John McGuinness (Carlow-Kilkenny, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform if circular 06/12 will be amended to allow for the purchase of goods and services at a local level provided that the cost of the service is equal to or better than the tender obtained and accepted by the National Procurement Service in order to give small and medium enterprises a real opportunity to sell goods and services to the State and in view of the fact that most SME's will be excluded from the tender process based on the turnover; if he will examine the tender documents for the supply of managed print services which requires a company turnover of €10m per annum and therefore excludes SME's, ref B1 but includes a clause 2.3 which would allow local purchases and thereby accommodate SME's; and if he will make a statement on the matter. [41747/12]

Brendan Howlin (Wexford, Labour)
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In light of the need to accelerate the reform agenda, late last year my Department published the Public Service Reform Plan. This plan identified procurement reform as a key instrument that can assist the public service to deliver services in an efficient manner.

The National Procurement Service (NPS) has put in place a number of national arrangements designed to secure better value for money from leveraging the public service’s buying power in relation to a range of goods and services that are commonly purchased across the public service. These national arrangements have benefits that include: cash savings; administrative savings from reduced duplication of tendering; greater purchasing expertise; improved consistency; and enhanced service levels. In some instances the take up of the NPS arrangements has been low. In order to increase the usage of the NPS arrangements and thereby secure best value for money, the Government decided that it should be mandatory for public service bodies to use specified national procurement arrangements.

Circular 06/12 implements the Government decision by making it a mandatory requirement that public service bodies avail of specified national arrangements put in place by the NPS. The list of categories subject to national procurement arrangements includes: electricity; natural gas; stationery and office supplies; paper; ICT consumables; managed print services; print media advertising; and, motor vehicles. These national arrangements will secure best value for money and facilitate contracting authorities to deliver services within their budgetary constraints.

In relation to the issue of whether public service bodies have scope to purchase goods and services locally at prices lower than those under national arrangements - the position is that a public service body making such a purchase will need to explain the rationale for not using the NPS arrangement and provide a value for money justification that takes account of the full costs incurred in managing its own procurement process.

While the key purpose of Circular 6/12 is to enable the State to do more with less by aggregating procurement to secure better value for money, it is worth noting that such aggregation arrangements can be implemented in a manner that achieves value for money with a minimal negative impact, or indeed a positive impact, on SMEs. While a number of the categories of goods and services mandated under the Circular are suited to single supplier national arrangements, it should not be taken that single supplier frameworks are to be accepted as the norm. The greater use where appropriate of multi-supplier frameworks can address local supplier issues while also ensuring ongoing cost competitiveness of the framework itself. Such multi-supplier frameworks may also offer SMEs the opportunity to participate in national level contracts, thereby offering valuable reference work when competing for public procurement contracts in other jurisdictions.

In relation to managed print services (MPS), the value of this national arrangement is estimated to be €100 million over two years. Given the potential value of contracts under the national arrangement and the fact that suppliers are required to provide all of the print and imaging devices upfront, from their own resources, the view was taken by the NPS that the €10 million minimum turnover requirement was proportionate. Furthermore, in order to facilitate SMEs, tenderers who did not have the required turnover in their own right were invited to partner with other entities to satisfy this requirement.