Oireachtas Joint and Select Committees

Tuesday, 11 December 2012

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Eligibility of Small Firms in Tendering for Capital Projects: Discussion with Office of Public Works

1:40 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Ba mhaith liom míle buíochas a ghabháil as ucht an cur i láthair cruinn. I am trying to get my head around a number of issues. What proportion of the complete public procurement within the State is carried out by the OPW? I understand it is responsible for the procurement of common goods within the State. On an annual basis, I believe that public procurements on the island of Ireland amount to approximately €20 billion. Ms McGrath mentioned a figure of €160 million in respect of the OPW's construction activities, which obviously would represent less than 1% of the total and I am trying to get an understanding of this issue.

One of the major subjects for discussion for this joint committee on a regular basis is that Ireland appears to be an outlier with regard to the level of procurement that leaves the State. We win prizes for this etc. but as a citizen and a representative of small to medium enterprises, I note this is not the type of prize one wishes to win. Can Ms McGrath provide members with details of comparative analysis on the level of extra-State procurements that occur through the OPW's functions and through those of another European economy of similar size? What have been the trends with regard to extra-State procurement versus internal State procurement over the past three or four years? Is the position improving or getting worse in this regard?

There has been a feeling within this State that due to the pressures we are under economically, contracts are being rolled up which then make them less accessible to small and medium-sized businesses, especially microenterprises.

The OPW has responsibility for 2,200 buildings. What number of them would have upward-only rents? I know of a business in Donegal that was forced out of business due to the fact that there was an upward-only rent on a State building in a harbour. Is it the case that the OPW pays upward-only rents and charges upward-only rents? What is the proportion of buildings affected in that regard?

Does the OPW help the enterprise boards train microenterprises in how to use eTendersand to tender in the best fashion? Does it take into consideration that a contract which might be cheaper could put 20 people out of business locally and there is a larger cost to the State involved? Are social clauses included such as for the long-term unemployed? Is compliance on wage rates taken into consideration? We often hear that businesses in the North of Ireland might deliver a contract in the Republic but they would not comply with wage rates in the Republic which gives them an unfair competitive advantage. How does the OPW deal with that?

It has come to my attention in recent days that an SME had to go to the High Court in a case taken against a large semi-State company to get it to pay money owed. It finally got paid just before the High Court came to hear the case, which meant that the small business was left with the legal costs. I learned subsequently that because the semi-State had not paid other moneys owed, a small business had gone out of business. Is compliance on payment within 15 days a consideration for the OPW? If subcontractors are involved in procurement, are they responsible for 15 days compliance as well? They are enough questions to keep Ms McGrath busy for a while.

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