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Public Procurement Must Be About Strategic Goals Not Just Cost Saving

Apr 08, 2014

€800 Million Worth of Public Contracts Leave Ireland Every Year

Chambers Ireland has today (08/04/14) launched A Strategic Procurement Policy for Ireland which 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.

Speaking this morning, Chambers Ireland Chief Executive Ian Talbot said "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 €800 million worth of public contracts leave Ireland every year, well above the EU average of 3.5%.”

“Our 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.”

“The OGP is currently located within the Department of Public Expenditure and Reform. This sends the message that their main priority is cost saving. We propose moving the OGP to the Department of Jobs, Enterprise and Innovation which would signal an approach to procurement that focuses on opportunity, job creation and supporting the domestic economy.”

“There are many models of best practice across Europe and we suggest the Government take a closer look at some with a view to implementing them in Ireland. Taking the lead from the Netherlands on executing the Small Business Innovation Research (SBIR) programme and the UK on CompeteFor, a unique system which allows businesses to compete for opportunities and produce community benefits, would significantly improve the procurement process in Ireland.”

“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,” he concluded.

Download A Strategic Procurement Policy for Ireland here.

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For further information contact Amy Woods, Chambers Ireland on 01 400 4319, 086 6081605 or email amy.woods@chambers.ie
 
Notes to Editors
Key Recommendations
A Strategic Procurement Policy for Ireland outlines a range of recommendations to improve the process of public procurement. Key recommendations include:

•    Move the OGP from the Department of Public Expenditure and Reform to the Department of Jobs, Enterprise and Innovation signalling a commitment to supporting job creation and the local economy rather than solely focussing on cost

•    Transpose the new European Union directives into national law in a timely fashion, without any gold-plating

•    Reduce the number and types of contracts being awarded on the basis of price alone. An appreciation of the benefits to the Irish economy in terms of jobs created or revenue raised through taxation should become the norm in tendering procedures

•    Complete the pilot Small Business Innovation Research (SBIR) programme, announced in the Action Plan for Jobs 2014, in a timely fashion; guarantee funding for its further use and encourage contracting authorities to maximise its potential.

•    Simplify the process of pre-qualification and reduce the amount of material that must be provided by suppliers at this stage. Make the process of ‘banking’ or saving information on the system for use in subsequent tenders work better for SMEs

To see the full list of recommendations, download the document here.

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