MSMEs led by women established in the procurement and sector regulations.
- Creation of dashboards with updated gender data and statistics: data on the amounts and contracts awarded to women’s businesses began to be published on the website of the Dirección General de Compras. This information was also accompanied by general statistics about the procurement system.
- Exclusive list of suppliers: the national procurement agency drew up a list of all government supplier companies led by women. The registry was shared with procuring entities across the country so that they could learn about their products and invite them to participate in contracting processes.
- Creation of a promotion unit: this made it possible to identify institutions (schools, offices, hospitals, etc.) in specific territories and to understand what goods and services they need to promote local purchases from small and medium-sized enterprises. The unit is also in charge of carrying out studies and analyzing information about the procurement system to make the market more efficient.
Among the activities organized by the procurement agency, women have a very positive view of the workshops. “Sometimes you feel certain limitations and the training helped me understand that there are opportunities for everyone,” says Antonia Castro, the owner of a cleaning supplies company. For this supplier, who founded her company less than two years ago, training “is the foundation to start any business.”
The data standard: openness, transparency and higher quality of information
The quality and openness of public procurement data helps governments and various civil society actors to make better decisions. It also makes it possible to monitor processes, build indicators and make transparent how public money is spent. For this reason, in April of this year, Contrataciones Públicas began to publish data from the procurement system following the Open Contracting Data Standard (OCDS). Its implementation made information on all processes carried out since the launch of the electronic portal available to the public. The dataset currently contains data from more than 152,000 contracts and is updated every quarter.
Although the standard does not include detailed supplier data by default, its flexibility allowed the procurement team to create a special extension to evaluate and measure the progress of contracts awarded under various budgets and entities.
Results: figures and changes in the procurement ecosystem
A universal approach, geared towards specific groups and with sustained actions over time, managed to increase the number of contracts awarded in general, from 9,700 in 2013 to 23,000 in 2019 – an increase of more than 130%. Meanwhile, data from 2019 shows almost 30% of purchases and public contracts are awarded to women.
The annual value of contracts awarded to women fluctuated between 2013 and 2019. In 2013 and 2014, US$270 and US 234 million respectively were awarded to businesses led by women. According to Contrataciones Públicas, the high figures are related to the measures that were taken by the agency, but also to the introduction of the “raffle” method for works procurement (for more information on the advantages and challenges of this method, see this study). The annual value awarded decreased until 2017. However, the development of the contracting portal that year and the actions carried out had a positive impact as of 2018. The increase in the contract value in 2018 was more than 100% compared to the previous year.
En República Dominicana, el 50% de las empresas de mujeres son MIn the Dominican Republic, 50% of women’s businesses are MSMEs. Taking this percentage into account, another positive influence of the Contrataciones Públicas’ actions is a sustained increase in the sums granted to these businesses in small contracts. Between 2013 and 2018, for example, the increase in value exceeded 600%.
The strategy also led to changes in the types of products and services offered by women. In 2015, almost 40% of women-led suppliers were in construction. Consulting services, textiles, food and cleaning supplies, rounded out the list of the five categories with the most women-led companies. Five years later, women’s businesses have diversified. The latest survey carried out by the procurement agency shows that training, consulting and advertising companies lead the ranking. Construction continues to be the second most important industry, and office supplies took the place of food sales.
Towards more inclusive markets: some challenges and next steps
Including and strengthening the participation of different actors in public procurement is a long process, with progress and setbacks. One of the most important achievements in the Dominican Republic has been the fact that women entrepreneurs have come together as part of associations. “Most have MSMEs with up to 10 workers. This makes their operational and financial capacity very limited. They need to join associations and we provide them with support for the first processes so that they can be more ambitious, beyond that boom they had in the works awarded through raffles,” explains Guzmán. Antonia Castro believes that the system also needs to give better opportunities to small companies, since in some cases they still believe they face barriers because they are women.
For Mariel Acevedo Aracena, more institutions still need to comply with the 20% awards to women. She also believes the role of Contrataciones Públicas needs to be strengthened: “The procurement agency can only recommend good practices and if a bidder reports an irregularity, once a decision is made it is too late.”
Acevedo Aracena highlights another challenge: creating new standards to increase the efficiency of the process. She mentions the case of the “field visits” that the construction industry must carry out before bidding. Often the deadlines specified are very short and since they must travel to submit offers in person, they have less time to prepare the offers.
The changes in the perception of corruption over time show that the Contrataciones Públicas strategy achieved greater confidence in the system, but it also shows that there is still a long way to go. For example: in 2015, 63% of women believed that corruption in public procurement had increased. In 2020, that number dropped 20 percentage points to 43%. Although the decrease is important, the negative perception on the procurement processes continues to be high.
The health crisis caused by COVID-19 created new challenges for Contrationes Públicas and showed that further steps are still needed to fight corruption. Due to the prevalence of emergency purchases, the demand for greater transparency in procurement processes increased. Civil society actors called for faster publication of the names of the winners, the unit prices paid for the products and the intermediate stages between the opening and the award of the contract to the companies. Meanwhile, this type of purchase highlighted the high prices being asked for products and delays in delivery due to the huge demand of the international market. As a consequence, Contrataciones Públicas prepared a general guide for emergency purchases and regulations were issued to increase oversight of these processes. For example, they established a list of specific products that could be purchased through emergency purchases. The value of open contracting data has become more relevant in the current context — not only to monitor emergency processes, but to act quickly against cases of potential corruption. Publishing information using the OCDS is a valuable tool for producing efficient government responses that resolve potential conflicts at times when quick action is required.
In the future, it will be essential to develop workshops that promote the reuse of open data by suppliers, procuring entities and civil society organizations. The training and identification of user groups is key to create new demands for information that promote greater transparency and efficiency of the system through citizen and government monitoring processes. For the open contracting data system, it is important to increase the volume of published data and the level of disaggregation, and to update the dataset more often. These measures will improve the quality of the data and the decisions that are made, and will create new opportunities for analysis.
Recently the Dominican Republic elected a new national government. The incoming administration’s agenda shows a focus on transparency and the fight against corruption. The head of public procurement, a position to be held by the director of the Transparency International chapter in that country, will be a central pillar in this process.
Taking into account that more than 30% of the national budget is designated to contracting and the need to revitalize the economy, greater openness and transparency are two fundamental factors in terms of public integrity and using resources more efficiently. A global approach and the inclusion of all social sectors will strengthen these processes, guiding the way towards fairer and more equal societies for all.