Frank O'Rourke (Kildare North, Fianna Fail) | Oireachtas source

I welcome the opportunity to propose this Bill along with my colleague, Deputy Darragh O'Brien, who has done outstanding work in this regard in recent years, particularly during his time in the Seanad. In our view, it is very important to bring forward this Bill to help deal with the issues and anomalies that currently exist in regard to public service contracts going out to tender in a way that allows the SME sector to tender for them competitively and to have a level playing field. That is not currently the case in all situations and this Bill is purely motivated by trying to ensure the SME sector, which employs over 900,000 people in Ireland, can compete for these contracts and tender competitively with a view to, hopefully, winning such tenders within the EU framework guidelines for the Single Market, which is very important for the economy at the local, regional and national level.

The State currently spends approximately €12 billion on services, goods and works annually. That is a lot of procurement and it is, therefore, very important that as much as possible of this can be fed back into the economy and not haemorrhage from the national economy. The social value clause works exceptionally well in other EU member states such as Denmark, France, Italy and Germany. It is very important that the barriers currently in place in regard to the SME sector being able to tender for these contracts are considered with a view to having them taken on board in a positive way. For example, many businesses have contacted me, Deputy Darragh O'Brien and other colleagues to explain there are legal barriers and that limits on the value of the work the businesses have done must be reached before they can compete for a tender. In essence, when another company takes the work as the main contractor, the Irish company ends up working as a subcontractor, which can have a negative impact, as we all know from our experiences of industry.

It is important we work positively and collectively to progress this Bill and I hope it will get the support of the House. We are open to considering amendments, changes or technical proposals that may be put forward to strengthen the Bill. As recently as before Christmas, we found the libraries contract was not tendered in such a way as to allow the SME sector to compete for it competitively. It is a very good example. If a contract is put out in a way that will allow the SME sector to compete for it, Irish companies have a chance of winning it. Some €14 million of that contract went to a UK-based multinational which has a turnover of €2 billion. If that contract progresses, and it may, there is the potential for 50 job losses across counties like Kildare, Kilkenny, Dublin, Sligo and Limerick. That is very negative and is something we have to work to avoid in the future.

When we consider the potential 50 job losses and the possible business closures, we must also consider the negative impact in terms of lower spending in the local economy and the fact those people may have to draw social welfare and may not be able to keep up with their mortgage repayments, or may have to draw on the State to pay their rent through rent supplement. We ask that all this be taken into consideration in regard to assessing the real cost of these tenders from a practical perspective. For every job that is lost, there is a negative impact on the State and the economy, not to mention on the individual and the business itself. This is something we must move to address. We cannot have €27 million leaving the economy and going to companies outside the State, given that is the total figure in that sector for the past two years. This would not happen if the contracts were offered in such a way that Irish companies were able to compete for them competitively. That is what we are striving to achieve in this Bill.

I met a number of Ministers to discuss this issue with them and was disappointed with the response. I also recently met the Office of Government Procurement to discuss the Bill and it is looking to bring forward some proposals and suggestions, which we very much welcome. The main aim of the Bill is to support the SME sector, to support the local, regional and national economy, which we all agree is important, and to work together to make sure the SME sector, together with the economy, is growing and is supported in a positive way through job creation and supporting existing jobs. This Bill is motivated by the drive to ensure this can be done in a fair way within the current guidelines and the current regime.

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