Gerald Nash (Louth, Labour)
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35. To ask the Minister for Public Expenditure and Reform the level of procurement leakage; his plans to develop and implement a procurement sourcing strategy across Government that would reduce the high level of procurement leakage to the EU average; his further plans to increase the proportion of tenders divided into lots to support SMEs; and if he will make a statement on the matter. [16820/20]

Michael McGrath (Cork South Central, Fianna Fail)
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Strategic public procurement can play a key role in responding to societal, environmental and economic challenges. Consequently, the inclusion of strategic public policy considerations in procurement processes is a key feature of the Programme for Government. Therefore, my Department is focused on ensuring that public procurement affords opportunities for SMEs to benefit from the significant tender opportunities carried out each year across the public service.

Specifically, the Office of Government Procurement (OGP) has developed a suite of policy measures aimed at assisting SMEs to access public procurement opportunities (implemented through Circular 10/14). These include:

- Proportionate financial capacity criterion (turnover requirements limited to twice the contract value);

- Contracting authorities are encouraged to divide public contracts into lots;

- Provision for “consortia bidding” to assist SMEs participating in procurement procedures where they would not have the relevant capability or scale; and

- Public bodies are required to advertise contracts for goods and services valued above €25,000 on the national eTenders portal.

In addition, the SME Advisory Group which is comprised of representatives from ISME, IBEC, SFA, Chambers Ireland, and CIF, and meets on a quarterly basis to ensure that SMEs have a platform to assist in the development of procurement policy and practice. Communication is a key factor in encouraging SMEs to engage in public procurement processes. To this end, the OGP established a sub-group of the SME Advisory Group to deal with this area. This group further promotes awareness of potential opportunities and supports available for SMEs in tendering for public contracts.

Similarly, the OGP proactively engages with the Department of Business, Enterprise and Innovation and development agencies to promote SME access to public procurement. The OGP participates at promotional events held across the country which are designed to help SMEs.

The most recent Public Service Spend and Tendering Analysis Report for 2017 published last December involved an analysis of €4.912 billion expenditure across 71 public service bodies. The report indicates that 94% of the analysed expenditure is with firms within the State and 54% is with SMEs unchanged from 2016 and up from 52% in 2015. This report also analyses 2017 tendering activity in the public service as recorded on the eTenders public procurement platform. That analysis shows that 75% of tender notices are smaller value (below OJEU threshold) tenders. The median (typical) estimated contract values for tenders analysed in 2017 is €90,000 and is less than or equal to €100,000 in 14 of the 16 spend categories. This indicates that Government contracts in Ireland are accessible to SMEs given the low median size of estimated contract values.

This is an important issue for Government and the OGP will continue to proactively engage with business to enhance the significant measures already in place to support SME access to public procurement opportunities.

Richard Bruton (Dublin Bay North, Fine Gael)
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36. To ask the Minister for Public Expenditure and Reform the steps he has taken to conduct an audit of public procurement to identify the extent to which it can demonstrate the integration of environmental sustainability into each category of procurement; his plans to set requirements immediately in areas such as vehicle and equipment procurement, heating, lighting and power options and controls, building materials and waste management; and his further plans to introduce accurate monitoring across each State body. [16498/20]

Michael McGrath (Cork South Central, Fianna Fail)
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The inclusion of strategic, green and social policy considerations in procurement processes is a key feature of the Programme for Government.

The Department of Public Expenditure and Reform and the Department of Communications, Climate Action and Environment, developed Circular 20/2019: Promoting the use of Environmental and Social Considerations in Public Procurement.

The Circular highlights the potential for Departments to deliver wider social and environmental aims through public procurement. The circular provides a clear signal of the direction of travel towards greener public procurement.

The Circular requires Departments to incorporate relevant green procurement measures into their planning and reporting cycles, with reporting arrangements due to commence this year. The Annual Report template will be made available in 2020, by the Department of Communications, Climate Action and Environment

Further actions taken by the Office of Government Procurement in this area include; the publication of an Information Note on Incorporating Social Considerations into Public Procurement in December 2018, the establishment of a cross-departmental Social Considerations Advisory Group to advance work in this area, and the inclusion of green elements in a number of OGP framework agreements.

While it is for each Department’s policy unit to develop clear, verifiable and measurable criteria to advance green and social objectives, the OGP will facilitate the inclusion of these in the development of its frameworks and through its guidance materials.

Minister of State Smyth and I have met with the Chief Procurement Officer, and, along with my colleagues in Government, will be considering how best to implement commitments in the Programme for Government.

Among the measures taken by the OGP to integrate environmental sustainability are;

Electricity

The Government target is for the use of 33% renewable energy. The OGP have exceeded this target and currently source up to 45% green electricity for its clients.

Managed Print Services (MPS)

Clients with MPS have less devices, print double sided by default and generally have reduced print outputs. Environmental benefits include; reduced energy and paper usage, lower maintenance and fewer deliveries of consumables.

Fleet

Whole life costings are taken into account, including factors such as; emissions, mileage, and service costs. Price analysis is based on the best overall whole life cost.

OGP is currently in the market for battery electric vans and, later this month, goes to market for battery electric cars.

ICT

Competitions conducted under OGP frameworks can use a weighting range of between 5% and 20%, for factors such as; energy effectiveness, recycling, Energy Star ratings, cooling requirements, WEEE scheme and rated power usage.