Michael D'Arcy (Wexford, Fine Gael)
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Question 75: To ask the Minister for Enterprise; Trade and Innovation if he has conducted a systematic review of the success of Irish small and medium enterprises in getting public procurement contracts; and if he will make a statement on the matter. [36452/10]

Billy Kelleher (Cork North Central, Fianna Fail)
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The Government is working to ensure that SMEs can access public sector contracts in Ireland and abroad. As well as being an important source of income, winning public sector contracts here can have a very positive impact when companies are looking to win contracts abroad. We are continuing to drive the development of innovative public procurement processes across the public sector that improve access for SMEs.

The 10-Step Guide to Smart Procurement and SME Access to Public Contracts was published in July 2009 and provides practical guidance to public bodies on measures which could boost the involvement of SMEs in public procurement. In 2009, Enterprise Ireland established a public procurement team to focus on procurement opportunities in Ireland and abroad for indigenous companies and to accelerate knowledge within contracting authorities in the public service of the potential of these Irish companies. Some 660 Irish companies took part in Enterprise Ireland's International Markets week recently where EI's public procurement specialists were present to discuss public sector procurement opportunities.

I am speeding through this because it is a very good answer.

Deirdre Clune (Cork South Central, Fine Gael)
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That is for Members to decide.

Billy Kelleher (Cork North Central, Fianna Fail)
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The Minister for Finance has issued guidelines to public contracting authorities aimed at operating their tendering processes in a manner that facilitates increased participation by SMEs, while ensuring that all purchasing is carried out in a manner that is legal, transparent and secures optimal value for money for the taxpayer. The guidelines also highlight practices that are to be avoided where they can unjustifiably hinder small businesses in competing for public contracts.

There has not been a review of the success of Irish small and medium enterprises in obtaining public procurement contracts here. However, in the context of the foregoing initiatives which have already been taken in relation to improving tendering opportunities for SMEs, officials in the Department are engaging with the national public procurement policy unit to explore how statistical data can be captured going forward to measure the success rate of Irish SMEs in tendering for public procurement contracts.

In terms of foreign public sector contracts, in 2009 some 80 overseas public procurement contracts worth over €210 million were signed with Enterprise Ireland input. Already this year, 63 contracts have been won and Irish firms have secured €200 million worth of contracts with the Olympic Development Authority in the UK. The Minister, Deputy Batt O'Keeffe, was in London again last week encouraging Irish companies to look at the Olympic Games as an opportunity to win overseas contracts.

Deirdre Clune (Cork South Central, Fine Gael)
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The Minister of State used the word "guidelines" a number of times and said there has not been a review. I think the review will point to the fact that Irish SMEs are not accessing public procurement contracts or orders. For example, 17% of Irish public contracts go overseas while the average for other European countries is 1.5%. Why is that?

Billy Kelleher (Cork North Central, Fianna Fail)
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It is important to compare like with like. It is important to compare data from economies of similar size.

Deirdre Clune (Cork South Central, Fine Gael)
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The Minister of State can pick any country across Europe.

Billy Kelleher (Cork North Central, Fianna Fail)
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Comparing Ireland to Germany, for example, in the context of public procurement is not fair.

Richard Bruton (Dublin North Central, Fine Gael)
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To what country would the Minister of State compare Ireland?

Billy Kelleher (Cork North Central, Fianna Fail)
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I am talking about countries of like size.

Deirdre Clune (Cork South Central, Fine Gael)
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Let us pick a country.

Billy Kelleher (Cork North Central, Fianna Fail)
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Some 95% of all public procurement contracts are filled by Irish companies. We are an open, global trading economy. We win far more contracts overseas than we would if we took the course many people are suggesting and narrowed our focus to make it difficult for others to tender for Irish contracts. We are winning a sizeable share of public procurement contracts, particularly in the United Kingdom, from local authorities and health services.

Deirdre Clune (Cork South Central, Fine Gael)
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The question is about SMEs.

