Mr. Dave O'Reilly:

To respond to Mr. McNamee's comment, I note that we had to proceed with a legal action because we felt we had no other route to take. There is no such thing as an ombudsman or an appeals process. If one finds something wrong in the way the tender is set out, that is simply the way it is. We had no other option. If one looks at the food industry, there is no Irish food supplier supplying the Defence Forces, the HSE or the Irish Prison Service. They are all supplied from outside the State. In the Chair's constituency the cash and carry in Tullamore which was 150 years old had to close as it could not tender for any business and 30 jobs were lost.

We looked at all these things and said we could not let this happen to our business. That is why we took this very expensive route. We did not want to do that. We brought up the matter of the way with which VAT is dealt with the Office of Government Procurement. The officials there said it is none of their concern.
People do not understand that a lot of the VAT is being returned to Her Majesty's exchequer because under the VAT rules, if the turnover is less than €41,000 per annum, the VAT must be returned to the jurisdiction in which the invoice was raised. They may make a 10% saving on purchasing that item from a UK supplier or somewhere else, but there is a 23% loss to the State as well as the jobs that are lost. The pork products in our hospitals come from Spain. Our pig farmers are on their knees and we are buying from Spain. It makes absolutely no sense.
They are aggregating contracts together and the OGP is saying it is helping SMEs by breaking the contracts into lots. I will give a classic example of how a lot would be broken up. A stationery supplier supplies stationery, toners and inks and copier paper. The OGP decided to break this into three separate lots: paper for the entire country; toners and ink for the entire country; and stationery items for the whole country. One of its stated aims was to reduce the administrative burden on the State, but the burden has been tripled. Instead of having one supplier there are now three. As they are for the entire State, each of these lots is now so big that they all breach the €125,000 limit. This pushes them into the Official Journal of the European Union, meaning that tendering must also be open to companies outside the State.
The people who are purchasing this stuff are not working from one common budget. Cork County Council still purchases out of its budget, as does Laois, but they are aggregated together as if they were one. That is how they are claiming to break it into lots in order for the SMEs to compete. It is untrue. It is just pacifying us; a way that they can come in here in a minute and say them have broken it into lots. The way they do this is ridiculous.