Clare Daly (Dublin North, Socialist Party)
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93. To ask the Minister for Public Expenditure and Reform further to Parliamentary Question No. 103 of 7 May 2014, when he provides statistics in relation to the known awarded contracts, would he accept that the Government does not publish award notices for 80% of contracts, although it is obliged to do so; and the reason in view of the fact that the EU has acknowledged that the Government's policy to make large contracts and award them on price is a barrier to small and medium enterprise participation and therefore discriminating against Irish SMEs. [21884/14]

Brendan Howlin (Wexford, Labour)
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Under EU Directives on public procurement public works, supplies and service contracts above certain thresholds must be advertised on the Official Journal of the EU and awarded on the basis of objective and non-restrictive criteria. For works contracts the threshold is €5.186 million; for supplies and service contracts awarded by Government Departments the threshold is €134,000 and for the remainder of public bodies the threshold is €207,000. The threshold for supplies and service contracts of entities operating in utility sectors (water, energy, transport and postal) is €414,000.

I understand that approximately two thirds of tenders which are above these EU thresholds have contract award notices published for them. The reason for this level of publication is that of the remaining tenders some may never be awarded or the tender competition may be cancelled. In such cases there is no need to publish a contract award notice. It is the responsibility of individual contracting authorities to publish award notices following the signing of a contract. This process is facilitated through the national eProcurement portal . The Office of Government Procurement (OGP) is responsible for producing annual statistical information in relation to above-EU threshold procurement activity by the Irish public sector and for providing these statistics to the European Commission.

In relation to contracts valued below the EU thresholds, the general requirement is that they be advertised on the national public procurement website or, depending on value, awarded on the basis of a competitive process of direct invitation to an adequate number of suitable suppliers. Contracting authorities are not obliged to publish the results of tender competitions, under these EU thresholds. However, guidelines recently issued by my Department (Circular 10/14) will require public bodies to publish all contract award notices over €25,000. This will come into effect later this year.

The Government is committed to maximising procurement opportunities which actively assist job growth and benefit the wider economy.  The public sector has an immense purchasing power, spending in the region of €8.5 billion per annum on goods and services. This level of expenditure by the public sector affords significant business opportunities for firms that can supply the products and services that are required by public bodies.

The Government is aware of the concerns raised by SMEs in relation to the reforms of the procurement function. Broadly speaking the two main objectives of the reforms are to professionalise how procurement is conducted in the State and to ensure services are delivered in a sustainable manner. In relation to the latter, it is vital that any savings arising from procurement are achieved without damaging competition. Therefore the Government are committed to ensuring that SMEs are fully engaged with public sector procurement and the opportunities presenting.

My Department has also recently published guidance Circular 10/14 aimed at promoting SME participation in public procurement. These new guidelines are aimed at reducing the administrative burden on businesses that want to tender for public contracts. The guidelines promote the setting of relevant and proportionate financial capacity, turnover and insurance levels for tendering firms and the sub-dividing larger contracts into lots, where appropriate, to enable SMEs to bid for these opportunities. The guidelines also encourage SMEs to form consortia where they are not of sufficient scale to tender in their own right and to register on to ensure maximum exposure to tendering opportunities. 

In addition, the guidelines accelerate some of the key business-friendly initiatives included under the new EU Public Procurement Directive, currently being transposed by my Department.  The SME Working Group, established under the Government's Action Plan for Jobs, was consulted on the new Guidelines.  The SME Working Group is chaired by the Office of Government Procurement and includes representatives from ISME, IBEC, Inter Trade Ireland, Enterprise Ireland, the Competition Authority, the Small Firms Association, Chambers Ireland and the Department of Jobs, Enterprise and Ireland. The new Circular has been broadly welcomed by industry representative associations.

The reform of public procurement across the public service is on-going and will continue to provide opportunities to the SME sector to win business.  The Office of Government Procurement will continue to work with industry to ensure that winning government business is done in a fair, transparent and accessible way and to ensure that government procurement policies are business friendly.