Dáil Éireann Debate, Thursday - 5 July 2018
96. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform his plans to introduce changes to the public procurement process to enable more small and medium enterprises tender for State contracts and the provision of State services; and if he will make a statement on the matter. [29932/18]
View answerPublic 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 the best value for money. It would be a breach of the EU rules for a public body to favour particular candidates on grounds such as organisation size, locality, nationality etc., and there are legal remedies which may be used against any public body infringing these rules.
However, there is a recognition at EU Level of the need to promote and facilitate SME participation in public procurement. The revised EU Directives on Procurement, transposed into Irish law in May 2016, are intended to make it easier for businesses and SMEs to tender for public sector procurement contracts. Measures specifically designed to improve access for SMEs and start-ups include:
- financial capacity criterion is generally limited to twice contract value - there are no centrally imposed requirements for a minimum turnover. Establishing the appropriate suitability criteria that are relevant and appropriate to a particular contract is, of course, a matter for the contracting authority concerned. This is because the contracting authority is in the best position to gauge the appropriate levels of financial capacity that are appropriate to the needs of that specific contract;
- discretion to divide public contracts into lots, with the proviso that opting not to divide a contract into lots must be explained in the procurement documents or the report on the procurement process;
- electronic methods of communication are mandated in parts of the tender process;
- the introduction of the European Single Procurement Document (ESPD), a self-declaration form aimed at reducing red tape for suppliers;
- provision for “consortia bidding” may assist SMEs to participate in procurement procedures where they would not have the relevant capability or scale if they were to bid as sole tenderers;
- explicit provision for pre-market discussion with suppliers and independent experts, subject to safeguards against distorting competition or violating transparency and non-discrimination principles;
- reductions in the time limits for receipt of tenders by approximately 30% compared to the position under the 2006 Regulations;
- Member States are required to report back to the Commission every 3 years on SME participation in public procurement.
A number of these measures had been accelerated into policy in 2014 in advance of the transposition of the revised Directives by Circular 10/14 - Initiatives to assist SMEs in Public Procurement, issued by the OGP.
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 OGP works 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. My colleague, Minister of State Patrick O’Donovan, who has responsibility for public procurement, chairs quarterly meetings of an SME Advisory Group, so that the voice of Irish SMEs (including ISME, IBEC, SFA, Chambers Ireland, and CIF) can be heard by Government. SMEs are also encouraged to register on the Government's eTenders portal so that they can be notified of upcoming tendering opportunities.
The OGP proactively engages with the SME industry representative bodies as well as the Department of Business, Enterprise and Innovation, InterTrade Ireland and Enterprise Ireland to promote the engagement of SMEs in public procurement. Evidence of the work and co-operation in the area can be seen in events such as "Go-2-Tender" workshops and "Meet the Buyer" events.
A SME Communication Strategy sub-group, chaired by the OGP, was also established in 2017 as a joint venture with the industry representative bodies to further promote awareness of potential opportunities and supports available for SMEs in tendering for public contracts. As part of this initiative a series of informative YouTube videos explaining specific public procurement topics, along with case studies of successful SMEs who have won government contracts were launched on the OGP website earlier this year. A series of focused and targeted breakfast briefings have also been scheduled around the country in conjunction with InterTrade Ireland and the SME Advisory Group partners.
The data analysed by the OGP and published last September (2015 Public Service Spend and Tendering Analysis Report) indicates that 94% of the State's expenditure is with firms within the State and the majority of spend analysed is with SMEs.
The OGP will continue to proactively engage with business and strive to enhance the significant measures already in place to support SME access to public procurement opportunities.
