Using open data to boost business opportunities for women in Albania

Executive Director Leviz Albania Valbona Kuko

There’s a growing recognition in many countries that public procurement can help narrow the gender gap by giving women more opportunities to do business with government. In Albania, some 26.8% of all businesses are owned by women. But women’s companies account for a small fraction of the suppliers contracted by local governments, according to civil society research that draws on government data.

In fact, only 5% of municipal contracts in Albania are awarded to women-run businesses, a study by the Albanian Institute of Science (AIS) has revealed. And most of those contracts are for small amounts, adding up to only 3.2% of total procurement spend.

This stands in stark contrast to results from the study that showed governments who signed contracts to women get a better deal. For contracts won by women-owned businesses, the gap between the estimated value and the actual contract price is noticeably larger (17%) than businesses owned by men (13.5%).

The AIS conducted the research to start a discussion about how to best help women-owned businesses thrive, after a series of new government initiatives were announced.

Aranita Brahaj, Executive Director of AIS (left)

“A lot of municipalities decided that they wanted to support women in business, mostly through grants and micro-credits,” said Aranita Brahaj, Executive Director of AIS.

So the nonprofit group set out to get a better sense of the market by learning more about the women-owned suppliers who provide goods, works or public services to local governments.

Civil society organizations play a crucial role as public watchdogs in a country like Albania where government corruption is pervasive (Albania ranks 91 out of 180 in Transparency International’s Corruption Perception Index) and the media is heavily influenced by private interests.

To help monitor government policies and processes, AIS developed a series of online portals that gather public data from various government sources (via public APIs, scraping PDFs, and submitting FOI requests) and presents it in ways that are easy to analyze and understand. The portals display information, in real time, about government budgets, public spending, procurement, government officials’ assets, and electoral spending. On the two procurement-related portals, which deal with municipal contracts and the public health sector, Brahaj describes the data as being organized in a way that creates “a passport of information” about each tender. Users can see, for example, information about tender announcements, technical criteria, contract price estimates, application deadlines, procedure type, bidders and their proposals, complaints and cancellations.

For their study on women in procurement, AIS analyzed data, available via their Open Procurement portal, about 4820 tenders awarded at the municipal level between July 2015 and January 2017. The total budget allocated for the procurement procedures was 26.4 billion lek (around US$230 million), while the awarded contracts were worth 22.8 billion lek (86.4% of the budgeted amount).

Women’s participation in tenders was poor across the 61 municipalities, the data revealed. Businesses owned by women won only 256 contracts (5%), which were worth 731 million lek (around US$6.4 million) or just 3.2% of the public money spent on procurement.

The study defined women-owned companies as those with at least one female shareholder. A total of 136 women-run companies were awarded contracts over the one-and-a-half-year period (101 fully owned by women, 35 co-owned with men), while another eight companies were owned by men but managed by women.

The municipality of Cërrik spent the largest amount of its procurement funds with women-owned businesses, signing six contracts worth 125 million lek — 49% of its budget, or 15% of the total value of contracts across all municipalities.

But, among companies with at least one woman shareholder, the biggest contracts tended to go to businesses where the ownership was shared between a husband and wife, or where the husband managed the business. The three highest earning contractors were construction companies.

Larger municipalities appeared to award only small value contracts to women-owned companies: Tirana awarded 3% of its procurement funds to women suppliers, Durres 5.2% and Fier 1.5%. And 11 municipalities did not award any contracts to women-owned businesses.

Businesses with female managers won 169 contracts or 3.5%, which were often of small value (worth 1.5% of total procurement spend). Tirana was the municipality that spent the most with companies run by women at 89.5 million lek (around US$780,000).

In March 2017, AIS presented these findings at a public discussion with politicians, civil society, professionals and experts from various sectors who are engaged in transparency, good governance and gender issues. They sparked a lively debate about how to overcome the challenges faced by women-owned companies and whether positive discrimination for female businesses was fair.

“Why compete in a competition that isn’t fair and where the deal is already done?”. Mirela Arqimandriti

Mirela Arqimandriti, Executive Director of the Gender Alliance for Development Centre, who attended the discussion in March, was not overly surprised by the findings of the AIS study. Most women-owned companies in Albanian are small businesses, she says, so they must take care to invest their limited time and resources where they will be most useful. As such, the perception of public procurement as a highly corrupt sector may deter these entrepreneurs.

“Why compete in a competition that isn’t fair and where the deal is already done?” said Arqimandriti.

The procurement process is complicated, she adds, so women who are managing businesses by themselves probably don’t have the time to deal with such tenders or the money to hire someone who can.

The government can do two things to improve women’s access to procurement opportunities, Arqimandriti says: fight corruption and establish an effective state agency to assist small and medium enterprises.

“There is no proper institution that can help businesses, owned by women and men, with incentives for participation in tenders or other incentives for them to grow their businesses.”

Although several government initiatives have attempted to support women entrepreneurs financially in recent years, the funds have been distributed through secondary banks that charge high interest rates, so the success of these programs has been limited, says Arqimandriti.

At the March event, Arqimandriti proposed that civil society groups organize small training sessions to help women compete by preparing them better for the tendering process. These trainings would include guidance for participants as they submitted proposals for real tenders.

Arqimandriti came up with the idea after her organization took part in, and won, a public tender to provide social activities to a local government. They had to hire a private specialist to make sure they followed the process correctly. Her hope is that the government will one day provide this service for free to small businesses, which are unlikely to have their own internal procurement experts.

By organizing publicly available information about government contracting in a user-friendly way, AIS has been able to conduct analyses to evaluate the effectiveness of policies that seek to foster opportunities for female entrepreneurs in Albania, while tracking the performance of institutions to which these policies apply, and start a discussion about how to grow women’s participation in the procurement market.