Dr. Paul Davis:

Procurement in the public sector is often seen as a very traditional tendering role. In terms of the set of activities in place in it, it can contribute significantly more than just the tender; it is a wider process. What we see in the public sector is a lack of the use of the full range of the procurement process. In many cases of procurement in the public sector, engagement with suppliers through pre-market engagement or through ongoing contract evaluation does not take place.

In the past three to four years the Irish public sector has formally moved to a more centralised approach for procurement, yet research throughout Europe and elsewhere has shown that centralised state procurement can lead to a stifling of innovation and a reduction of competition and certainly does not allow for local needs and the increased participation of SMEs.

The general approach of Irish public procurement is to deal with the tactical issues of price and delivery and forgo the investment in strategic activities. There is some evidence of a cross-over between the jobs strategy and public procurement, but in other areas we are not seeing as much of a cross-over on policy into public procurement as we should.

In a recent review carried out for Enterprise Ireland I noted that there had been no follow up on policy implementation from 2009, where we had procurement of innovation. No key performance indicators had been put in place once that policy had been brought forward and there had been no monitoring of the policy over a five year period. Fve years later, we have no results of a positive or negative impact which we could measure coming from that policy being implemented. That is consistent with the public procurement policy we see.

In the programme for public sector reform, published in January 2014, there is less than one paragraph in four pages of text on public procurement that refers to SME participation. In that paragraph it is stated the Office of Government Procurement will only address policy which, to date, seems to have been Circular 10/14, with very little evidence that other policies will be addressed. It looks like the Office of Government Procurement has succeeded in ticking the box for policy implementation on a procurement plan that runs for two years.

The following are recommendations I have made to Enterprise Ireland and others over a number of years.

All future policies aimed at suppliers should be mindful of the significant differences within the SME sector. In a survey carried out by DCU over three years ago for the Office of Government Procurement and the national procurement service it emerged that 50% of companies competing for public sector contracts were micro enterprises. However, they do not form part of any policy we have seen to date. The State refers to small and medium-sized enterprises but not to micro enterprises in this regard. These are enterprises with between one and nine employees.

Clear key performance indicators for SME participation should be set for all public procurers. To date, no key performance indicators are used in any public sector body for the level of participation of SMEs or indicating what the level of participation of SMEs should be. Even if they were put in place, there is no contract monitoring to ensure they would be met.

Clarity needs to be provided from a Government perspective on the intended outcome of a policy when a public procurement process is being put in place. It is not always clear how public procurement supports policy objectives, in respect of which it should be upfront.

The Office of Government Procurement should set out clear rules and roles as to how collaborations might occur. I understand some progress has been made in this area with the Competition Authority but question marks remain over how small companies can form consortia and bid. Training on the issues such as consortium-building should also be provided. Certainly, procurers should be required to set targets related to market intelligence and gathering data at the outset of each procurement depending the size of the market, the level of participation by micro-enterprises and what needs to be done.