Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank Senators for their contributions and congratulations. I very much appreciate it. The Office of Government Procurement is a big part of my brief and an important arm of the State, as it was described by one Senator. There is much we can do with it so I wanted to make sure that we could have a proper debate here to hear everyone's opinions and thoughts and to work together in that regard. I chair the advisory group with the stakeholders from SMEs which previously people from the Oireachtas have not participated in. Previously, it included the Minister and the stakeholders from different advisory groups. We met yesterday and agreed at the next meeting to bring in spokespeople on reform from other parties to open up another element of Government work to all sides of the Oireachtas and work together on this. We heard the same complaints and we have the same issues coming across our desks. We more or less have the same concerns about what is happening in procurement, for small and medium enterprises, in our communities where we see Government work being done and wonder why sometimes it feels like people in the community are being excluded from some of that work.

I took detailed notes and will try to touch on everything that was raised by each speaker but I will not duplicate a point if it was made by more than one speaker. Senator Horkan talked about not wanting to put SMEs at a disadvantage. He is absolutely right. The evidence we have to date in terms of the awards that have been given is that we are not putting them at a disadvantage in terms of what has been won. Only 7% is going outside the country. We have also seen that Irish SMEs and businesses are more successful abroad than other companies are here which is another important factor. That does not mean we cannot improve the access to this new centralised procurement process, which is essentially a new Government service by the OGP. We are looking at that all the time and it was something I raised with stakeholders yesterday in our meeting. Are we doing enough? Are the buyer events good? Yes, they are good but there is still a lack of clarity on certain processes. There is still a misunderstanding of the difficulty of applying for certain tenders and frameworks. We had a recent meeting with a group of SMEs in a particular area on procurement processes which a number of Deputies and Senators had organised. I extend an invitation to everyone here. If Senators have a group of businesses in a particular industry that feel they have been excluded from something for some reason I am more than happy to meet with them. We have a tender advisory service that was put in place and under the programme for Government we will review it. The purpose of some of the new changes we have brought in on foot of directives is to engage with industry before a framework is put in place and a tender is put out to make sure we cover all the nuances there might be in that industry or part of the country. We will look at the framework we have put in place or the service being tendered and whatever little measures might be put in to make sure we are not doing something that might damage an industry or exclude people when it was not our intention to do so.

In so far as the ombudsman and that role is concerned we discussed this just the other day. There is a programme for Government commitment to consult on the merits of such an office and we will begin that consultation soon. It will be an agenda item on the next quarterly meeting to see exactly how we will do that consultation. The new tender advisory service is still bedding down. People are not fully aware of how they can engage at that side of the process. We now look to see what the merits are of an ombudsman on the other side of the process after an award has been granted. We heard in the meeting yesterday that in another country their ombudsman's office has 200 lawyers working in it. We have to be careful about creating a beast that had the right intentions but became something else entirely. We will consult on the merits of it and what it might look like. We will discuss how best to do that consultation at the next quarterly meeting. On payment timelines, a new law has just been brought in on a 30 day cap in one particular industry and we will look at how that might be extended beyond that industry.

Everyone touched on social clauses, which is are a positive thing. The pilot schemes were successful. We will move forward with this model and see where we can introduce social clauses, where they can work, and where they can work to maximum effect. At the same time we have to be mindful of displacing existing jobs in a small business or excluding very small businesses through a social clause where it might not be fair to do so. We have to bear in mind their own view. I want to roll these out more and see them in every aspect of procurement if we can do that. We will work quite vigorously towards that. The quarterly meetings are happening and I will be inviting in spokespeople from other parties outside of Government. It is an important part of reforming what we are doing.

As for Senators getting the speech earlier, if I can I will certainly do that. I could have provided it yesterday evening but it is my first time appearing in the Seanad so I was not quite sure of the mechanisms to employ but I can do it next time.

Senator Burke made a number of interesting points and focused on the huge amount of money we have been spending. He made the point, which I think is an important one, that there was waste going on and that there were practices and inefficiencies in previous years that one could not stand over in terms of spending public money. The new OGP structure throws a huge amount of transparency on the procurement process. That is good for Irish businesses because the market has to be open and fair and has to be seen to be open and fair. Centralising the process allows us to do that and to make sure that small and medium enterprises, or any enterprises tendering for Government goods or services, can trust that the process is fair. We cannot be too rigid - flexibility is important. It is also important that we can adapt our processes where we identify problems, where and individual flags something or something is flagged to me or when we go back and do a retrospective analysis of a particular tendering or framework agreement. If we identify problems our immediate instinct should not be to defend the system, it should be to see where we can actually adapt it and improve it so we do not make the same mistakes again. That is important in every aspect of Government not just in procurement.

