Catherine Murphy (Kildare North, Independent)
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131. To ask the Minister for Public Expenditure and Reform the way in which the Public Procurement (Frameworks Agreements) circular 06/12 will be used by his Department; if he has considered the way in which any investment made under the procurement process might deliver work for companies based here; and if he will make a statement on the matter. [24769/13]

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.

Reform of public procurement is one of the major projects of key strategic importance in the Government’s Public Service Reform Plan, which was published in November 2011. Procurement of supplies and services accounts for around €9 billion of current spending by the State per annum. This represents a very significant portion of overall spending and it is, therefore, essential that the Public Service achieves maximum value for money and operational efficiency in its approach to public procurement.

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 Department of Public Expenditure and Reform issued Circular 06/12 which implements the Government decision by making it a mandatory requirement for public service bodies to 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.

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.

I would add that National Procurement Service tender documentation has been developed to encourage the participation of SMEs. For example, the contract for office supplies was divided into three individual lots for Stationery, ICT Consumables and Paper. SMEs that believed the scope of the competitions were beyond their technical or business capacities were encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. Through such relationships they could participate and contribute to the successful implementation of any contracts that resulted from these competitions and therefore increase their social and economic benefits.

Larger enterprises were also encouraged to consider the practical ways that SMEs could be included in their proposals to maximise the social and economic benefits of the contracts that result from these tenders. For example, the indigenous company, which won the Stationery contract, with an estimated value of €10m per annum, is sourcing up to 60% of their products using 136 local agents and manufacturers.

Furthermore, 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 4,500 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.

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