Malaysia’s efforts to develop Bumiputera companies through public procurement policy hold out potentialities and pitfalls. The construction sector has been a major focus of Bumiputera development policies, and continues to offer upward mobility opportunities especially for technical and vocational education and training (TVET) graduates. The approach, with reservation of G1 contracts – the smallest out of seven grades – exclusively for Bumiputera contractors, and quotas and price preferences for medium to large contracts, stands out globally for its form and magnitude. These core elements have remained quite constant for four decades, but special initiatives, such as the Mass Rapid Transit’s (MRT) ‘carve out and compete’ and young entrepreneurship programme, and a 2019 introduction of time limits on G1 contractor licenses, have occasionally emerged.

This report presents an overview and update of pro-Bumiputera policies within public procurement, and the findings and implications of an original research project undertaken in April-August 2021. The research set out to survey and assess the distribution and characteristics of Bumiputera contractors, to investigate the effects of public procurement on Bumiputera company development, to evaluate the policy and make some recommendations moving forward.