Brian Stanley (Laois-Offaly, Sinn Fein)
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316. To ask the Minister for Public Expenditure and Reform the date from which the Office of Government Procurement will take over from local authorities in issuing tenders for the supply of products and services, in particular the tenders that fall below the limits required under European Union rules for advertisement. [19858/15]

Peadar Tóibín (Meath West, Sinn Fein)
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331. To ask the Minister for Public Expenditure and Reform if all local authority discretionary expenditure for goods and services is to be moved to a central framework created by the Office of Government Procurement; if so, the date by which this will occur; and if he will provide a breakdown, by county, of the value of the expenditure to be so moved and accordingly lost to local authorities and, in turn, to local business and economies. [20264/15]

Brendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 316 and 331 together.

The Office of Government Procurement (OGP) was established as key element of the Procurement Reform Programme to drive a more professional and joined up approach to procurement and to achieve better value for money for the taxpayer on goods and services purchased by Public Sector Bodies (PSBs). The OGP's mission is to deliver sustainable procurement savings for the tax payer by optimising value for money across the public service.

The model for public service procurement being implemented by the OGP and its sourcing partners in Health, Local Government, Education and Defence is based upon the "lead buyer" principle from professional procurement, whereby the main customer of a category of goods or services sources in the market on behalf of all customers. 16 major categories of expenditure have been identified that make up over 95% of Public Sector procurement spend (excluding Construction) in Ireland. Construction spend is currently out of scope for OGP operations, but the Office covers the policy aspects.  The categories are listed below.

1. Professional Services 

2. Facilities Management

3. Utilities

4. ICT & Office Equipment

5. Marketing, Print, Stationary

6. Travel & HR Services

7. Fleet & Plant

8. Managed Services

9. Plant Hire

10. Minor Builds & Civil's

11. Med. Professional Services

12. Med. Equip & Supplies

13. Med. Devices & Diagnostics

14. Laboratory Diagnostics & Library

15. Farming

16. Defence

The first eight categories in this list (1-8) are common, that is categories of goods or services required by all PSBs.  Most of the goods and services contracts that fall into these categories are increasingly procured by the OGP on behalf of all PSBs via national, regional or sectoral frameworks.  The next two categories, namely Plant Hire and Minor Works & Civil's (9 & 10), are primarily purchased by Local Authorities, so the sourcing of these are now led by the Local Government Operational Procurement Centre (LGOPC) hosted by Kerry County Council.

The next three medical categories on the list (11-13) are led by the HSE, Lab Diagnostics and Library and Farming (14 & 15) are led by the Education Procurement Service and Defence (16) will be led by the Department of Defence.

The transition to this new model has commenced.  The OGP is increasingly delivering contractual arrangements for common goods and services on behalf of Local Government which, in turn, is delivering contractual arrangements on minor works, civil's and plant hire on behalf of other public bodies, such as HSE, Education, etc.

The frameworks the OGP is putting in place typically breakdown customer requirements by lots against which suppliers can bid.  This is required by Circular 10/14 which sets out measures that will be taken by all public bodies to facilitate SMEs in bidding for Government contracts. Lots may be based on goods or services descriptions, usage patterns, size and nature of customer demand and/or geographical location.  The lotting arrangements will be determined by the sourcing strategy and consider customer requirements and market supply factors.  Many services require local delivery and the reformed model will meet those needs.

Transition to the new model is under way and customer requirements are still being gathered.  A timeframe for completion of the transition will be established when the full workload has been gathered and assessed, and the delivery model gains more experience in operation at scale.  There is no breakdown at a county by county of the work transitioning in the model, however data from 2012 for Local Government indicated an expenditure on all goods and services of €1,080 million.  Expenditure now in Irish Water is included in the figures.  The estimated expenditure on Local Government led categories for 2014 was €805 million under the reformed model, excluding expenditure now in Irish Water.

The reform of public procurement in Ireland is being carried out in a manner that recognises the clear importance of small and medium-sized enterprises in this country's economic recovery.  The recently published report by the Office of Government Procurement (OGP) "Public Service Spend and Tendering Analysis for 2013" indicates that 93% of public service procurement expenditure was with businesses in the Republic of Ireland and that 66% was with SMEs. This was based on an analysis of €2.742 billion expenditure across 64 large public service bodies involving over 35,000 suppliers.