Chambers Ireland has said that Irish small and medium enterprises are at an unfair disadvantage when they tender for public contracts.
Public sector contracts worth €9 billion will be available in Ireland this year. But only 10% of companies here pitched for any of the 7,500 contracts available last year.
The value of Irish public sector contracts awarded to firms outside the state was 8.8% compared to the EU average of 3.5%, Chambers Ireland said.
Chambers Ireland set out a number of reasons it believes may be behind this including an excessive focus on securing the lowest price bid and a failure to take into account the overall economic impact when awarding contracts.
It said that some of the requirements to just apply for a tender are highly onerous and often automatically exclude local businesses from taking part in local tenders.
Seán Murphy, Chambers Ireland's deputy chief executive, said that factors such as the long term benefit to the economy, job creation and supporting indigenous business must be given greater consideration when assessing tenders.
"There is a clear sense of anger and frustration amongst the SME community - which makes up over 99% of businesses in the State - that they are being sidelined by Government in favour of cheaper overseas options,” he concluded.