In Colombia, for every five pesos spent on contracts only one peso goes to a woman-led business. In our experience working with local and subnational authorities, government officials have little understanding of what these businesses can offer and how to create opportunities to work with them.
Colombia provides an example of where this gap has been recognized and where regulatory changes have been introduced to encourage government entities to better measure and improve the participation of women businesses in public contracting.
New rules spark change
To create conditions that were more sensitive to the needs of women businesses, Colombia started by making legislative changes. The government introduced a new law to foster entrepreneurship and a decree guiding its implementation, asking agencies to create support programs and appropriate “technical, administrative, legislative and financial instruments” to empower women-led businesses and SMEs.
In October 2020, a Presidential directive was issued prioritizing women in the economic recovery, along with a new entrepreneurship law focused on public procurement as a means to empower women and SMEs. With these new rules, government buyers were able to include criteria in their tenders to incentivize the participation of women businesses. The legislation also covers tarifs, incentives and strategies that support the development of women businesses. For example, it established that rural businesses that are majority women-owned have priority in receiving technical and financial support – a key barrier identified by us.
Less than a year later, additional rules outlined four criteria that government agencies should use to identify women businesses. A vendor only needs to meet one criteria to qualify. For example, women should own more than 50% of the company’s shares, or have at least equal representation on the Board. To ensure women are genuinely leading the business or association, such criteria must have been in place for at least one year before the contract is awarded.
In most countries, the participation of women businesses in public procurement cannot be measured because the data simply does not exist. In Colombia, the country’s procurement agency Colombia Compra Eficiente had already been publishing sex-disaggregated data about all their contract awards using the Open Contracting Data Standard. The gender of the supplier’s legal representative was used to determine whether the business was women-led. The agency is now working to integrate the new criteria to analyze the differences in women business participation through a public dashboard that uses various indicators, such as sector, region and value of contracts. Defining and recognizing women businesses is the first step to making public contracting more gender-responsive.
Colombia has also created a register of small and medium-sized enterprises and methods to differentiate the award criteria. Women businesses will be prioritized in below-threshold awards and additional criteria can be included based on needs identified through market studies. This serves as a signal for local governments to set tender requirements aligned with their local reality, while keeping them transparent and competitive.
Implementing the new provisions will not be easy as 70% of public contracting happens at the municipal and departmental level. It will be key to explore what works locally. To build a system that responds positively to gender criteria, the regulatory changes are being accompanied by local pilot projects in rural and urban areas.
Since 2020, local governments such as Palmira – where one in four rural associations list women as legal representatives – have developed action plans to increase the number of small and medium-sized enterprises and women-led businesses that receive public contracts.
They organized working groups and business meet-ups to connect local producers with logistics vendors and existing suppliers of the city. Over almost a year, public officials analyzed the procurement records of its school meal program and the barriers preventing women businesses from being awarded contracts. They reviewed the products that were purchased as part of the program and the vendor list to understand potential opportunities for participation for women businesses. In a joint working group between different agencies of the city, they changed certain items on the menu and included specifications that allowed vendor associations led by women to join the supply chain.
The pilot also identified a large number of women businesses providing products such as coffee, tomatoes and herbs. At the same time, they found some items were being bought abroad that could be offered by local associations led by women, increasing their market knowledge and opening up opportunities for these businesses. They also discovered that women actually were leading businesses even though it didn’t seem that way on paper.
Bogotá also piloted creating gender progressive processes. It established timelines and minimum percentages to increase the participation of women businesses in different markets (building on legislation 332/2020).
For example, starting June 2023, nearly 14% of all public works awards, a sector with traditionally little participation, will have to go to women businesses. Bogotá will also continue a project that promotes SMEs led by women in the city’s public contracts.
The main lesson from this process is that inclusive procurement reforms should start with defining targets and measuring how the existing system behaves when using gender responsive procurement criteria. While the data is helpful for analyzing and guiding the changes, introducing new data fields can be a complex process.
The experiences of Palmira and Bogotá have informed a guide that OCP developed with the support of the Prosperity Fund of the British Embassy in Colombia, as part of a three-year project to implement open contracting at the local level. The guide explains best practices on how to integrate gender responsive criteria and ensure that local procurement systems are fast, open and inclusive to women businesses.
The pilot projects have helped identify challenges in relation to the size of the cities. In smaller cities, it was easier to link its agencies and external actors to create change, while the promotion of these policies at the subnational level is more complex, requiring a longer implementation timeline.
Working with the Prosperity Fund of the British Embassy in Colombia, we will continue to support the practical application of the regulations so that public officials can incorporate gender responsive procurement and increase opportunities and participation to support women businesses. Other actors such as UN Women are also implementing projects to strengthen the participation of women in public procurement in the country.
The challenge will be to ensure that the legislation will be implemented in the rest of the country as well. We hope that the lessons learned in the pilots from Bogotá and Palmira will help inspire similar strategies elsewhere. The state of Valle del Cauca has already shown interest in Palmira’s experience and plans to work on a local strategy. Open data will be the key to tracking what happens on the ground, identifying new strategies and continuing to refine the approach to increase women’s participation in procurement. What can’t be measured can’t be changed, and if the data doesn’t exist, it can’t be measured.