Written answers

Tuesday, 11 November 2014

Department of Public Expenditure and Reform

Public Service Contracts

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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234. To ask the Minister for Public Expenditure and Reform if his Department keeps any record of the proportion and value of public contracts won by Irish-based enterprises for services to the public sector; if there has been any change in the past two years in this proportion and value; the steps being taken to ensure with new procurement procedures and more centralised procurement that the small and medium enterprises sector may compete on a fair basis; and if he will make a statement on the matter. [43308/14]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Under EU Directives contracting authorities are obliged to publish Contract Award Notices for contracts above certain thresholds in the Official Journal of the European Union (OJEU) via the national public procurement website .

The current thresholds (exclusive of VAT) are as follows works contracts - €5,186,000; supplies and services contracts of Government Departments - €134,000; supplies and services contracts of other public bodies - €207,000; supplies and services contracts of entities in the utilities sector - €417,000.

In 2012,  the latest year for which information is available, 91.78% of published contracts (above the EU thresholds) awarded by the State (valued at approximately €3.7bn) went to Irish companies.  In comparison to 2011, the proportion of contracts awarded to Irish business  increased by 8.54% and 1.07% in respect of supplies and works contracts respectively, and decreased by 2.11%  in respect of service contracts.  The full details of contracts awarded for these years are set out below:

2011 Above OJEU Threshold Awards

Contract TypeTotal Value

€(000)
% Proportion of Value to Irish BusinessesValue to Irish Businesses

€(000)
Value to non-Irish Businesses

€(000)
Services 945,71295.74905,41640,296
Supplies438,80987.21382,69556,114
Works298,36898.00292,3955,973
Utilities 593,57776.80455,849137,728
Total2,276,46689.452,036,355240,111


2012 Above OJEU Threshold Awards
Contract TypeTotal Value

€(000)
% Proportion of Value to Irish BusinessesValue to Irish Businesses

€(000)
Value to non-Irish Businesses €(000)% Change in Value to Irish Businesses Year on Year
Services745,05493.63697,58447,470-2.11
Supplies 752,81495.75720,81831,996+8.54
Works755,16299.07748,1627,000+1.07
Utilities 1,784,08986.241,538,573245,516+9.44
Total4,037,11991.783,705,137331,982+2.33
These statistics are limited to above threshold OJEU awards for which the award details have been provided - on average the OGP gets approximately an 80% response rate - and the supplier details are dependent on correct information being provided on the suppliers to whom contracts have been awarded. 

From 1 August of this year, buyers are required under DPER Circular 10/14 to publish all Contract Award Notices over €25,000 on the e-Tenders website on completion of the award with effect from 1 August 2014.  It is intended that this additional information will allow improved reporting by the Office of Public Procurement (OGP) in relation to public contracts awards.

In relation to steps being taken to ensure that SME's can compete on a fair basis, public procurement is governed by EU and National rules. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.  It would be a breach of the EU rules for a public body to favour or discriminate against particular candidates on grounds such as nationality, organisational size, etc. and there are legal remedies which may be used against any public body infringing these rules.

The Government acknowledges the significant role that SMEs play in the Irish economy and is committed to ensuring that SMEs are fully engaged with public sector procurement and the opportunities presenting.  DPER Circular 10/14 is aimed at opening up opportunities for small businesses that want to tender for public contracts and also to ensure that engaging with government procurement is easy and low cost.  The key initiatives are as follows: buyers are advised to undertake market analysis prior to tendering in order to better understand the range of goods and services on offer, the competitive landscape, including the specific capabilities of SMEs; the circular promotes transparency in procurement by requiring supplies and general services contracts with an estimated value of €25,000 to be advertised on the Government's electronic tendering portal, e-Tenders; the circular encourages suppliers including SMEs to fully use e-Tenders and avail of its facilities in relation to registration, e-tendering and automatic alerts in relation to future tendering opportunities; buyers are encouraged not to set turnover thresholds at more than twice the estimated contract value and puts limits on insurance levels for suppliers where possible; the circular promotes greater use of "open" tendering and less use of "restrictive" tendering; the circular  encourages SMEs to consider using consortia where they are not of sufficient scale to tender in their own right or where they may lack certain capabilities necessary to provide a compelling proposition; the circular encourages Contracting Authorities to break large contracts down into lots where reasonable to do so and where it does not expose the State to undue risk or significant management overheads.

The OGP also supports the work of Enterprise Ireland and InterTrade Ireland in building awareness of public procurement and supporting training for small suppliers in bidding for public contracts.  Last year the OGP, for example, supported two "Meet the Buyer" events in Belfast and Dublin last year attended by approximately 1,000 suppliers.  Approximately 1,700 are expected to attend similar events this year.  In addition, the OGP supported the 'Go 2 Tender' programme run by InterTrade Ireland which was attended by 317 SME's last year.This year InterTrade Ireland are also  delivering a programme on Consortia Building to assist SME's in developing understanding to enable them to jointly bid for state contracts.

The OGP 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.

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