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SME Sector

Dáil Éireann Debate, Tuesday - 1 June 2010

Tuesday, 1 June 2010

Questions (72, 73, 74)

Mary Upton

Question:

89 Deputy Mary Upton asked the Minister for Enterprise, Trade and Innovation if he considers the fact that Donegal County Council, in respect of tenders of less that €40,000 in value, requires suppliers to provide indemnities of as high as €6.5 million for not only the county council itself but the peace and reconciliation partnership and the special EU programmes body are consistent with his policy of promoting small business; and if he will make a statement on the matter. [22749/10]

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Written answers

The particular issue referred to by the deputy is a matter for the Minister for Environment, Heritage and Local Government.

The issue of improving access for SMES to public contracts is at the centre of the Governments current drive to eliminate barriers to SMEs access to public contracts. An increased involvement of SMEs into public purchasing will allow SMEs to make the most of their potential for job creation, growth and innovation. Government recognises the important business opportunities that public service contracts represent for business enterprises in the local and national economy and encourages participation to the greatest extent possible. As part of the Governments new strategy for public procurement, significant measures have been introduced which make it easier for small and medium enterprises (SMEs) to bid for public contracts.

Mary Upton

Question:

90 Deputy Mary Upton asked the Minister for Enterprise, Trade and Innovation if he will review the failure of the Competition Authority to challenge anti-competitive practices by the local authorities in which they set down conditions for suppliers that exclude small businesses; if he will send for a report on the failure of the Competition Authority to carry out its functions under section 4 and 5 of the Competition Act 2002 in respect of the anti-competitive practices of Donegal County Council which exclude small business from tendering for business through the setting of disproportionate indemnity charges; and if he will make a statement on the appearance of another example of regulatory failure. [22750/10]

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Mary Upton

Question:

91 Deputy Mary Upton asked the Minister for Enterprise, Trade and Innovation if he has received any advice, views or recommendations from the Competition Authority on anti-competitive tendering practices by the local authorities concerning their setting down of disproportionate indemnity requirements that exclude small suppliers; if, in view of complaints by small suppliers, he will communicate with the Competition Authority about the problem and invite such advice; and if he will make a statement on the matter. [22751/10]

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I propose to take Questions Nos. 90 and 91 together.

Overall policy responsibility for public procurement is a matter for my colleague the Minister for Finance. However, specific complaints about individual contracts should be brought to the attention of the relevant Government Department.

The Competition Authority is the statutory body responsible for the enforcement of competition law in the State. Section 29(3) of the Competition Act 2002 provides that the Competition Authority is independent in the performance of its functions. Under section 30(1)(b) of that Act, the Competition Authority is responsible for investigating any breach of the Act. As investigations are part of the day-to-day operational work of the Authority I have no direct function in the matter.

I understand however that the Competition Authority has received a number of complaints about pre-qualification criteria for public tenders. For example, a number of businesses have suggested that the level of turnover or indemnity insurance required by a local authority to tender for a contract is too high, disproportionate and anti-competitive.

The Competition Authority enforces the Competition Act 2002, which prohibits anti-competitive arrangements (under Section 4) and abuse of a dominant position (under Section 5). I am advised that for each of the complaints received, the Authority found no evidence of an anti-competitive arrangement or abuse of a dominant position within the meaning of the Competition Act. Consequently, the Authority cannot take any enforcement action because it does not appear that any breach of competition law has taken place.

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