Tuesday, 23 June 2020

Ceisteanna (99)

Brendan Smith


99. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform if he will amend public procurement processes to ensure that small and medium enterprises are not disadvantaged in tendering for the provision of services to the State such as provisions for schools and other public services, in view of the fact that in recent years small enterprises have lost valuable business at local level due to more purchasing being centralised and resulting in some instances in products being sourced from outside this jurisdiction and a loss in revenue to the State; and if he will make a statement on the matter. [12570/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

Public procurement is key priority for Government and has undergone significant reform aimed at ensuring sustainable delivery of much needed public services while also encouraging and supporting SME participation in these business opportunities. This approach is beneficial for the State because it nurtures competition which ensures value for money is maintained and provides SMEs with a platform to take advantage of similar opportunities in Ireland and across the European Union.

Specifically, the Office of Government Procurement (OGP) has developed a suite of policy measures aimed at assisting SMEs to access public procurement opportunities (implemented through Circular 10/14). These include:

- Proportionate financial capacity criterion (turnover requirements limited to twice the contract value);

- Contracting authorities are encouraged to divide public contracts into lots;

- Provision for “consortia bidding” to assist SMEs to participate in procurement procedures where they would not have the relevant capability or scale; and

- Public bodies are required to advertise contracts for goods and services valued above €25,000 on the national eTenders portal.

In addition, my colleague, Minister of State Patrick O’Donovan, who has responsibility for public procurement, has chaired quarterly meetings of an SME Advisory Group, in accordance with the Programme for Government. This ensures that the voice of Irish SMEs (through the industry representative bodies ISME, IBEC, SFA, Chambers Ireland, and CIF) is heard by Government.

The OGP proactively engages with the Department of Business, Enterprise and Innovation, Inter-Trade Ireland and Enterprise Ireland to promote SME access to public procurement. The OGP participate at Go-2-Tender workshops and Meet the Buyer events held across the country which are designed to help SMEs.

An SME Communication Strategy sub-group, chaired by the OGP, was established in 2017 as a joint venture with the industry representative bodies. This further promotes awareness of potential opportunities and supports available for SMEs in tendering for public contracts. A series of information videos explaining specific public procurement topics, along with case studies of SMEs who have won government contracts, was launched by Minister of State O’Donovan last year. A series of focused and targeted breakfast briefings have also taken place around the country in conjunction with Inter-Trade Ireland and the SME Advisory Group partners.

The most recent Public Service Spend and Tendering Analysis Report for 2017 published last December involved an analysis of €4.912 billion expenditure across 71 public service bodies. The report indicates that 94% of the analysed expenditure is with firms within the State and 54% is with SMEs unchanged from 2016 and up from 52% in 2015. SMEs have the greater share of spend in 10 of the 16 procurement spend categories. This report also analyses 2017 tendering activity in the public service as recorded on the eTenders public procurement platform. That analysis shows that 75% of tender notices are smaller value (below OJEU threshold) tenders. The median (typical) estimated contract values for tenders analysed in 2017 is €90,000 and is less than or equal to €100,000 in 14 of the 16 spend categories. This indicates that Government contracts in Ireland are accessible to SMEs given the low median size of estimated contract values.

The OGP continues to proactively engage with business to enhance the significant measures already in place to support SME access to public procurement opportunities.