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New report lists 10 strategies to increase diversity in federal government contracts

Betakit with Barbara Orser 23 July 2018

While many women launch and grow businesses in Canada, the majority of small and medium-sized enterprises owned by women are less likely to enter contracts with the Canadian federal government.

This was one of the key findings in a recent study conducted by Professor Barbara Orser and a research team at the University of Ottawa’s Tefler School of Management, in collaboration with Public Services and Procurement Canada.

The report, Benchmarking SMEs as Suppliers to the Government of Canada: Inclusion, Innovation, and International Trade, aims to informs policies and practices to increase the diversity of SME suppliers on government contracts.

Based on the study’s findings, the report outlines 10 action-oriented strategies, providing a recommended roadmap to increase diversity and the overall representation of women-owned firms in federal government contracts.

“This is the first study to simultaneously examine gender of firm ownership, breadth and types of innovation, and federal SME suppliers,” said Orser. “While majority women-owned businesses are underrepresented as SME suppliers in some sectors, this was not the case in all sectors. Compared to SME non-suppliers, SME suppliers to the Government of Canada are significantly more likely to be innovators.”

The report recommends developing sector-specific strategies to help increase the federal government’s contracting with women business owners from 10 percent to 15 percent—though it also notes that a gender gap varies by sector. In some, there is no gender gap.

One of the recommendations include reviewing eligibility criteria for federal innovation support programs and establishing set-aside programs for women-owned SME suppliers. When it comes to refining eligibility criteria, the report recommends adopting the criteria created by the United Nations in order to reduce the “façade” of inclusion and diversity. It also suggests that the government should introduce gender-sensitive procurement training programs in collaboration with organizations such as the Canadian Aboriginal and Minority Supplier Council (CAMSC) and Women’s Enterprise Organizations of Canada (WEOC).

When it comes to promoting efficient contracts between SME suppliers and the government, the report indicates the need for the federal government to support procurement analytics, which can inform policymakers about the trade-offs between contracting efficiency and the federal mandate to increase the diversity of SME suppliers.

“Without analytics and reporting, strategic procurement policies may remain aspirational,” the report reads. “Lack of targeted and granular analyses gives license to entrenched perspectives that often reflect anecdotal experiences. A consequence can be misinformed policy.”

For the next phase of their research, the University of Ottawa researchers will focus on developing strategies to enhance entrepreneurial ecosystems for Canadian SMEs, including for women and Indigenous-owned businesses.

“Public Services and Procurement Canada is pleased to have collaborated on this study with the University of Ottawa’s Telfer School of Management,” said Arianne Reza, assistant deputy Minister for Procurement at Public Services and Procurement Canada. “As one of the largest buyers of goods and services in Canada, we are always looking for ways to increase the participation and diversity of small and medium enterprises in the federal government procurement. This study provides valuable insights and recommendations to consider.”