There’s a popular parable about social conditioning and organisational culture called “The Five Monkeys’ Experiment”. The experiment describes a scenario in which researchers place five monkeys in a cage. In the centre is a ladder leading to a banana hanging from the ceiling. Whenever a monkey tries to climb the ladder to reach the banana, the researchers spray all the monkeys in the cage with freezing water. Soon, none of the monkeys dared climb the ladder, even after the cold-water spray had been switched off. New monkeys introduced into the cage are attacked by the others whenever they attempt to get to the banana.
This experiment paints a picture of South Africa’s procurement sector and how procurement knowledge has been kept away from the people who need it the most: small to medium-sized enterprises (SMEs). In South African procurement, the ‘sprinklers’ are complexity, jargon, and gatekeeping. The experimentees who stopped trying are the SME founders who assume the tender process wasn’t built for them. And in many cases, no one ever turned the sprinklers back on – but nobody checked either.
“I think procurement knowledge has been doctrinised in a way that people are not supposed to know what you must do to get a bid. How should they price their services correctly so that tomorrow they are the ones that win the tender?” says Lerato Sebata, Founder and CEO of ROI Integrated Group.
What SMEs Don’t Know about the Tender Process and What It Costs Them
Most SMEs don’t know how bids are scored, how to price competitively, what qualification criteria they need to meet, or how the point system works. The result: companies submit tenders that were never going to succeed, not because the work was beyond them, but because the submission was structurally wrong.
You’re not going to get access to opportunities sitting at home searching online only. What are the criteria you need to look into so that your company can better participate? My aim is to literally bring that knowledge to the people, to the masses,” explains Sebata.
Some of the issues that affect SMEs are:
- Tender Size: On average, tenders are too large and make it difficult for SMEs to bid.
- Payment timing: Delays in payment once SMEs have fulfilled their obligations affect cash flow and the sustainability of the business.
- Subcontracting: A lack of regulation of contractual agreements opens up room for the exploitation of SMEs.
- Upfront financing or payments: SMEs are not always able to bid for tenders because they cannot get any up-front financing.
Lerato also outlines that other issues SMEs face in the tender process include competing against larger businesses with 15 years of proof of work. Because the tender sector is a trust-based industry, businesses that showcase a longer business ‘life’ will always get preference from procurement teams, who don’t always account for the gap between a 2-year and 15-year business.
Why Incubation and ESD Programmes are Not Closing the Knowledge Gap
Incubation and ESD programmes are supposed to play a critical role in closing the procurement knowledge gap for SMEs. However, there is a big discrepancy between what they promise and what is delivered. She says, “In these incubation programmes, that’s what is taught, or rather preached. However, the focus is in-depth; it’s more of an overall business thing. Until they (SMEs) have to go there and fend for themselves and realise they need to have their financial statements ready.”
Once an SME leaves an incubation programme, the post-programme support is non-existent. They lack depth in their knowledge, and there is no infrastructure to sustain what they have learned.
Another assumption that hurts SMEs is that ESD beneficiaries are inexperienced. Sebata challenges this assumption and says that ESD participants are typically established businesses run by experienced CEOs. They are only in the programme because they have recognised a particular area of development in their business.
“These CEOs know what they are doing; they are qualified. They need some form of development in a particular business area, and that’s why they apply for ESD programmes,” she says.
The Set-Aside Tender System South Africa Needs
Sebata makes a pointed distinction between preferential procurement points – which exist but don’t enforce transformation – and set-aside tenders, which would reserve specific opportunities for disadvantaged groups.
In South Africa, a “set aside tender” refers to government projects reserved for designated groups (e.g., small, youth, or women-owned businesses) to promote inclusivity. This is governed by Section 217 of the South African Constitution, which dictates that procurement must be fair, equitable, transparent, competitive, and cost-effective.
The argument is that the regulation exists, but there are no enforcement targets, meaning transformation remains optional. And optional transformation doesn’t happen consistently enough to change the landscape.
“If we enforce this thing of the set-aside tenders, it’s going to help – because now every procurement department will have a target they must reach. It’s not currently in there as a criterion right now, it’s just preferential procurement points,” says Sebata.
What Democratised Procurement Knowledge Looks Like in Practice
What does it actually look like when procurement knowledge reaches the people who need it? In practice, it means approaching procurement like you would an exam. SMEs need to take a structured readiness approach to procurement before submitting their applications.
From a systemic perspective, democratising procurement knowledge would mean making public and private tender data, laws, and processes universally accessible, understandable, and actionable. It would also mean bringing buyers and suppliers into the same room, simplifying the language gap between what procurement teams write and what suppliers understand.
“We are saying, let’s take you through the enrolment process so that you pass an exam that you went through an enrolment process for. If I give you a tender and say submit, and you’ve never done this before, what are the chances of getting it right?” Sebata says.
Procurement Literacy as Economic Infrastructure in South Africa
Procurement literacy is not a training programme; it is infrastructure, as essential to economic participation as access to capital or connectivity. When capable businesses can’t access opportunities because of a knowledge gap rather than a capability gap, the economy loses. This is where the SME Funding Summit comes in.
The SME Funding Summit is not a generic event but rather a place where policymakers, corporates, and the SME ecosystem can gather to close the knowledge gap in real-time. Buyers, funders, policymakers and SME founders in the same room, speaking the same language.
“My aim is to ensure we impact as many black-owned businesses as possible with the procurement knowledge that allows them to access markets and opportunities and be able to be procurement-ready. If you’ve been sitting outside the procurement system wondering whether it was built for you, the SME Funding Summit is where you find out it was,” Sebata concludes.
