Fears for SMEs in public procurement process

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Fears that small and medium enterprises could lose out as the Department of Public Expenditure and Reform places more emphasis on centralised public procurement systems were expressed by Deputy Paul Connaughton at last week’s meeting of the Public Accounts Committee.
Speaking at the committee meeting on Thursday morning, Deputy Connaughton welcomed the fact that the Department of Public Expenditure and Reform aims to save €500 million over the next three years by instigating a new public procurement system, but asked if proper investigations had been made into the potentially disastrous effects that this could have on small and medium enterprises, particularly those in rural regions or those without the necessary capacity to tender for large government contracts.
During the course of the meeting, Deputy Connaughton quizzed Robert Watt, Secretary General, Department Public Expenditure and Reform and Paul Quinn, Chief Procurement Officer with the Department of Public Expenditure and Reform. He asked if there was any joined up thinking between the Department of Public Expenditure and Reform and the Department of Jobs and the Department of Social Protection in relation to the effect that the centralising of procurement could have on jobs in the state and the knock-on increase which could result for the Department of Social Protection.
In reply, Mr. Paul Quinn, Chief Procurement Officer, said that 97% of the contracts currently being offered are valued at €125,000 or less. He also pointed out that abnormally low tenders are investigated and outlined an engagement process between the Department of Public Expenditure and Reform and business representative associations such as IBEC, the Small Firms Association and Chambers Ireland.
‘Everyone across the state recognises the need for the state to save money and the need for lean government and this is something that this government is constantly striving for, but we must ensure that the actions we take do not have a disproportionately damaging effect on the small and medium business sector, which is the lifeblood of Irish economic life.
‘I raised this issue after being approached by many business owners across rural Ireland who felt that they could be excluded if the public procurement process is so cumbersome that only the large global players are able to take part.
‘I welcome the efforts being made by the Department of Public Expenditure and Reform to save money but have urged increased joined-up thinking in relation to the knock-on effects that overly centralised systems will have and have highlighted the need to ensure that SMEs are made aware of the nature and extent of public procurement and are also educated in the process so that they can compete with the larger global companies as this drive for more centralised public procurement continues.
‘This is an issue I will continue to monitor as the level of public procurement increases in the months and years to come and I would welcome the input of local business owners in terms of the barriers that they face in competing for public contracts.’