Mary Lou McDonald (Dublin Central, Sinn Fein)
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8. To ask the Minister for Public Expenditure and Reform his plans to increase access by indigenous small and medium enterprises to public procurement contracts, in view of the impending requirements under the new EU rules agreed in January 2014. [42056/14]

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We touched this issue in the course of last week's debate. At that stage I raised with the Minister of State the importance of increasing the access of indigenous small and medium-sized enterprises, including micro-enterprises, to public procurement contracts, in view of the new EU rules agreed in January 2014.

Simon Harris (Wicklow, Fine Gael)
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Some of my prepared reply is the same as I have already outlined, so I will take that as noted regarding the objectives of the EU directives.

The Office of Government Procurement is currently exploring policy choices as part of the transposition process. In this context, I have launched a public consultation on the new directives. It is open to everybody - not just specific people - to give their views on how they wish to see these directives transposed, and I urge everybody to do so. We are accepting written submissions up to 12 December. Consideration will be given to the responses received when drafting the statutory instruments to implement the EU rules in national law.

Many of the changes in the directives on SME access to, and participation in, the public procurement market were foreshadowed in Circular 10/14 on initiatives to assist SMEs in public procurement, which we have discussed previously.

This policy initiative aims to open up opportunities for small businesses to bid for State business by simplifying and streamlining the public procurement process and reducing the administrative burden on businesses wishing to tender for public contracts.

The circular contains guidelines setting out relevant and proportionate financial capacity, turnover and insurance levels for tendering firms and the subdividing of larger contracts into lots to enable SMEs to bid for these opportunities. In addition, the guidelines encourage SMEs to form consortia where they are not of sufficient scale or capability to tender in their own right. The aim is to encourage Irish SMEs, where necessary, to form alliances and networks to ensure they can tender competitively for business. The guidance also encourages suppliers to use fully the e-tender system and to avail of its facilities for registration, e-tendering and automatic alerts for future tendering opportunities. These are facilities which are aimed at easing the administrative burden of suppliers in tendering for public contracts.

We have established an SME working group with industry representative bodies, including ISME, IBEC, Small Firms Association, SFA, Chambers Ireland, Construction Industry Federation, CIF, and public sector representation from the office of Government procurement, OGP, the Department of Jobs, Enterprise and Innovation, InterTrade Ireland and Enterprise Ireland. The focus of this group is to develop and monitor SME access to public procurement. This group meets regularly - I am pleased to have met the group recently - and it has broadly welcomed the policy initiatives in the circular. I expect this group to input into the public consultation process. While the circular and its provisions have been broadly welcomed, I am acutely aware, as is the OGP, that the main criticism from many stakeholders is the lack of consistency in the implementation of the circular. If I were to identify one challenge for 2015 it would be to ensure that the SME circular is consistently implemented across the board.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I thank the Minister of State. I appreciate the challenge and I note the consultative phase and also the Meet the Buyer event which will be held shortly. I hope to attend that event.

The Minister of State referred in his response to the practice of breaking contracts into lots and making them accessible. He referred to encouraging SMEs and micro-businesses to form consortia to give them the capacity to bid. While on paper this may appear to be a very straightforward proposition, in practice it is failing very many smaller businesses. The Minister of State may be aware that in the stationery sector those companies that bid for stationery business with the State have had an appalling experience in this bidding process and the requirement to create consortia. I am not sure that this particular issue has been terribly well thought out nor am I convinced that the system has had a listening ear to the real experience of businesses. Training has been provided, not least through InterTrade Ireland, which is welcome but we need to get that piece of it right. I encourage the Minister of State to have a particular eye for that issue in the course of his consultation.

Simon Harris (Wicklow, Fine Gael)
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I am pleased to hear that Deputy McDonald hopes to attend the Meet the Buyer event. I have made a point of inviting every Member of the Oireachtas to the event and if the Deputy is not in a position to attend there will be more events. It is very important to allow an opportunity for SMEs to interact first-hand with the public service buyers and for us as policy-makers to see that interaction, to see what is working and what is not working.

I accept Deputy McDonald's constructive criticism about consortia; it is a criticism I have heard from the representative bodies.

I refer again to the consultation process which will provide an opportunity to look at what is working and what is not working, to look at what we want to achieve from these directives. All too often EU directives can be regarded as negative or challenging measures but in my view we must seize them as an opportunity. The Deputy correctly said that we are looking at upskilling SMEs by providing training sessions so that they are ready to engage in procurement. It is in the interests of the entire Irish economy that we get more SMEs availing of and winning public procurement contracts.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I hope the consultation period will be successful. A number of issues were raised within the stationery sector, including concerns to do with quality levels and the health and safety standards required in respect of stationery provided to schools, including primary schools. The sector has brought these issues to the attention of some of the Minister of State's colleagues. I ask that when those observations come back about the real experience of those involved in any sector that they will not be brushed off or dismissed. It is my view that the health and safety and quality issues as well as some of the predatory practices, perhaps, by others outside of the State who tender for this business and who are bigger operators, are very real concerns. I ask the Minister of State to consider those very carefully because it is a case of getting it right and as he says, ensuring that as many indigenous Irish SMEs and micro-businesses can legitimately and fairly win as many contracts as possible.

Simon Harris (Wicklow, Fine Gael)
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I agree with much of what the Deputy says and she is correct. Aside from capital projects the State spends about €23 million a day on purchasing goods and services. It is a very significant contribution to the domestic economy and to the flow of money around the domestic economy. There is also an issue with SMEs needing to know that the public procurement process is open to them. We want them to become involved. It is a little like exporting in the days of the Celtic tiger when exporting was viewed as something only done by larger companies. There has been a cultural shift and a change in the mindset and many smaller businesses are exporting successfully. We need to get to that point with regard to procurement where the procurement process is open to everyone in every town and village and where we provide all the supports.

I agree we need to achieve value for money and we have very ambitious savings targets. However, we have previously debated the point that value for money is not always a case of the bottom line; it comprises a formula that is more complex than just considering the bottom line. That is the balance we need to achieve. I hope we get it right most of the time - I am not saying we get it right all the time - and hopefully this consultation process will tease out these issues.