Wednesday, 9 October 2013

Questions (41)

Brendan Smith


41. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform if progress is being made on ensuring that public service procurement contracts are secured by Irish firms in a manner that is within EU guidelines; and if he will make a statement on the matter. [42505/13]

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Written answers (Question to Public)

Under EU law, public contracts above certain values must be advertised EU-wide and awarded to the most competitive tender in an open and objective process. The aim is to promote an open, competitive and non-discriminatory public procurement regime which delivers value for money. It would be a breach of the rules for a public body to favour or discriminate against particular candidates on grounds of location or nationality and there are legal remedies which may be used against any public body infringing these rules.

I am aware that public procurement can be an important source of business for Irish small and medium enterprises (SMEs). Current guidelines (Circular 10/10) issued by my Department require public bodies to promote participation of SMEs in the award of public contracts. 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 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.

In order to encourage greater SME participation the National Procurement Service, over the past three years, has conducted a targeted programme of education for suppliers who wish to learn more about doing business with the Irish Public Service. This programme consists of seminars, workshops and large scale 'meet the buyer' events hosted nationwide. To date the National Procurement Service has facilitated workshops and presented at seminars to over 4,500 SMEs nationwide. Parallel with these events the National Procurement Service also works closely with business representative bodies such as ISME and IBEC to provide briefings for their members.

The National Procurement Service is responsible for producing annual statistical information in relation to above-EU threshold procurement activity by the Irish public sector and for providing these statistics to the European Commission. For works contracts the threshold is €5 million; for supplies and service contracts awarded by Government Departments the threshold is €130,000 and for the remainder of public bodies the threshold is €200,000. The threshold for supplies and service contracts of entities operating in utility sectors (water, energy, transport and postal) is €400,000. On average 5000 tenders for the procurement of goods, services and works are advertised on eTenders every year. I am informed by the National Procurement Service that the latest information available relates to 2010. In that year, the National Procurement Service estimates that approximately 5% of the overall spend went to non-domestic suppliers.

The importance of procurement policy becomes apparent when one sees that each year public authorities across the European Union spend 19% of GDP or approximately €2.4 trillion on goods, services and works. In this context, it is important to realise that the open market regime offers critical opportunities for Irish companies to win business abroad. In this regard, Enterprise Ireland and Intertrade 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.