SFA meets Public Accounts Committee on Public Procurement

Thursday, 5 March 2015

SFA tells PAC that public procurement system is not working for small firms

Need to set small and micro firm targets for government tenders

SFA tells PAC that public procurement system is not working for small firms

Need to set small and micro firm targets for government tenders

A delegation from the Small Firms Association (SFA) met with the Public Accounts Committee this morning (Thursday, 5th March 2015) to discuss issues around public procurement.

SFA Chairman, AJ Noonan commented: “It is essential that the procurement system is subjected to scrutiny by PAC to ensure that it is achieving real value for money, and that contracts are awarded with a whole economy perspective in mind, in particular an assessment of the impact of lost jobs in micro enterprises in all towns and villages around the country, who have lost contracts under the new system. The system should be redesigned from a think small first perspective, as recommended by the EU, and actions should be put in place to remove the barriers raised against small businesses winning public contracts.”

Mr AJ Noonan continued: “In its pursuit of lowest price, the Government is neglecting the fact that this will not deliver either the quality, cost in use savings or service levels it desires, but will result in lost jobs here at home. Centralised large aggregated contracts make it increasingly more difficult for small innovative companies to compete and this means a serious potential loss of business. These should be broken into lots. The idea that small companies can simply join together with their competitors and compete for larger contracts is simplistic in the extreme.”

In 2013, the published data suggests that 28% of tenders are being awarded to countries outside of Ireland, up from a previous high of 18% recorded. Ireland frequently tops the list of countries most likely to award to non-national countries and this trend is increasing all the time. “This is completely unsatisfactory. We need to put supporting Irish small firms at the heart of all Government policy making”, argued Mr Noonan.

“There is huge wastage in the system at present. In Ireland each year nearly €200m is spent by suppliers writing proposals and bidding on government contracts and given that only 20pc of proposals are successful, that means that some €160m is wasted by businesses,” stated the SFA Chairman.

“In order to ensure that public procurement is both efficient and effective from a whole economy perspective, what we now need is:
    Removal of the price priority
    Set targets for small and micro firm procurement, as in other jurisdictions
    Change the provisions around sub-dividing a contract into lots as currently set out in Circular 10/14
    A full appeals mechanism should also be implemented forthwith, which would include mandatory feedback on all lost tenders, more scrutiny and transparency throughout the system, an internal appeals procedure in each department and the opportunity to appeal to an Ombudsman.”

Ends.

For further comment, please contact: AJ Noonan, SFA Chairman at Tel: 086-2592610.

Issued by Patricia Callan, SFA Director Tel: 01 605 1602 / 087 6999 345, e-mail: patricia.callan@sfa.ie or Tweet: @SFA_Irl
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