Tendering capabilities and small and medium enterprises participation in public procurement contracts in Uganda: Can knowledge management mediate?

Abstract

This study aims to examine the influence of tendering capabilities on small and medium enterprises (SMEs) participation in public procurement and investigate the mediating role of knowledge management. The study adopts a cross-sectional, quantitative research design. Data were collected through structured questionnaires administered to owners or procurement personnel at SMEs operating across sectors such as manufacturing, services and trade. The participating enterprises were selected from the Kampala Metropolitan Area. The collected data were analysed using Partial Least Squares Structural Equation Modelling to examine the hypothesised relationships. Tendering capability and knowledge management had a significant positive effect on SMEs. Further, tendering capability significantly enhanced knowledge management, which in turn significantly mediated the relationship between tendering capability and SME participation. The cross-sectional design limits the ability to observe changes in relationships over time; future studies could adopt longitudinal designs. The findings indicate that although knowledge management enhances SMEs’ participation, tendering capabilities remain the primary driver. This underscores the importance of strengthening firms’ procedural competence, relational networks and innovation capacity. Enhancing SMEs’ participation in public procurement can promote more equitable distribution of public resources, stimulate local enterprise development and reduce economic disparities. This study advances the public procurement and SMEs literature by providing an integrated, empirical examination of both direct and mediated relationships between tendering capabilities, knowledge management and SMEs participation.