Andrew Doyle (Wicklow, Fine Gael)
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Question 194: To ask the Minister for Finance the action that is being taken to stem the flow of print contracts to companies domiciled in other countries which is 17.7% of the EU average of 1.49% of contracts awarded; and if he will make a statement on the matter. [37714/10]

Martin Mansergh (Tipperary South, Fianna Fail)
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The number of non-domestic suppliers winning public procurement contracts in Ireland has been the subject of recent controversy.

The EU Commission released a statistic, suggesting that 17% of the number of contracts awarded in 2008 went to suppliers outside the jurisdiction. However, this statistic is based on incomplete data relating only to above threshold procurements, where contract notices were published, and the nationality of the winning tenderer disclosed.

When one compares the value (as opposed to the number) of contracts going to non-Irish companies in 2008, the figure actually amounts to less than 5% of the overall public spend on procurement. It should also be noted that the figures quoted by the Commission do not distinguish between companies in the UK and those based in Northern Ireland, so of the contracts going "abroad", many of the contracts may have stayed on the island of Ireland. The EU Commission agrees that an alternative interpretation of their figures is that "about 95% of all procurement by value was from domestic suppliers".

As regards print contracts up to 2009, the Government Supplies Agency, a Business Unit of the Office of Public Works, organised centralised procurement of printing services on behalf of Government Departments, Offices and Agencies (including An Garda Síochána and the Defence Forces). This role has been subsumed by the National Procurement Service, whose remit now extends to other public service organisations.

The OPW has always applied the relevant Directives and Regulations in its procurement operations. Notwithstanding this, most of the work under print contracts for the GSA, and now for the NPS, is carried out in Ireland:

· In 2008, 89.4% of the total value of OPW print contracts (amounting to approximately €10m) went to suppliers in the Republic of Ireland (90.5% to suppliers on the island of Ireland);

· In 2009, 95.6% of the total value of OPW print contracts (amounting to approximately €6.8m) went to suppliers in the Republic of Ireland (96.7% to suppliers on the island of Ireland).

The National Procurement Service (NPS) has made efforts to ensure that print companies are able to take full advantage of the public procurement opportunities that arise and are available to them. The NPS facilitated a seminar for the Print & Packaging Forum in September 2009, which covered all the issues relating to competing for public procurement contracts, such as the Public Procurement regulations, accessing the market opportunities, the tendering process, and general guidance on how companies should approach the preparation of tenders. Further seminars have been delivered to ISME in 2010.

In addition, the NPS has put in place a Print Panel for small print requirements (below the new threshold for advertising of €25,000). All print companies who are interested in public sector work should apply to be placed on the print panel. This has been published recently, but we have not had as great a response as we would have hoped. Of the 700 or so companies that are involved in print, only around 55 are included in the panel, which is available currently to all public sector buyers on www.opw.ie , together with instructions on how it can be used for low-value tenders. Without doubt, the most significant development in the area of facilitating the SME sector has been the publication by the Minister for Finance in August 2010 of Circular 10/10. These guidelines to public contracting authorities aim to ensure that tendering processes are carried out in a manner that facilitates participation by SMEs, while ensuring that all procurement is carried out in a manner that is legal, transparent, and secures optimal value for money for the taxpayer. It addresses the concerns that SMEs have regarding access to public procurement opportunities, and highlights practices that are to be avoided, where they can unjustifiably hinder small businesses in competing for public contracts. The new arrangements include:

greater open advertising of opportunities (threshold now €25,000);

a reduced requirement for paperwork (such as accounts) at the early stages of tendering;

an instruction that suppliers are not to be charged for access to tender opportunities;

an assurance that all criteria used would be appropriate and proportionate;

and an instruction that turnover and insurance levels would be set at proportionate levels.

All of these actions are consistent with the recently published EU commissioned research carried out by GHK on Evaluation of SMEs' Access to Public Procurement Markets in the EU (September 2010), DG Enterprise and Industry, which notes that SMEs in Ireland secured greater access to public procurement than in other countries.

In addition to the work being done by the NPS and the Department of Finance, Enterprise Ireland is running strategic workshops to assist companies, such as Management Development workshops which have been run specifically for the print industry, and Strategic & Change Management programmes. Enterprise Ireland also offer assistance with exports, management development, lean manufacturing, research and development, and overseas offices programmes.

We cannot be seen to close ourselves off from the EU marketplace, by adopting a protectionist stance, as in 2009 alone 80 companies have won €210m in overseas public procurement opportunities with the support of Enterprise Ireland, which has set up a new public procurement section. I understand that, already this year, in the order of 63 contracts have been won, and Irish firms have secured €200m worth of contracts with the Olympic Development Authority in the UK.

Intertrade Ireland offers Go2tender workshops, which include mentoring, consortium and cluster development.

Many small companies with less than 10 employees can avail of the services of County Enterprise Boards, and should liaise with their local County Enterprise board to see what support is available to them.

The Department of Foreign Affairs has published links on its website to other countries' public procurement portals which are open to Irish companies as well as other useful links.

The Government is supporting the print industry and SMEs generally through the range of initiatives outlined above, but under EU procurement law and the principles of transparency, non-discrimination and equal treatment, it cannot set out deliberately to discriminate in their favour, when tendering for goods and services.