Brendan Griffin (Kerry South, Fine Gael)
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225. To ask the Minister for Public Expenditure and Reform the savings that have been made by changes to the State's procurement policy; if such calculations recognise and factor in that small local rate payers and employers are being displaced by large tenderers; if the State has over-estimated potential savings from the reform of the system. [42622/15]

Brendan Howlin (Wexford, Labour)
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The reform of the public 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 facilitated amongst other things suppliers charging different public service bodies different prices for the same goods and services. This is not sustainable, as the State cannot afford to continue to purchase works, goods and services in a manner that undermines the level of services it can deliver.

The central procurement frameworks and contracts established by the Office of Government Procurement (OGP) have been designed to optimise benefits including savings to the State through the strategic aggregation of its buying power. Aggregation arrangements such as multi-supplier frameworks can, where appropriate, address local supplier issues.  

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 Guidance to Contracting Authorities (Circular 10/14) issued by OGP in April 2014 encourages public bodies to break large contracts down into lots where reasonable to do so. Lots may be based on goods or services descriptions, usage patterns, size and nature of customer demand and/or geographical location. Lots enable smaller businesses to compete for smaller elements of a larger contract. However it has to be done in a way however that does not expose the State to undue risk or significant management overheads.

The implementation of procurement reform is still at a very early stage.  Procurement savings of €100m over 2013 and 2014 have been reported by the OGP and its partner sector sourcing organisations. These forecast savings benefits represent only those cost reductions that can be estimated with a degree of confidence.  I am confident that the Government target of between €450 - 500 million in procurement savings can be achieved as implementation of the programme progresses.

Public procurement savings are necessary to enable public service organisations deliver much needed services within tighter budgets and to deliver value for money to the taxpayer.