Tuesday, 27 May 2014

Questions (326)

Alan Farrell

Question:

326. Deputy Alan Farrell asked the Minister for Public Expenditure and Reform the action he is taking to offset any adverse impacts that the public sector procurement programme may have on small and medium enterprises and their local economies; if he has examined the benefit that the awarding of public sector procurement tenders to indigenous businesses would have; if he has taken such factors into consideration in determining the way a decision is to be reached where the award of such a tender is between an Irish based company and a foreign based company; and if he will make a statement on the matter. [23092/14]

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Written answers (Question to Public)

Public Procurement is governed by EU and National rules. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money. It would be a breach of the EU rules for a public body to favour or discriminate against particular candidates on grounds such as nationality, organisational size, etc. and there are legal remedies which may be used against any public body infringing these rules.

The Government acknowledges the significant role that SMEs play in the Irish economy and is committed to ensuring that SMEs are fully engaged with public sector procurement and the opportunities presenting.

In order to encourage greater SME participation the Office of Government Procurement 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. These 'Meet the Buyer' events are run in conjunction with Enterprise Ireland and InterTrade-Ireland. To date the OGP has facilitated workshops and presented at seminars to over 4,500 SMEs nationwide. These events afforded suppliers an opportunity to meet and discuss the issues with public service buyers and provide networking opportunities for suppliers and encourage consortia-building.

My Department has also recently finished reviewing and updating existing guidelines and procedures aimed at promoting SME participation in public procurement. Circular 10/14, launched on 17 April, sets out new initiatives aimed at opening up opportunities for small businesses to bid for State business. These new guidelines are aimed at reducing the administrative burden on businesses that want to tender for public contracts. The SME Working Group, established under the Government's Action Plan for Jobs, was consulted on the new Guidelines. The SME Working Group is chaired by the Office of Government Procurement and includes representatives from ISME, IBEC, Inter Trade Ireland, Enterprise Ireland, the Competition Authority, the Small Firms Association, Chambers Ireland and the Department of Jobs, Enterprise and Innovation. The new Circular has been broadly welcomed by industry representative associations.

In 2011, 10.55% (valued at €240 million) of the total known awarded contracts above EU threshold by the State went to non-domestic companies. This represents less than 5% of the overall annual public procurement spend (approximately €13.1 billion. It is also important to remember that open tendering is a two way street and that it provides Irish companies with opportunities to compete abroad. The public procurement market in the EU is estimated to be valued in excess of €2.4 trillion. The open market regime offers opportunities for Irish companies to win business abroad and reliable EU studies indicate that many Irish businesses are successful in this regard.

The reform of public procurement across the public service is on-going and will continue to provide opportunities to the SME sector to win business. The Office of Government Procurement will continue to work with industry to ensure that winning government business is done in a fair, transparent and accessible way and to ensure that government procurement policies are business friendly.