Denis Naughten (Roscommon-South Leitrim, Independent)
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To ask the Minister for Public Expenditure and Reform if he will amend procurement rules requiring locally based agencies to purchase products from local suppliers when they are able to offer similar or better value to the nationally appointed provider, for example, when a local school has discretion to purchase stationery from a local supplier who is able to offer similar or better value than the nationally appointed supplier; and if he will make a statement on the matter. [17702/13]

Brendan Howlin (Wexford, Labour)
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Under EU law, public contracts above a certain values must be advertised EU-wide and awarded to the most competitive tender in an open and objective process. The aim is to promote an open, competitive and non-discriminatory public procurement regime which delivers value for money. It would be a breach of the rules for a public body to favour or discriminate against particular candidates on grounds of location or nationality and there are legal remedies which may be used against any public body infringing these rules.

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. Last year my Department issued Circular 06/12 which 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. These national arrangements will secure best value for money and facilitate contracting authorities to deliver services within their budgetary constraints.

Where a mandatory framework arrangement exists, any public service body intending to make a purchase other than through the framework arrangement will need to ensure that it can explain the rationale for not using the NPS arrangement and provide a value for money justification that takes account of the full costs including those 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, these need not be accepted as the norm. The greater use, where appropriate, of multi-supplier frameworks can address local supplier issues while also ensuring on-going 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 order to encourage greater SME participation the NPS, over the past three years, has conducted a targeted programme of education for suppliers who wish to learn more about doing business with the Irish Public Service. This programme consists of seminars, workshops and large scale 'meet the buyer' events hosted nationwide. To date the NPS has facilitated workshops and presented at seminars to over 3,000 SMEs nationwide. Parallel with these events the NPS also works closely with business representative bodies such as ISME and IBEC to provide briefings for their members.

To summarise: we in government want better value for money for our substantial procurement spend and we want Irish SMEs, where necessary, to form alliances and networks to ensure they can tender on a competitive basis for this work.