€800m worth of Public Contracts leave Ireland every year

Tuesday 08 April 2014 18.33
Chambers Ireland said current procurement policy leaves many SMEs feeling excluded
Chambers Ireland said current procurement policy leaves many SMEs feeling excluded

€800m worth of public contracts leave Ireland every year, according to Chambers Ireland, which launched its Strategic Procurement Policy for Ireland today.

The policy puts forward a number of recommendations on how to make public procurement benefit the economy as a whole rather than simply acting as a cost saving exercise.

Chambers Ireland Chief Executive Ian Talbot said that current procurement policy in Ireland leaves many SMEs feeling excluded from the process.

"This is due to a narrow focus on cost by contracting authorities and overly complicated systems of pre-qualification and tendering. One of the side effects of this is that 8.8% or €800m worth of public contracts leave Ireland every year, well above the EU average of 3.5%."

The document outlines a number of ways in which procurement can support the wider economy.

"We believe the Office of Government Procurement (OGP) should use metrics such as job creation and long term benefit for the economy. Too many contracts continue to be awarded on price alone without taking into account the number of jobs created in Ireland or monies that could be lost in tax revenue," Mr Talbot added.

A recommendation to move the OGP from the Department of Public Expenditure and Reform to the Department of Jobs, Enterprise and Innovation was made.

It is believed such a move would signal a commitment to supporting job creation and the local economy rather than solely focusing on cost.

There are also models of best practice across Europe which Chambers Ireland have suggested the Government consider implementing in Ireland.

"Taking the lead from the Netherlands on executing the Small Business Innovation Research (SBIR) programme and the UK on Compete For, a unique system which allows businesses to compete for opportunities and produce community benefits, would significantly improve the procurement process in Ireland", Mr Talbot said.

"The growth of indigenous Irish business is the single most important contributor to a sustainable economic recovery. If acted on, this strategy could result in a procurement policy of benefit to both buyers and suppliers. Crucially, however, it would also benefit all public procurement stakeholders and would contribute to a far-sighted, sustainable economic recovery," Mr Talbot concluded.