Dáil Éireann Debate, Wednesday - 29 May 2013
114. Deputy Charlie McConalogue asked the Minister for Public Expenditure and Reform when a reply will issue to this Deputy's correspondence (details supplied); if he will provide an update on the current plans for procurement; and if he will make a statement on the matter. [25985/13]
Amharc ar fhreagraUnder EU law, public contracts above a 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.
The National Procurement Service (NPS) has put in place a number of national arrangements designed to secure better value for money from leveraging the public service’s buying power in relation to a range of goods and services that are commonly purchased across the public service. These national arrangements have benefits that include: cash savings; administrative savings from reduced duplication of tendering; greater purchasing expertise; improved consistency; and, enhanced service levels.
In some instances the take up of the NPS arrangements has been low. In order to increase the usage of the NPS arrangements and thereby secure best value for money, the Government decided that it should be mandatory for public service bodies to use specified national procurement arrangements. Last year my Department issued Circular 06/12 which implements the Government decision by making it a mandatory requirement that public service bodies avail of specified national arrangements put in place by the NPS.
Where a mandatory framework arrangement exists, any public service body intending to make a purchase other than through the framework arrangement will need to ensure that it can explain the rationale for not using the NPS arrangement and provide a value for money justification that takes account of the full costs including those incurred in managing its own procurement process.
While the key purpose of Circular 6/12 is to enable the State to do more with less by aggregating procurement to secure better value for money, it is worth noting that such aggregation arrangements can be implemented in a manner that achieves value for money with a minimal negative impact, or indeed a positive impact, on SMEs. While a number of the categories of goods and services mandated under the Circular are suited to single supplier national arrangements, these need not be accepted as the norm. The greater use, where appropriate, of multi-supplier frameworks can address local supplier issues while also ensuring on-going cost competitiveness of the framework itself. Such multi-supplier frameworks may also offer SMEs the opportunity to participate in national level contracts, thereby offering valuable reference work when competing for public procurement contracts in other jurisdictions.
In relation to plans for further reform of public procurement, an external review of the central procurement function was commissioned by the Department of Public Expenditure and Reform. The report of the review, which was published late last year, found that significant savings can be achieved through the implementation of a transformational change to the central procurement model. In December 2012, arising out of recommendations in the report the Minister announced the appointment of a Chief Procurement Officer (CPO) to lead a key element of the Government’s Public Service Reform agenda. The new approach to public procurement will involve integrating procurement policy, strategy and sourcing in one office; strengthening spend analytics and data management; much greater aggregation of purchasing across public bodies to achieve better value for money; examining the specifications set out for goods and services; evaluating demand levels to assess how demand and volume can be reduced; and strengthening supplier and category management.
Since the appointment of Paul Quinn, CPO, on 28 January 2013, he has initiated and completed a series of engagements (workshops and one-to-one meetings) with key stakeholders within the public sector and their representatives in relation to the development of the proposed governance structures, implementation plan, transition arrangements and savings targets for the procurement function. The following sectors were engaged in workshops / meetings: Health, Education, Local Government, Defence, Justice, and other Central Government Departments.
To summarise: we in government want better value for money for our substantial procurement spend and we want Irish SMEs, where necessary, to form alliances and networks to ensure they can tender on a competitive basis for this work. To ensure the reform process take account of the needs of stakeholders further consultations will be undertaken with employees and workers’ representatives as the new Office for Government Procurement is established. We are committed to ensuring that SMEs are fully engaged in the process and will be encouraged, where necessary, to form alliances and networks to ensure they can tender on a competitive basis for this work.
A response to the correspondence that the Deputy has referred to and provided details on in his question will issue shortly.
