Peadar Tóibín
Question:300 Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform the steps he is taking to promote small and medium enterprises take up of procurement opportunities. [11321/12]
View answerTuesday, 24 April 2012
Questions (208, 209)
Written answers
I am very aware that public procurement can be an important source of business for local enterprises. In general, SMEs' flexibility and ability to respond speedily to requirements can be advantageous in competing for local contracts. Procurement guidelines (Circular 10/10) issued by my Department require public bodies to promote participation of small and medium-sized enterprises in the award of public contracts. These guidelines set out positive measures that contracting authorities are to take to promote SME involvement in a manner that is consistent with the principles and rules of the existing public procurement regulatory regime. The guidance also highlights practices that are to be avoided because they can unjustifiably hinder small businesses in competing for public contracts. The key provisions of the guidance include:
supplies and general services contracts with an estimated value of €25,000 or more to be advertised on the www.etenders.gov.ie website;
less use of "restrictive" tendering procedures and greater use of "open" tendering;
ensuring that the levels set by contracting authorities for suitability criteria are justified and proportionate to the needs of the contract;
sub-dividing larger requirements into lots where this is practical and can be done without compromising efficiency and value for money;
the needs and possibilities for small businesses to compete and supply to be taken into account when setting up panels/framework arrangements;
encouragement of small companies to combine with others to make a joint bid for a contract that they might not be in a position to perform on their own.
Both the National Procurement Service and the development agencies, such as Enterprise Ireland, offer training and support to businesses in order to raise awareness of public procurement opportunities and to improve the capacity of indigenous firms to compete effectively for these opportunities.
Peadar Tóibín
Question:301 Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform the number of State contracts that have increased in size in the past three years; if his attention has been drawn to contracts such as the Bord Gáis contract; the steps that he will take necessary to reverse the trend facilitated by the centralisation of procurement towards larger State contracts; and the way he will ensure that small and medium enterprises based job retention and creation can be promoted by changes to Government procurement. [11320/12]
View answer
The National Procurement Service (NPS) in the Office of Public Works has responsibility for initiatives in procurement to achieve efficiencies and value for money for the Irish taxpayers.
Since its formation in 2009, the NPS has put in place a number of national contracts for use by all Government Departments, Offices and Agencies. Prior to this, the Government Supplies Agency (GSA) had put in place contracts for use by Government Departments only. Due to their availability to a wider number of clients, all of the contracts put in place by the NPS are larger than those previously put in place.
The NPS has made continuous efforts to ensure that Irish Small and Medium Enterprises (SMEs) are able to take full advantage of the public procurement opportunities that arise and are available to them.
The NPS facilitate seminars for SMEs, which cover all the issues relating to competing for public procurement contracts, including: Public Procurement regulations, accessing the market opportunities, the tendering process and general guidance on how companies should approach the preparation of tenders. A number of seminars were delivered to ISME and to Chambers of Commerce in 2010 and 2011. Workshops were also delivered on public procurement opportunities in association with Enterprise Ireland and Intertrade Ireland. The NPS has also produced a leaflet "Top Tendering Tips for Public Sector Contracts", which is freely available.
A significant development in the area of facilitating the SME sector was the publication, by the Department of Finance, in August 2010 of Circular 10/10. These guidelines to public contracting authorities aim to ensure that tendering processes are carried out in a manner that facilitates participation by SMEs, while ensuring that all procurement is carried out in a manner that is legal, transparent and secures optimum value for money for the taxpayer. It addresses the concerns that SMEs have regarding access to public procurement opportunities and highlights practises that are to be avoided where they can hinder small businesses in competing for public contracts. These arrangements include:
greater open advertising of opportunities (threshold now €25,000),
a reduced requirement for paperwork (such as accounts) at the early stages of tendering,
an instruction that suppliers are not to be charged for access to tender opportunities,
an assurance that all criteria used would be appropriate and proportionate, and
an instruction that turnover and insurance levels would be set at proportionate levels.
NPS policy seeks to encourage participation by SMEs in public sector competitions. SMEs that believe the scope of a competition is beyond their technical or business capacity are encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. The NPS tender documentation for larger contracts allows and encourages SMEs to come together to bid for these contracts. Larger enterprises are also encouraged to consider the practical ways that SMEs can be included in their proposals to maximise the social and economic benefits of the contracts that result from a tendering exercise.
The NPS has conducted a major consultation process involving all energy stakeholders including: the Commissioner for Energy Regulation (CER); Department of Communications, Energy and Natural Resources, Energy providers and public service clients. Due to the nature of the energy market, the need to encourage greater competition and the potential size of the public service demand it was apparent that there was a distinct risk that a single public service contract would distort the market. The NPS concluded that the optimum procurement strategy for electricity and natural gas would, therefore, be through the use of multi party framework agreements.
The NPS conducted an EU competitive tender process which has resulted in Electricity and Natural Gas framework agreements being put in place for supply to the public sector. There are five different companies on the Electricity Framework and seven separate companies on the Natural Gas Framework.