Wednesday, 27 February 2013

Questions (36)

Martin Ferris


36. Deputy Martin Ferris asked the Minister for Public Expenditure and Reform if he is encouraging small and medium enterprises to form consortiums when bidding for larger public procurement contracts; and in such instances the monetary value of a large contract. [10435/13]

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Written answers (Question to Public)

Guidelines issued by my Department (Circular 10/10) require public bodies to conduct the public procurement function in a way that facilitates and does not place barriers to participation of small and medium enterprises. In relation to improving access for SMEs to larger contracts, the guidance advises contracting authorities to consider sub-dividing of procurement requirements into “lots” where it would be appropriate, practical and can be done without compromising efficiency and value for money. In cases where it is not possible to divide a larger contract into lots, contracting authorities are advised to ensure that the terms of the contract facilitate the inclusion of smaller enterprises. In this regard, tenders documentation can be developed in a manner that enables SMEs 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.

Given the variety of supplies and services tendered for by the public sector, Circular 10/10 does not assign a monetary value to define what a large contract is. This is because certain contracts for supplies and services may not be suited to SMEs for non-monetary reasons (e.g. the supply of electricity, pharmaceuticals, heavy machinery and large scale IT software projects).

I would add that National Procurement Service tender documentation has been developed to encourage the participation of SMEs. For example, the contract for office supplies was divided into three individual lots for Stationery, ICT Consumables and Paper. SMEs that believed the scope of the competitions were beyond their technical or business capacities were encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. Through such relationships they could participate and contribute to the successful implementation of any contracts that resulted from these competitions and therefore increase their social and economic benefits.

Larger enterprises were also encouraged to consider the practical ways that SMEs could be included in their proposals to maximise the social and economic benefits of the contracts that result from these tenders. For example, Codex Ltd, an indigenous company, won the Stationery contract, with an estimated value of €10m per annum, and is sourcing up to 60% of their products using 136 local agents and manufacturers.

The National Procurement Service (NPS) established its 'Working Group to assist Small and Medium Enterprises' in February 2012 to facilitate open discussion on the issue of public service procurement. The Working Group consists of representatives from the NPS, the Health Service Executive, the Irish Business and Employers Federation, the Irish Small and Medium Enterprises Association, Chambers Ireland, and the Small Firms Association. The Group has met on a number of occasions and has raised many issues relating to procurement and particularly how these issues impact on SMEs. Resulting from these discussions the NPS has developed a training programme to educate SMEs in how to participate effectively in the public service procurement process. To date the NPS has facilitated workshops and presented at seminars to over 3,500 SMEs nationwide.