Dáil Éireann Debate, Tuesday - 21 July 2020
35. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the level of procurement leakage; his plans to develop and implement a procurement sourcing strategy across Government that would reduce the high level of procurement leakage to the EU average; his further plans to increase the proportion of tenders divided into lots to support SMEs; and if he will make a statement on the matter. [16820/20]
Amharc ar fhreagraStrategic public procurement can play a key role in responding to societal, environmental and economic challenges. Consequently, the inclusion of strategic public policy considerations in procurement processes is a key feature of the Programme for Government. Therefore, my Department is focused on ensuring that public procurement affords opportunities for SMEs to benefit from the significant tender opportunities carried out each year across the public service.
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 participating 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, the SME Advisory Group which is comprised of representatives from ISME, IBEC, SFA, Chambers Ireland, and CIF, and meets on a quarterly basis to ensure that SMEs have a platform to assist in the development of procurement policy and practice. Communication is a key factor in encouraging SMEs to engage in public procurement processes. To this end, the OGP established a sub-group of the SME Advisory Group to deal with this area. This group further promotes awareness of potential opportunities and supports available for SMEs in tendering for public contracts.
Similarly, the OGP proactively engages with the Department of Business, Enterprise and Innovation and development agencies to promote SME access to public procurement. The OGP participates at promotional events held across the country which are designed to help SMEs.
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. 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.
This is an important issue for Government and the OGP will continue to proactively engage with business to enhance the significant measures already in place to support SME access to public procurement opportunities.
