Mr. Ian Martin:

I can give the committee a couple of examples of some of these tenders. We are a small business in the first aid and hygiene business. We deal with many of the big multinational companies operating in this market place. Those multinational companies have, perhaps, 20, 30 or 40 people who are also selling their goods, including the multinational companies who are also based here. From a pricing point of view, the multinationals are in a very awkward position because they may want to charge me €10 for something and charge somebody else €12. They are then trying to control the pricing in the marketplace. They are saying to us that they will give us the price we put in for that tender and that they will give us a margin of X%. That is how they are starting to do pricing which means a fixed price from everyone. They are trying to get the SME to talk to the larger company, so that the SME name gets on the list. It is a bit like me going to my larger competitor and saying, "Mr. Competitor, there is a tender out there at the moment. Would you mind putting my name down on your list as one of the suppliers because we have common goods which we are supplying". My competitor will not do that, rather he will be trying to buy me out. That application is not practical.

The aggregation of contracts is happening. We are specialists in first aid supplies and we have been in the business for about 30 years. The industry is a specialised industry. The safety clothing and first aid industries have been put together. We had a tender last year where we gave some pricing to one of our competitors for the first aid items and we got some pricing for safety clothing. We partly won the contract on the safety clothing but we are not experts in safety clothing. We lost the overall contract because we were told we did not have sufficient knowledge of the first aid market. The person who got the contract is a safety company whom we are supplying with first aid and this is all going to the same customer. The logic does not make sense. Then they said we had left out one line in the tender - because we did not know what the item was - but we did not quote for it. That was the reason we lost the contract.

There is currently a very large contract in our industry. The tender document contains 122 pages of information. One would need an MBA in a couple of subjects to actually understand the document. There are 291 lines of product which are to be supplied and they require a price for every line of product. For example, the multinational company will decide to tender for one of the lines, such as a pen. That company will decide to tender a price of €1 for the pen. It will go to the world-wide market and say it has a contract from the Irish Government for 1 million pens and that it needs them for 10 cent each. They will go to three or four suppliers in the world who will give them a similar pen. They have the world-wide buying power whereas the SME market does not.

We have a small business in the North. We are successful in some of the public tendering businesses in the North of Ireland because they will award contracts of under €30,000 to the micro-businesses. That is a nice big order for an SME turning over €100,000 or €150,000 and an SME can cope with that order whereas an SME cannot cope with an order worth €1 million because we do not have the resources.

An SME going for any reasonably sized contracts here will take on extra people and buy extra vans when the contract may be for two years. However, if the contract is lost after two years, the SME has a van fleet it does not need and workers have to be let go. The loss of a contract involves a massive cost. What they are doing is not practical.