We have brought down the minimum turnover. I am not sure there is full awareness as to how it has been brought down. There is a question as to whether we can bring it down further in certain areas. We have to look at that because in certain industries, certain services that are procured might be operating at a very low tender level and a very low turnover level in terms of the business itself. This was brought to my attention recently by a group of local businesses. It is something I am looking at and I will have some more information on it soon. Problems with the documentation is one of these red tape or regulation aspects where a business wants to apply for a tender but the process is seen as too lengthy or complicated. That is a problem. If there is a particular process where that was encountered I would like to hear about it. The purpose of the meet-the-buyer events and everything we do is to communicate, go out, be proactive and try to help people understand that this is a new process so it might look different but we do not want it to be any more complicated or difficult than it was before. If there are issues around safety inspections being too onerous on vehicles that is an aspect for the Minister for Transport, Tourism and Sport. It might be best to bring it to his attention. We do not want to get in the way of businesses doing good business but at the same time we have to respect safety records and ensure that when we are procuring vehicles or anything like that they are up to a certain minimum standard. That would be taken care of in the procurement process.

I reiterate to Senator Burke and others that I am happy to meet with small businesses or a number of businesses in a particular industry. I will go out and do that. I did that when Senator Nash was Minister of State. When I went to Drogheda I was on my way to Belfast to a meet-the-buyers event.Unfortunately, Dáil business meant I could not attend that meeting, but I am more than happy to meet businesses in their localities or workplaces in order to better understand the problems they may face when it comes to procurement.

Senator Gavan referred to Chambers Ireland. It sits on the advisory group and feeds in its views, therefore we get direct access to the views of stakeholders which is very helpful. We do not prioritise the cheapest price, which is an important point, rather we look for value which can be calculated in different ways. In terms of value for money, I do not mean just the bottom line. I am considering it in different ways. We have a price-quality ratio. If Senators would like to submit a question to my office, I have lot of information on the factors pertaining to how procurement works. In terms of what we consider when we award contracts, 25% of the time price is a consideration.

We need to send that message out because if there is a perception that we are just looking for the cheapest price, that is not good for people's faith in the procurement process. We are not just looking for the cheapest price. At the same time, if Senators are aware of business or a tender being awarded on the basis of what they felt was the cheapest price while quality or other factors were not taken into account, I would like to hear about that because it can help to inform future tenders and frameworks that are put in place.

There was a question mark over a figure. Only 7% of what the Government purchases goes to companies abroad. I want to reiterate that Irish companies are doing far better when they access other markets in terms of winning government purchasing in other countries. That is key to everything we are doing and we are getting better at it all the time. Of course, there is somewhat of a lag effect.

The Office of Government Procurement been established. It took time for it to get up and running, recruit staff and get to work. It could then start to examine data. In the reports I see on the frameworks that were put in place and the data on the savings achievements made in a given year, I can say that we are still playing catch-up but are getting more information all of the time which helps what we are doing.

Definitions are important, in terms of what we are defining. If we know what we are defining or are able to better improve our data collection, we can have more granular data. In that case, we will not just be talking about SMEs, rather we can talk about micro-enterprises and every level of Irish business that is entering into the process.

Lotting helps us to reduce the size of tenders, and we can lot by geography and other criteria. The issue arose recently in terms of the size of lots. If we lot by geographical location, we need to make sure the areas involved are not too big. If we lot by an amount or a particular type of service, we need to consider whether we could have broken things down further to make sure we are getting the best value not just in terms of money, but in terms of the expertise in the industry or whatever might be provided in the value chain.

Judging the impact on local economies is something the new budgetary oversight and scrutiny process flagged with the Department. If we are going to introduce gender-proofed and equality-proofed budgets, we need to determine whether we can consider proofing them in terms of local, regional or county impact, something that was part of the discussions on the formation of a Government. It is something the budgetary oversight committee is examining, and I understand it hopes to do that when the new budgetary oversight office is put in place. It is something to explore, if that is possible.

I referred to social clauses. New directives have all been transposed and ICTU was consulted. If a Senator is aware of a concern ICTU has or that it felt it was not listened to or consulted properly, I would love to hear more about it.

Procurement policy should not just be a purchasing mechanism, rather we should use it as a lever for positive change. I fully agree with Senator Higgins on that point. It is a great statement and she said it more eloquently than I did - I could not write it down quickly enough. It is something I want us to achieve.

