The National Procurement Service (NPS) is currently engaged in a tender process for the procurement of Stationery and Office Supplies. This process is now at evaluation stage as the closing date for receipt of tenders was Tuesday 26 October 2010. No award has yet been made to any party.
The NPS is anxious to support SMEs and to this end included the following text in the Request for tender (RFT) of the Stationery and Office Supplies tender. It was felt that this strategy would enable SMEs participate in the process. "NPS policy seeks to encourage participation by Small and Medium Enterprises (SMEs) in this Competition. SMEs that believe the scope of this Competition is beyond their technical or business capacity are encouraged to explore the possibilities of forming relationships with other SMEs or with larger enterprises. Through such relationships they can participate and contribute to the successful implementation of any contracts, agreements or arrangements that result from this Competition and therefore increase their social and economic benefits. Larger enterprises are also encouraged to consider the practical ways that SMEs can be included in their proposals to maximise the social and economic benefits of the contracts that result from this tendering exercise”
The division of this tender into three distinct lots has also increased the possibilities for SMEs to tender individually, or form consortia that can enter competitive bids to win this State contract.
Utilising this approach has significantly increased the opportunities for Irish SMEs to compete in this tender process.
It should be noted however, that aggregating demand for a contract of this size, for low risk low value goods can yield substantial cost and administrative savings for the Exchequer as well as minimising legal exposure to the State, particularly in light of the recently transposed Remedies Directive.
Although the NPS views aggregation of requirements across the public sector as a significant contributor to delivering better value, the aggregation of demand is not suitable for all markets and categories. Before undertaking any major procurement project or entering a new procurement category, the NPS will make use of the optimum strategy for the particular market, and, where it is deemed appropriate and practical, the NPS will use framework agreements, or divide requirements into lots, when tendering for goods and services.
The NPS is fully cognisant of the difficulties SMEs are undergoing and as part of its strategy of training has provided procurement seminars to this sector. Furthermore, the NPS works closely with Enterprise Ireland to ensure that the maximum number of opportunities are made available to SMEs in all tender processes.
The number of non-domestic suppliers winning public procurement contracts in Ireland has been the subject of recent controversy.
The EU Commission released a statistic, suggesting that 17% of the number of contracts awarded in 2008 went to suppliers outside the jurisdiction. However, this statistic is based on incomplete data relating only to above threshold procurements, where contract notices were published, and the nationality of the winning tenderer disclosed.
When one compares the value (as opposed to the number) of contracts going to non-Irish companies in 2008, the figure actually amounts to less than 5% of the overall public spend on procurement. It should also be noted that the figures quoted by the EU Commission do not distinguish between companies in the UK and those based in Northern Ireland, so of the contracts going "abroad", many of the contracts may have stayed on the island of Ireland. The European Commission agrees that an alternative interpretation of their figures is that "about 95% of all procurement by value was from domestic suppliers".
Due to the incomplete nature of these statistics, it would be unwise to draw any conclusions from them, but from the information available, it would appear that the figure of 5% by value going to overseas companies has been broadly consistent over the years since 2005.
