Terence Flanagan (Dublin North East, Independent)
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23. To ask the Minister for Public Expenditure and Reform the changes that have been made to the rules regarding the tendering process for public contracts in order that small sole traders and small and medium enterprises are able to compete and offer tenders; and if he will make a statement on the matter. [26131/15]

Brendan Howlin (Wexford, Labour)
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The reform of the public procurement infrastructure is a key element of the reform programme for the public service.  Such reform enables public service organisations deliver much needed services within the tighter budgets that they must now operate. However, I would point out that reforms in this area are being carried out in a manner that recognises the importance of SMEs. 

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.  Circular 10/14 issued in 2014 by my Department 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.  This guidance set out positive measures that contracting authorities are to take to promote the involvement of smaller enterprises as well as highlighting practices that are to be avoided because they can hinder small businesses in competing for public contracts.

The main thrust of the circular is 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, etc;

- the circular promotes transparency in procurement by requiring supplies and general services contracts with an estimated value of €25,000 be advertised on the Government's electronic tendering portal, e-Tenders;

- it 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;

- promotes greater use of "open" tendering and less use of "restrictive" tendering;

- it  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; and,

- it 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.

Recent analysis carried out by the OGP indicates that 93% of government procurement expenditure is within the State and that 66% of this is directly with Irish SMEs. The OGP will continue to work with suppliers and business representatives 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.

Séamus Kirk (Louth, Fianna Fail)
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24. To ask the Minister for Public Expenditure and Reform his plans to overhaul the procurement legislation in order that it will give small and medium enterprises a better chance to compete with tenders; and if he will make a statement on the matter. [26115/15]

Brendan Howlin (Wexford, Labour)
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The reform of the procurement system across the public service is a key element of the reform programme for the public service.  The fragmented procurement arrangements across the public service have enabled suppliers to charge different public service bodies different prices for the same goods and services. Public Procurement savings are necessary to enable public service organisations deliver much needed services within the tighter budgets that they must now operate.

However, I would point out that reforms in this area are being carried out in a manner that recognises the importance of SMEs.  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. 

In relation to SME participation in public procurement, recent analysis carried out by the OGP indicates that 93% of government procurement expenditure falls within the State and that 66% of this is directly with Irish SMEs.  

The 2014 EU Directives on public procurement contain a number of provisions that are intended to make it easier for businesses and SMEs to tender for public sector procurement contracts.  These provisions include:

- except in justified cases, turnover requirements will be explicitly limited to two times the estimated contract value;

- acceptance of self-declarations for evaluating the capacity and capability until the award stage;

- the promotion of e-procurement with mandatory electronic availability of procurement documents;

- contracting authorities to comply or explain in relation to the division of contracts into lots;

- Member States to provide the Commission with detail on SME participation. (Such monitoring can support consistent application across all Member States and ensure that the objective of greater SME involvement is being delivered.).

These provisions will be reflected in the transposition which is underway. 

I would also point out that the Office of Government Procurement (OGP), which falls under the remit of my Department, has accelerated some of these key measures in Circular 10/14 which issued in April 2014 including the requirements to tender on-line in an open and transparent process, reductions in bidder's turnover requirements, proportional and reasonable insurance requirements, and breaking larger contracts down into lots.

The OGP 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.  For example, last year the Office of Government Procurement supported two "Meet the Buyer" events in Belfast and Dublin which were attended by over 1,100 suppliers. Earlier this month, the 2015 "Meet the Buyer" event in Belfast was attended by approximately 510 suppliers. The Office of Government Procurement also supported the 'Go 2 Tender' programme run by InterTrade Ireland which was attended by approximately 400 SME's.  This year InterTrade Ireland also delivered a programme on consortia building to assist SME's to jointly bid for state contracts. 

The OGP will continue to work with suppliers and business representatives on behalf of Government to ensure that winning government business is done in a fair, transparent and accessible way and to ensure that public procurement policies are business friendly.