Oireachtas Joint and Select Committees

Wednesday, 21 January 2015

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Operations and Functions: Office of Government Procurement

2:30 pm

Mr. Paul Quinn:

I thank the Deputy for the questions. I can give a better flavour of some of the performance statistics and spend information. The PwC report I mentioned relates to above-threshold expenditure. As part of my submission, I mentioned that the office has been gathering spend information since October 2013. We now have a fairly good picture of expenditure, although it is still a sample. We have a fairly good picture of the profile of expenditure which now takes place across the State.

In that regard, out of our approximately €12 billion, we have analysis at a detailed level for approximately €3.2 billion for 2013. It is approximately a quarter of the total for the sample size. It is statistically valid because it is such a big sample. There is detail of expenditure for some key sectors, including health, education, justice and local government, so it includes much of the infrastructure of the State. It would include gardaí and local authorities, and we have much information for health and the education sector, albeit not small national schools. This provides a good understanding of how the State spends its money.

I can give some headlines on what that means as the above-threshold section only provides a view of the bigger picture. The PwC report draws attention to this.

In terms of small goods and services contracts, they are almost all won within the State. The information I will provide will reinforce this statement. The Minister read into the record of the Dáil the fact that the Office of Government Procurement, OGP, had estimated that approximately 95% of all goods and services spend remained within the island of Ireland and approximately 75% of that expenditure was with small to medium-sized enterprises, SMEs. From the sample that we have in place, we have associated statistics. There was €2.7 billion of a spend in 2013. The good news is that, while this is not quite 95%, 93.34% of all expenditure stayed within the island.

Procurement is all about driving competition and some suppliers that might have had long-standing relationships with small public bodies do not like having to go through public competitions. From the perspective of the taxpayer and procurement, it is a question of fairness, openness and transparency and of bringing a competition to bear, be it small or large, in which people routinely participate. Sometimes, those long-standing relationships must be put to the test on behalf of the taxpayer. Ultimately, this is why the directives and legislation are there. On behalf of taxpayers, they require public bodies to go through this process and buy their goods and services in a fair, open and transparent way. Our competitions often see anywhere between five and ten bidders. As there can only be one winner, sometimes business moves. We do not see the profile changing substantially at an overall level, however, so the business will stay on the island. We are working with the business representative bodies to try to support Irish businesses to understand public procurement so that not only can they win business here, but also look to export more.

I will discuss the statistics on SMEs. Our previous estimate from a small sample was approximately 75%. From this sample size of €2.742 billion, 79% remains with SMEs and just under 21% goes to large businesses. Relative to other countries, SMEs in Ireland do well. Then again, Ireland has many small businesses relative to other European countries.

There is a great deal of good news for Irish SMEs and other businesses, but we want to help them to become better. Ultimately, our office is concerned with delivering value for money for the taxpayer via a competition process. We want to assist SMEs in understanding that process and in developing their skills and capabilities so that they can compete fairly.