Gerald Nash (Louth, Labour)
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Question 219: To ask the Minister for Public Expenditure and Reform the measures taken by him and the National Procurement Service to facilitate a larger number of indigenous companies in the State in accessing public contracts; if he is satisfied at the success rates of Republic of Ireland companies in terms of the securing of State contracts; the way he intends to improve the situation within the framework of EU public procurement directives; and if he will make a statement on the matter. [34662/11]

Brian Hayes (Dublin South West, Fine Gael)
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The National Procurement Service (NPS) in the Office of Public Works has responsibility for initiatives in procurement to achieve efficiencies and value for money for the Irish taxpayer.

Since its establishment in 2009, the NPS has made continuous efforts to ensure that Irish Small and Medium Enterprises (SMEs) are able to take full advantage of the public procurement opportunities that arise and are available to them. The NPS facilitate seminars for SMEs which cover all the issues relating to competing for public procurement contracts, including

· Public Procurement regulations

· accessing the market opportunities

· the tendering process, and general guidance on how companies should approach the preparation of tenders.

A number of seminars were delivered to ISME and to Chambers of Commerce in 2010 and 2011, and workshops were also delivered in 2011 on public procurement opportunities in association with Enterprise Ireland and Intertrade Ireland. The NPS has also produced a leaflet "Top Tendering Tips for Public Sector Contracts" which is freely available.

One significant development in the area of facilitating the SME sector was the publication by the Department of 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 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 EU-commissioned research, carried out by independent consultants 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, and Strategic & Change Management programmes. Enterprise Ireland also offers assistance with exports, management development, lean manufacturing, research and development, and overseas offices programmes.

NPS policy seeks to encourage participation by SMEs in public sector competitions. SMEs that believe the scope of some competitions is beyond their technical or business capacity are encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. The NPS tender documentation for larger contracts allows and encourages SMEs to come together to bid for these contracts.

Larger enterprises are also encouraged to consider the practical ways that SMEs can be included in their proposals to maximise the social and economic benefits of the contracts that result from this tendering exercise.

The NPS is responsible for eProcurement and for the operation of the eTenders public procurement portal (www.etenders.gov.ie). On average 5000 tenders for the procurement of goods, services and works are advertised on eTenders every year.

Since 2009, the NPS has been responsible for producing annual statistical information in relation to above-EU threshold procurement activity by the Irish public sector and providing these statistics to the European Commission. Current thresholds (valid from January 2010 to December 2011) above which tenders must be advertised in the Official Journal of the European Union (OJEU) are as follows:

Information on contract placement is available currently for the years 2005-2009 relates to above-EU threshold contracts only and is contained in the tabular statement below. Data in respect of 2010 will not be available until later this year. The Deputy should be aware that the figures contained in the table relates to the number of contracts placed which were above the EU Threshold for the year in question and must not be interpreted as indicative statistics for the overall procurement spend. It must also be borne in mind that these statistics relate only to above threshold procurements, where contract award notices were published, and where the nationality of the winning tenderer was disclosed.

For example, when considering the year 2009, €2.8 billion worth of expenditure was advertised in the Official Journal, out of the €15 billion public procurement spend in that year. The NPS estimates that less than 5% of the overall spend went to non-domestic suppliers, as a significant proportion of the overall procurement spend is below the EU threshold and is also below the threshold for advertising on eTenders (the eTenders threshold was €50,000 in 2009).

It should be noted also that all the statistics relating to non-domestic suppliers relate to suppliers with an address in countries other than Ireland and do not distinguish between European and non-European supplier.

ABOVE THRESHOLD CONTRACTS AWARDED TO IRISH AND NON-DOMESTIC SUPPLIERS 2009-2005