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Office of Government Procurement

Dáil Éireann Debate, Tuesday - 4 April 2017

Tuesday, 4 April 2017

Questions (420, 421)

Dara Calleary

Question:

420. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the cost of the cancellation of a number of competitions (details supplied); if he is satisfied that due process has been followed in these cases; the actions he undertook when contacted about these competitions; and if he will make a statement on the matter. [16563/17]

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Dara Calleary

Question:

421. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the number of competitions and mini-competitions that were cancelled by the OGP, Office of Government Procurement, in 2016; the total cost of these cancellations; and if he will make a statement on the matter. [16564/17]

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Written answers (Question to Public)

I propose to take Questions Nos. 420 and 421 together.

Procurement is a key element of the Government's Reform agenda. Given the volume of spending, in the order of €12bn per annum on goods, services and works, it is essential that a strategic approach is adopted and value for money is achieved. The Office of Government Procurement (OGP) was established to drive the reform agenda, adopt a strategic approach and professionalise public procurement, leverage the State's spending power and deliver significant savings to the State.

Framework agreements are one of a number of ways in which the Office of Government Procurement (OGP) engages with the market to achieve value for money in the delivery of much needed public services. Framework agreements are established through competitive procurement processes and are agreements with suppliers or service providers which set out terms and conditions under which specific contracts can be made during the term of the agreement. Once established, public sector bodies can then avail of goods and services from the suppliers on the Framework. In general, contracts emanating from framework agreements take one of the following two forms:

- by means of direct draw down (i.e. the Contracting Authority does not need to hold a mini competition as there is a single supplier or a rota from which the next available supplier is chosen) - the framework establishes a panel of suppliers that compete for specific contracts awarded (mini-competitions) by Contracting Authorities over the lifetime of the agreement.

The OGP carries out market analysis to assess the need for a good or service and the nature of the market for that good or service. In consultation with public service bodies the OGP develops and manages the process to establish a framework. While the OGP facilitates contracting authorities through supporting mini-competitions under frameworks, it is the Contracting Authority that is legally responsible for any drawdowns/mini-competitions or awards given under the framework agreement.

In this regard, it should also be noted that competitions can be cancelled for a variety of reasons, e.g. each tender has a provision that allows for cancellation, for example where no tenders are submitted by the framework suppliers; where no suitable tenders or no suitable requests to participate were submitted; where the public body's requirements have changed; or where the proposal is more expensive than anticipated. Given the remit of the OGP and the value of aggregated arrangements such as frameworks, it is important that our approach to the market is done in a way that ensures value for money for the taxpayers and fairness for those suppliers competing for the procurement opportunity. The small number of cancellations, whilst unfortunate, are necessary to ensure value, suitability of good or service and the appropriate approach to market.

I am informed by the OGP that the latest available data on the eTenders system for 2016 indicates that of the 688 competitions run by the OGP in 2016 on behalf of Contracting Authorities throughout the State, 15 competitions were recorded as cancelled. I am advised that this figure is subject to change as work continues on processing tender competitions which commenced in 2016.

In relation to the specific cases referred to by the Deputy, the competitions were cancelled by the client after due consideration of the circumstances of the particular cases. The OGP advises clients having regard to the procurement regulations. The procurement regulations provide inter alia for due process for all parties.

From the OGP perspective, the costs for cancelling competitions are not recorded separately and are absorbed into overall running costs.

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