Mr. Aidan Sweeney:

I will begin by picking up on a point made by Dr. Davis about small businesses. I emphasise that what we are really talking about is small and micro enterprises, which is often confusing when we examine the procurement directives. Their definition of an SME corresponds to a large company in an Irish context. We need to be aware of this.

I joined IBEC six and a half or seven years ago. We have since seen a tremendous amount of change in the public procurement system in Ireland, not all of it positive. The economic downturn has had an impact, especially on the capital expenditure side, and we have seen a rapid reduction in the number of projects undertaken. This has had an impact on the marketplace, of which we also need to be conscious.

There was an emphasis on unilateral cuts. In February 2009, a circular implemented an 8% cut that particularly harmed small indigenous software companies. There were unilateral cuts and procurement was seen as a soft target. With the establishment of the national procurement service and now with the establishment of the Office of Government Procurement, we see greater centralisation and aggregation of contracts and the drive for efficiency through that. This is supposedly moving from the battle over price, which is a major constraint barrier to SMEs bidding in, to value for money. We would like to see many of the efficiencies on the administrative burden side rather than access for SMEs to win those contracts. There is a major concern for SMEs in terms of the lack of a level playing field and the removal of local buying knowledge. This applies to companies that already have public contracts and are concerned they will see the market and the contact point changing, and to companies looking to bid for the first time. It is important that the Office of Government Procurement category councils under its jurisdiction and the sector leads across health, education, justice and defence establish more of an ongoing practical engagement with SMEs about what they will buy, who they will buy it from and the terms and conditions they seek. There could be more dedicated meet the buyer events and we would like to see someone on the category councils responsible for the SME community within those areas. Then, they can look at why SMEs that traditionally sold in are no longer able to win contracts and, if so, address the point.

We would like to see IBEC involved with the Office of Government Procurement through the SME procurement working group. Circular 10/14 was published earlier this year on improving SME access to public sector markets. The key for us is to see it fully implemented across the public sector. That is a start but there is much more we can do to improve the market through encouraging innovation and take-up from some of the newer companies, as well as looking at procurement as an export market. References in Ireland are very important for such companies to secure international contracts through the public sector market, which is a regulated market and the rules apply across Europe. In terms of using the administrative concerns, we would like to see greater use of e-procurement and technology to reduce costs, paperwork and constraints. We would like to see the Government producing an e-procurement strategy. The last such strategy was developed in 2001 and we would like to see one that goes beyond what is set out in the EU procurement directives in line with the national payments plan to allow full submissions and payment through the e-procurement process.

We would like to see an improvement in the standardised terms and conditions so that companies are familiar with the documentation, know how it is applied and know the criteria used. We increasingly see evidence of different terms and conditions being sought where these may not be relevant to the conduct of the contract. We would like to see more consistency about the indemnity liability provisions because they are a barrier. Once companies see them, many will walk away from bidding. Addressing such concerns will bring greater efficiency and this will benefit the taxpayers. We would also like to see a provision dealing with the framework contracts, particularly in regard to the use of category councils. We would like to see the comply or explain principle applied to the use of lots and how they are divided. Someone should have to explain why the contract has not been divided into lots and consider it across regions rather than categories to bring in more localised SMEs into the process.

That would bring more localised small and medium enterprises, SMEs, into the process also.

We would like buyers and the category councils to produce both annual and multi-annual procurement plans. This would help to inform the market and SMEs in looking at what strategies they should use to position themselves in order to bid for contracts. It would also help them to form consortia. As Dr. Davis indicated, the publication of new guidelines by the Competition Authority that will help SMEs to form consortia will be key in this process, as will training. We must ensure the development agencies will have adequate supports available to help SMEs, companies and client bases in seeking training.