Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

31. To ask the Minister for Public Expenditure and Reform his plans to reform how the Office of Government Procurement operates to ensure maximum participation by small and medium enterprises in public contracts; to set specific targets for the proportion of Government procurement to reach these enterprises; to support greater co-operation between groups of these enterprises in bidding for contracts; if all public contracts are advertised in an accessible way; and if he will make a statement on the matter. [13252/16]

Eoghan Murphy (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Public procurement is governed by EU and national rules, the aim of which is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money. It would be a breach of EU rules for a public body to favour or discriminate against particular candidates on grounds such as nationality and organisational size and there are legal remedies which may be used against any public body which is infringing these rules. However, there is at EU level a recognition of the need to promote and facilitate SME participation in public procurement. The new EU directives on procurement, recently transposed by the Office of Government Procurement are intended to make it easier for businesses and SMEs to tender for public sector procurement contracts. Measures specifically designed to improve access for SMEs and start-ups include: the financial capacity criterion is now less demanding - it is generally limited to twice contract value; electronic methods of communication are now mandated in parts of the award process; use of a self-declaration of compliance with selection and exclusion criteria by suppliers to reduce red tape, as in a European single procurement document; the discretion to divide public contracts into lots, with the proviso that opting not to divide a contract into lots must be explained in the procurement documents; and provision for consortia bidding to encourage SME involvement. A number of these measures had been accelerated into policy in 2014 in advance of the transposition of the new directives by Circular 10/14 issued by the Office of Government Procurement. This was broadly welcomed by SME representative bodies at the time.

The Office of Government Procurement works with the industry bodies, including ISME, IBEC, the SFA, Chambers Ireland and the CIF, as well as the Department of Jobs, Enterprise and Innovation, InterTrade Ireland and Enterprise Ireland to promote the engagement of SMEs in public procurement. Evidence of the work and co-operation in the area can be seen in some of the following events organised by InterTrade Ireland and supported by the Office of Government Procurement in 2015. For example, in 2015 there were 19 go-to-tender workshops attended by 276 businesses. There were two meet-the-buyer events, one in Belfast and one in Dublin, attended by over 1,300 businesses and buyers from across the public sector, North and South, which focused on the opportunities for SMEs with major public sector buyers across the island.

Similar events are planned for 2016. For example, a "meet the buyer" event has been announced for 8 June in Belfast and another is scheduled for October in Dublin.

Additional information not given on the floor of the House

The reform of public procurement across the public service is ongoing and will continue to provide opportunities to the SME sector to win business. The OGP will continue to work with industry to ensure that winning Government business is done in a fair, transparent and accessible way and to ensure that Government procurement policies are business friendly.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I wish the Minister and Minister of State every success in their new roles. Government procurement costs €8.5 billion per annum, or €23 million per day, and should be used as an employment creation mechanism as well as getting value for money for the taxpayer. Increasingly, it has become the preserve of bigger companies and consortiums which are coming together to tender for contracts thereby excluding local SMEs, particularly in the education sector where locally based SMEs are expected to fund schools and institutions.

One of the requirements of Circular 10/14 was that buyers should publish an award notice which indicates the value of the contract awarded and the tender. In 2014, only 24% of buyers published an award notice. What percentage of buyers published award notices for 2015 and 2016 to date?

Eoghan Murphy (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

One of my first actions when I took responsibility for this area was to meet with the people in charge of the OGP, given that it is such an important area, as the Deputy pointed out. Given the amount the State spends on procurement, the OGP is incredibly powerful. We can use this economic soft power for many good things, including getting value for money, as we are trying to do. This does not necessarily mean achieving the lowest price but getting savings for the State while improving services. We can do this in tandem with a social good, as we have done in a number of areas regarding certain types of provisions in the bids to help areas that need regeneration or employment. We can also help SMEs to get access. Circular 10/14 introduced a number of areas that would help SMEs to tender for business and win public contracts, including advertising tenders on the eTenders website. We have a new directive coming in regarding e-invoicing. We encourage SMEs to get into consortium bidding. I can get the percentage the Deputy requested, although it is not yet available for 2015.

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Could the Minister of State outline the sanctions for Government agencies that ignore Circular 10/14? In 2014, the Small Firms Association, SFA, made a submission to the Committee of Public Accounts that stated 82% of its members surveyed believed the emphasis in procurement was on price rather than on value for money. There is still a very strong perception among the SME community that price is king and that the value for money and social issues, which the Minister of State mentioned, are irrelevant.

TenderScout has done a survey and an analysis of Irish public procurement, which I recommend the Minister of State peruse. It suggests only 11,000 firms in Ireland are involved in public procurement, which is only 6% of the company base in the country. This indicates how many people are not interested in it, or do not feel they are competitive enough to get involved in it, and, thus, the opportunities that exist and the challenge that faces the Government in terms of using procurement as a much better tool of business.

Eoghan Murphy (Dublin Bay South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Only 7% the public procurement contracts awarded goes overseas while 93% goes to Irish-based suppliers. The Deputy referred to an overemphasis on price. We use the most economically advantageous tender model. I will detail the emphasis given to price and non-price factors in some examples of competitions in 2015. In the 22 professional service contracts awarded in 2015, the ratio of price to non-price factors was 30:70. In the nine awards in 2015 for clothing competitions, the ratio was 50:50. In ICT research and advisory services in the national framework, the ratio was 40:60. In the enterprise application support services framework, the ratio was 30:70. It is not just a question of overemphasis on price. We examine other factors.

The lotting allocated under Circular 10/14 has allowed for lots to be awarded by region, for example. Lots can be broken down - for example, cleaning can be divided into clinical and non-clinical cleaning. There are areas in which we are constantly trying to reform and improve how the Government procures to ensure SMEs can have as good a chance as anybody else in getting tenders.

In terms of our engagement with the Small Firms Association and other interested bodies, I chair two groups that are focused on trying to help small and medium enterprises in the area of Government procurement.