Michael Creed (Cork North West, Fine Gael)
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Question 204: To ask the Minister for Finance if his attention has been drawn to the fact that the criteria laid down by him in respect of tendering for Government contracts for public works have a requirement that construction companies have a minimum of a €1.5 million turnover for each of the three preceding years, and that this criteria is discriminating against small construction companies who have a long track record of quality construction work for local authorities, the Department of Education and Science and so on; the reason he is discriminating against smaller companies; his views on amending the tender criteria in which the critical criteria for having a tender accepted would be the ability of the construction company to secure a bond for the satisfactory completion of the works if the contractor defaults on same; and if he will make a statement on the matter. [34622/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Public procurement is governed by either national or EU rules, which have as their underlining principles the need for non-discrimination, equality of treatment, transparency, mutual recognition, proportionality, freedom to provide service and freedom of establishment. Contracting authorities are obliged to observe these principles when awarding contracts. I have not laid down specific requirements in regard to thresholds, except that, as a general rule where they are applied, they should be proportionate to the size, nature and complexity of the project.

Individual contracting authorities have responsibility for the awarding of public works contracts. The setting of minimum standards in the suitability and contract award stage is left to individual contracting authorities on the basis that each is best placed to decide what is appropriate to meet its own requirements. These requirements and associated minimum standards will vary not only between individual cases but also over time.

The use of performance bonds instead of turnover qualifications would not affect the issue, as such bonds are a standard requirement in any event to safeguard the interests of the Exchequer. I am conscious of the pressures facing SMEs and the following actions are being initiated by my Department:

(a) a formal reminder is being issued to all contracting authorities that Government policy is to promote the participation of SMEs in public procurement;

(b) the renewed attention of public authorities is being brought to existing public procurement guidelines on the advertising of opportunities on the national etenders website, particularly in relation to contracts below €50,000 for goods and services;

(c) public authorities are being required to advertise all works contracts over a minimum level of €50,000 on the etenders website;

(d) contracting authorities are being reminded of the need to avoid setting disproportionately high capacity requirements and

(e) broad guidance is being drafted for dissemination to public authorities in order to assist them in determining the appropriate levels of financial capacity of tenderers relevant to particular contracts.