PETALING JAYA: At least 30% of government and government-linked company (GLC) procurement should be channelled to local SMEs, says an industry group.
The Small and Medium Enterprises Association (Samenta) also called for large tenders to be broken into smaller packages to allow more SMEs to compete for government projects.
Samenta president Datuk William Ng said the association has long advocated for at least 30% of government and GLC procurement spending to be channelled to local SMEs.
While the Government Procurement Act 2025 does not specifically provide for such a quota, he said the legislation represents a major step towards greater transparency in government procurement.
"More than anything else, we see the Government Procurement Act as a big step towards greater transparency in government procurement.
"Having greater transparency, established appeal mechanisms and clear rules will mean more opportunities for genuine businesses while minimising anti-competitive actors and middlemen that add very little value," he said in an interview.
The Act, which was passed by Parliament earlier this year, has yet to come into force pending gazettement and the announcement of a commencement date by the Finance Minister.
The Federation of Malaysian Manufacturers recently called for the Act to be gazetted without delay, saying it would help improve transparency, accountability and competition in public procurement.
Other stakeholders, including governance advocates, economists, consumer groups and SME representatives, have also expressed support for the legislation, while stressing the need for effective implementation and strong safeguards.
Ng said procurement decisions should be based on value and innovation while supporting local SMEs and entrepreneurs.
He also urged the government to fully digitalise the procurement process and standardise qualification criteria to improve transparency, efficiency and ease of access.
"We need a fully automated, transparent system that tracks tenders from publication to final payout," he said.
Ng noted that many large public tenders come with stringent financial and track-record requirements that automatically exclude capable micro and small enterprises.
To address this, he proposed that mega projects be divided into smaller, modular contract packages where feasible, allowing more SMEs to bid directly or form consortiums to participate in larger projects.
He also called for implementation rules requiring major contractors to allocate a portion of subcontracting work to registered local SMEs, coupled with prompt-payment provisions to protect smaller businesses.
"This will help ensure SMEs are not pushed out due to long payment terms," he said.
Ng said procurement reforms should form part of Malaysia's broader efforts to build a high-value, high-trust economy.
He added that Samenta would continue engaging with both the public and private sectors to ensure the Act delivers meaningful opportunities for SMEs as it is rolled out.