Billy Kelleher (Cork North Central, Fianna Fail)
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These are SMEs. They are small software companies that are winning substantial contracts right across the public sector in the United Kingdom. It is important that we do not say Irish SMEs are unable to tender for public procurement contracts either in Ireland or abroad. They are doing it very effectively and 95% is the figure.

Willie Penrose (Longford-Westmeath, Labour)
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I have some brief questions. First, is it not our problem that we overly adhere to a love of everything European? We are too good Europeans. We try to behave while other countries do not. Second, why do we not unbundle more contracts and make them smaller so that more of our firms can compete for them? Third, why do we put contracts together on a three or four year basis rather than a one or two year basis which would facilitate more of our small firms in terms of competing?

Billy Kelleher (Cork North Central, Fianna Fail)
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We have started unbundling some of the larger contracts to make it more amenable to small and medium firms to tender for contracts. We are looking at this in the most imaginative and strategic way possible. We must understand that many Irish companies, including small and medium-sized companies, are winning contracts abroad.

Arthur Morgan (Louth, Sinn Fein)
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I thank the Minister, Deputy Batt O'Keeffe, for his earlier reply and apologise if I almost got him thrown out of the Dáil.

Is the Minister of State proposing to further segment public procurement contracts? I know some work has been done on this and I welcome it as I have acknowledged publicly. Will the Government tackle the issue of capital construction projects such as school buildings and hospital extensions? That is a huge problem. There are many construction workers and contractors available for work. What is the Minister of State's thinking on that?

Billy Kelleher (Cork North Central, Fianna Fail)
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The Deputy is clearly keeping a very close eye on what the Government is doing. At present, the Government is reviewing the whole area of construction. We are looking at it on a sectoral basis to see where we can make contracts more amenable to the small and medium-sized sector.

Arthur Morgan (Louth, Sinn Fein)
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When will that be done?

Billy Kelleher (Cork North Central, Fianna Fail)
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It is being carried out at present. We are very conscious of the need to make it easier for small and medium-sized firms to tender.

There are some areas of Irish public procurement for which no Irish company can tender because they may not have expertise in the area, may not have the capacity or may not be producing the required product. This is the case in the medical, military and other specific areas.

John Perry (Sligo-North Leitrim, Fine Gael)
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In light of the contracts being awarded, the credit terms being attached and non-payment within 60 and 90 days, will the Minister of State review the credit terms attached by State entities? Many viable businesses are being closed due to the non-payment of debt by public institutions. Extended credit is given by companies. Something needs to be done about these credit terms.

The Department opted out of the review of the extended credit given to State entities and private companies. Will this now be reviewed?

Billy Kelleher (Cork North Central, Fianna Fail)
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This issue was publicised recently. Most State agencies and the State itself pay within 15 days of receipt of invoice. Approximately 97% of payments are made in that time.

Contracts between private companies and individuals is another issue. The State does not get involved in that. Terms of credit is an issue between a vendor and a purchaser.

John Perry (Sligo-North Leitrim, Fine Gael)
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The Department opted out of that.

Billy Kelleher (Cork North Central, Fianna Fail)
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We are conscious that terms of credit are being extended way out and this is putting huge pressure on small and medium-sized businesses, particularly those that are supplying larger companies with products, goods and services. However, that is a civil matter for the people concerned.

John Perry (Sligo-North Leitrim, Fine Gael)
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No, it is not. The Minister opted out of the review of that matter. There should be legislation for that.

Billy Kelleher (Cork North Central, Fianna Fail)
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The State cannot be involved in every aspect of life. When two people are drafting a contract, it is important that there are clear terms and conditions about when payment scheduling is arranged.

John Perry (Sligo-North Leitrim, Fine Gael)
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The Department opted out of it.

Billy Kelleher (Cork North Central, Fianna Fail)
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I am only trying to give advice to the Deputy and to the broader business community. Individual contracts can be drafted and are drafted continually. Until recently the terms of reference were always very vague but credit terms have extended quite substantially. We are conscious of the pressures this is putting on people.