Jack Wall (Kildare South, Labour)
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I appreciate the Minister of State with responsibility for this matter being in the House to take this issue. The programme for Government states: "We will reform public procurement to become a tool to support innovative Irish firms and to allow greater access to Irish small and medium sized businesses." In a recent article in The Irish Times the Minister of State acknowledged, rightly, the concern that some small firms may be squeezed out of the public procurement market by centralised frameworks. He stated: "I am actively working with the small and medium enterprise sector to ensure that SMEs are better prepared to bid for public service contracts and barriers to their tendering are being identified and addressed."

Several of these SMEs have approached me. In Ireland there are approximately 120 such firms involved in the provision of copiers and printers etc. to the education system. These firms have approximately 2,500 employees. They maintain they are being squeezed because of the central framework mechanism. They provided an illustration of their concerns relating to the forthcoming tender process for managed print services. The criteria adopted as part of the tender process effectively eliminated 90% of these firms from the beginning because of the requirement of a minimum average turnover in the previous three yeas of not less than €10 million. Over the years all of these groups have built up a wonderful relationship with the schools and other organisations with which they have been dealing. If we are to adopt this central framework we must ensure that this point is not overlooked.

In many cases involving the provision of printers etc. there is a maintenance service programme as well. Some service users, including principal teachers, end up ringing someone in Hong Kong to get direction on how to work a printer. Naturally, when the language breakdown arises the telephone at the far end is put down but who suffers as a result? The school and the children in the school. This is a considerable problem which must be addressed according to the groups that have approached me. I readily accept the comments of the Minister of State in the newspaper recently with regard to his overview of the sector but there is a need to act on this. The Minister of State should follow up with the small and medium sized enterprises and other individual groups and open the door of his office to allow them to present their case.

Brian Hayes (Dublin South West, Fine Gael)
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I thank the Deputy for raising this important matter. He is right to suggest the issue of procurement falls under my responsibility. The national procurement service is part of the Office of Public Works. Since its establishment in 2009, the service has done a tremendous job to ensure that we get better procurement throughout the public sector. The truth is that far too many people are procuring in Ireland. There are too many localised arrangements and there is not enough focus on cost and efficiency. If we are to reach our 3% deficit target by 2015 it will not only involve slashing budgets and new taxes. It is also about procuring better and ensuring that we get better value for money. I am keen to ensure that as many Irish SMEs as possible win these contracts. We are at one on that point.

The Department of Public Expenditure and Reform circular 10/10, introduced by the previous Government, has done several important things. Previously, any contract of €50,000 or less was not advertised on the e-tenders portal. Now, every contract of €25,000 or less is advertised. The big problem facing Irish SMEs is that they are not all registered on the e-tenders portal. How can they bid for something unless they know about it? I wish to use the opportunity of the debate on the issue put forward by Deputy Wall to encourage the SME sector to register with us. All public procurement must go through the e-tenders portal so that we know exactly what is on offer. Circular 10/10 sought to get rid of the restrictive tendering processes through greater use of open tendering and this is very important for small Irish businesses. In the circular we asked people to be proportionate and not to be overly burdensome when it comes to insurance and turnover requirements for SMEs. It is crazy, as far as I am concerned, to say to an Irish SME that it needs a massive amount of insurance before it gets a job, and we will reform that even further.

The fourth matter is trying to subdivide much of the work so that Irish SMEs can get more of the opportunities available. This is a multi-billion euro business. Throughout the Irish public sector, in excess of €16 billion was spent last year on goods and services. It is a great opportunity for new employment.

Fifth, in Circular 10/10, we want SMEs to come together to ensure they could pitch for some of this business. Deputy Wall referred to the managed print framework contract - I apologise I am not reading from my script, which the Deputy should not mind as the speech is the important matter. Six companies were selected in that centralised procurement framework and three of those companies were Irish SMEs that won that framework. My point is that if the Irish SME sector gets its act together, realises what we need from it in terms of better tendering and ensures that it is up to speed on the requirements under Circular 10/10, there is no reason they cannot win this business.

Some 85% of contracts under public sector procurement in this country are won by Irish SMEs. I want more of them to be won by them. Despite the headlines one sometimes reads, 95% of all the money we spend in this area is retained in this country. It is my ambition - I say it unapologetically - to get more Irish SMEs winning more of this. They are already doing very well. I want them to get the biggest possible share of the market that they can get.

However, we also must drive price. We must get the best value for the Irish taxpayer. We must ensure the savings we make are all part of the national effort to balance our books and get the country's expenditure and taxes on an even keel. For too long, this issue was not taken seriously. Better public procurement, more central procurement and a much more professional focus on procurement across the system can deliver that change.

Jack Wall (Kildare South, Labour)
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I do not doubt the sincerity of the Minister of State and his approach in this matter, but the facts, according to what I have been told, do not bear up what he stated on it. The NPS stated that some of the SMEs could submit a joint tender.

Brian Hayes (Dublin South West, Fine Gael)
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Yes.

Jack Wall (Kildare South, Labour)
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That is not a possibility. They are rivals each day of the week and it could take two to three weeks to put a tender together

I agree with the Minister of State. What I am asking is that he goes the next step to ensure the National Procurement Service enters into dialogue with the SME national organisations to give them the opportunity to take up his challenge. If the NPS continues to state that unless a SME has an income of €10 million over the past three years it is not at the races, then what the Minister of State is saying will not hold up and the SMEs in Ireland will fall by the wayside.

There is no sense in saying that it can happen if we do not underpin it to ensure that it does happen. I am asking the Minister of State, whose side I am on in the challenge we face, not to rule out our own companies because we put a mechanism in place that the previous Government thought was appropriate. That is no reason to say that we think it is appropriate. We must accept the challenge to ensure the position of SMEs. With 2,500 workers, we cannot wipe them off the slate as simple as that.

Brian Hayes (Dublin South West, Fine Gael)
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I am grateful to Deputy Wall for raising this issue. If we are to get value for the Irish taxpayer, this is a crucial debate this country needs to have.

I very much agree with Deputy Wall as well. We cannot allow any of these jobs to be lost, but the only way those jobs will be saved is by better procurement and people understanding our requirements as well. All over the country, we have been having "Meet-the-Buyer" events, which are all about us explaining to the small guy what he needs to do for us in terms of making the tendering work. I accept it is a dialogue between both sides. The SMEs are crucial in that. They are on the NPS board. They are well represented. I am conscious of their views.

Deputy Wall is correct when he refers to this lunatic requirement that one needs €10 million turnover in order to pitch for business. That is because the local procurer, who is inserting that stipulation, is not applying Circular 10/10 in a proportionate way. If I am looking for a contract for €10,000, it is madness to state that one needs to have had a €10 million turnover for the past three years. That is because the local procurer has not the confidence to do as we suggest he should be doing - altering the terms so that the Irish SMEs can win some of this business.

I very much agree with Deputy Wall. We are at one on this. It is about dialogue. It is about ensuring that we meet those concerns of the Irish SMEs and I assure the Deputy that am absolutely up for that task.