Paddy Burke (Fine Gael) | Oireachtas source

I welcome the Minister of State, Deputy Murphy, to the House. I congratulate him on this, his first occasion addressing Seanad Éireann, and on his elevation to Minister of State. I wish him well in his portfolio and I have no doubt at all that he will make a wonderful job of the Ministry.

The Government identified procurement as key in its public service reform programme, which it launched in 2013. The Office of Government Procurement, which is the central body responsible for public procurement across all sectors, was given the task of achieving savings of some €500 million over a three-year period. The office has rationalised the previous structures and framework procurement model and replaced it with a model consisting of common policies, procedures and systems. This is to be welcomed by everybody. As outlined by the previous speaker, €8.5 billion is the total spend in procurement, equating to an average of approximately €23 million per day, which is a huge amount of money. There have been inefficiencies and wastage for years in the area of procurement. It is a massive industry that includes every Government Department, every local authority, schools, the Defence Forces, prisons and so on. Procurement is a big issue.It was a great idea to set up the Office of Government Procurement, OGP, which not only allows all State bodies and agencies to make savings, it also enables all the small and medium enterprises to go online and see opportunities to tender for business. We know there are problems with the tendering process, but the OGP is to be welcomed.

Irish Water, a State body established as a national water utility, has made significant savings since it was established and will make further savings in the years ahead. It has made significant savings not only in respect of capital works but also with regard to the treatment of water and effluent. The taxpayer is benefiting from these savings on the part of Irish Water. Previously, each local authority had to negotiate a price for water and effluent treatment. To be fair to Irish Water, it has done a marvellous job in making the process efficient. That is in the interests of the taxpayer. I have no doubt that further efficiencies will be introduced by Irish Water.

Mr. Paul Quinn, the chief procurement officer of the OGP, said that the reforms will help to streamline public procurement processes and embed more simplified and flexible rules for the conduct of public procurement. He also said that public procurement must continue to be used as an instrument to drive better value for money outcomes for the taxpayer from the significant annual spend on goods and supply of services and works. This must be welcomed by the public in general.

I also welcome the Minister of State's comments to the effect that a light-touch regime is provided for and that this covers mainly social, health and educational services for contracts above €750,000. The rules and procedures are intended to maximise flexibility in the conduct of procurement in these areas. While adhering to the key procurement principles of transparency and equality of treatment, this flexibility is to be welcomed. The worst thing is to be too rigid. When one can make savings while adhering to the principles of transparency, quality and equality and yet be flexible, this is to be warmly welcomed.

There are areas where procurement policy can go overboard. I would hate small companies not to be in a position to tender because of the minimum turnover set in respect of being eligible to tender for contracts. I think that is a pity. There are some great small companies in the SME sector and they should be allowed to tender if they can compete.

We are overburdened by regulation. I suppose one can see that the British people have fallen out with the European Union because of over-regulation. I was informed by a small contractor who wished to supply a local authority with vans that the tender document ran to 70 pages. It is a major job to complete a tender document of that length, but the larger contractor has economies of scale and staff who are continually working on contracts and tender processes for various local authorities or Government agencies. It is ridiculous that a smaller contractor who is tendering for a particular contract - perhaps for the supply of spades, shovels or a van, for example - must complete a 70-page tender document every time he submits a quote for a low-price contract. The tendering process can be very cumbersome and time consuming for the contractor. I request that the Minister of State consider this aspect of procurement.

In respect of vans, trucks and other vehicles, the Road Safety Authority can go a little overboard. I know of a case where the driver of a van must start up the vehicle, turn on all the indicators and lights and then walk around and check they are working. He must comply with this condition of the contract every day. That is ridiculous, particularly as there are lights on the dashboards of most vehicles to alert drivers as to whether bulbs, etc., are not working. The driver to whom I refer is obliged to spend 20 to 30 minutes each day walking around his van - which is operating under tender on behalf of the local authority - in order to check if the wipers and lights are working. All such vehicles must be tested on an annual basis and in many cases there are internal lights to indicate if something is not working properly. Under the contract which applies in this instance, the driver must conduct a visual inspection and then fill in the log book.

I reiterate that the tendering process can be inefficient and cumbersome for the SME sector. I welcome the Minister's statement but we should try to find a way to help smaller enterprises compete.