What is the purpose of the State? That is a bigger question than procurement, but it is an aspect of State behaviour. It is a tool and arm of the State. We make sure that it when it uses and leverages that arm, it is working in the best interests of Irish society and is not just acting in a very narrow way, in terms of the fiscal narrative. The State needs to be mindful of and not waste taxpayers' money. There are different ways of calculating waste. I agree with that proposition, and we can examine it.

Unfortunately, libraries are not my responsibility. People have raised the issue and I want to be clear that I was not wasting the time of anybody in the House if that is all they want to talk about. That has not been the case. I am grateful for the contributions in every area. I wish I was responsible for the area and could speak about it. It is a kink in the bureaucracy that I am not able to do so, but I should be able to. It is something we are considering.

There is always flexibility in EU rules and we need to make sure that we are being flexible and creative where possible to ensure that we are taking full advantage of new directives and ensuring they work for what we want to achieve as a State.

I talked about value for money not just being about price and, therefore, I will not repeat that point. Senator Higgins raised it, but it is not just about the bottom line for me or the Office of Government Procurement. I spoke about price-quality ratios, social classes and bringing the wider economic, social and environmental focus into our procurement policies. Senator Reilly referred to the real value. When I talk about value for money, I mean the real value and not just the financial amounts involved or the argument that the cheapest is the best.

In terms of coming back with a risk analysis, I am at the disposal of the House to return to discuss issues regarding TTIP and other framework agreements, and making sure that we do not narrow our policy choices and responses. I made similar points regarding corporation tax and whether we would be giving up competencies in that area at a future date.

The more we outsource competencies, the more we outsource responsibilities. We can then point to dummies or phantoms outside ourselves because it suits us to run away from decisions and responsibility. I am not in favour of developing any more responsibility higher up and passing things up the chain. We should try to keep our responsibilities within the Parliament and, where we can, devolve more responsibilities to local authorities.

Senator Nash spoke about State procurement in the public interest, a point on which I touched. I agree with him. He made his point on data quite well, and I have clarified the situation. He referred to simplifying and demystifying the process. I have not yet attended a "Meet the Buyers" event. I was on my way to one, but Dáil business got in the way. All the feedback I am getting from the advisory group I chair, which involves stakeholders, is that the events are very successful, hundreds of businesses attend them, they learn a lot and come away happier for having attended. That does not mean that we cannot improve our communications. It is something we need to keep on doing. I again repeat that we have made changes. There is a new system and we have to keep on communicating the changes until they are old and people are looking for new things.

When we examine things like lotting, decreasing the threshold for turnovers, etc., we find many businesses are not necessarily aware of such things. The engagement I have had with a group of small businesses from particular industries shows me that they were aware of some of the changes that had happened, but were not aware of their impact on their industry until it was almost too late. That is not a situation in which we want to find ourselves. We need to get out in front in that regard. A "Meet the Buyer" event is just one way of doing that. There are other go to tender events and other work we are doing.

Senator Nash referred to social clauses. I have been interested in them for quite a while. The pilot projects were successful. We are now in a good position to do more, and I want us to do that.

I have not seen the Sinn Féin Bill. If it is on Committee Stage or has had a chance to get back into committee, I would be very happy to discuss it. There are many possibilities now open to committees that were not available when I sought more powers for committees and opportunities to bring forward ideas or legislation from a party or individual in the previous Dáil. I would love to engage further on the Bill. We can arrange a more informal engagement ahead of a committee schedule to discuss where we can meet each other on the Bill and see what can be done.

Public-private partnerships are important. The State can leverage and invest a significant amount. We are increasing the money we are spending on capital expenditure where we have space to do so. The capital investment plan was announced last year, which involves a large commitment, over €24 billion. We will review that again next year and determine whether that figure can be increased.

That is not to say that there is not a role for private money. It is not just about private money; it is also about private expertise. We need to try to link that where it makes sense to do so. It is true to say that there are some worrying developments down the line regarding the application of public-private partnerships or the rules pertaining to them and how they might be counted by EUROSTAT. We are defending ourselves, how we see those rules and the danger of what any reinterpretation might mean for our ability as a State to invest prudently in capital areas where necessary. The Taoiseach has made that case to Europe. Where there are opportunities to work together on that, we will take them.

I think I have covered everything. If not, I can return to the House. I thank Senators for the opportunity to speak, and for their very positive engagement and the constructive ideas that have come from all Members who contributed.