Ministers Donohoe and Smyth announces update to guidance to support SME participation in public procurement

The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe, brought to Cabinet yesterday (Tuesday 21 March) a new government initiative aimed at supporting SME participation in public procurement.

This initiative will act as an update to previous guidance, which introduced a number of measures aimed at assisting SMEs to access public procurement opportunities.

In the context of the government’s ongoing commitment to supporting SMEs to compete for public contracts, the Office of Government Procurement (OGP) was asked to undertake a review of the current guidance for public bodies. The results of this review highlighted the need for updated guidance for public bodies on measures to assist SMEs to access public procurement opportunities.

The circular sends an important signal of the government’s commitment to support SMEs so that they can compete for public procurement contracts as set out in the Programme for Government "Our Shared Future".

It builds on the work already taking place across Government, for example, through the SME Advisory Group chaired by Minister of State with responsibility for Public Procurement and eGovernment, Ossian Smyth, and through the SME & Entrepreneurship Taskforce chaired by Minister Simon Coveney, which has identified promoting the participation of SMEs in public procurement as one of its ten priorities.

The new guidance includes:

an increase to the threshold at which all contracts for goods and services must be advertised on eTenders from €25,000 to €50,000 (exclusive of VAT)
an increase to the threshold at which all contracts for works must be advertised on eTenders from €50,000 to €200,000 (exclusive of VAT)
updated general measures for good procurement practice, such as appropriate corporate governance, reaffirming the principles underpinning all public procurement, and the continued applicability for works procurement
enhanced measures that public bodies should take to promote transparency, including a requirement to publish contract award information for all procurements over €25,000 (exclusive of VAT)
the specific measures that public bodies should take to promote SME participation, including the use of proportionate financial capacity and insurance requirements
a reminder to public bodies of their obligations around the use of central procurement arrangements
a reiteration of the role that eTenders, the national e-tendering platform, can play in promoting SME participation
updated guidance for insurance levels for supplies and general services

Speaking about the initiative, Minister Donohoe said:

“I am pleased to bring this initiative, which will come in the form of a circular soon to be published, to Cabinet. It sends an important signal of our government’s commitment to supporting Small and Medium Enterprises (SMEs) so that they can compete for public procurement contracts.

“The opportunities for SMEs through public procurement are numerous and varied, and increasing levels of SME engagement will drive innovation and new ideas in the marketplace.

“The changes to the threshold levels are intended to reduce the administrative burden and costs associated with tendering for lower valued contracts. The increases also account for the inflation experienced across the different sectors of the economy since these threshold levels were set in 2010. It is expected that the simplification of the process for procuring lower value contracts will address these barriers to SME participation thereby enabling an increase in the number of responses to procurement opportunities and, with it, competition and value for money.

“This updated circular will help to support public bodies in enabling SMEs to access opportunities available to them, with expectant benefits for both sides.”

Minister of State Smyth also welcomed the initiative, saying:

“I am very pleased to see Minister Donohoe bringing this initiative to Cabinet. It is vitally important that SMEs are aware of the possibilities available through public procurement, and that it is made as easy as possible for them to access them.

“This circular has been developed following an extensive consultation process with stakeholders, including the SME Advisory Group, which I chair on a quarterly basis. Going forward, we will continue to proactively engage with business and colleagues across Government to enhance the measures and strategies in place to support SME access to public procurement opportunities.”

Notes

Previous guidance issued by the department, via Circular 10/2014, introduced a number of measures aimed at assisting SMEs to access public procurement opportunities, building upon its predecessor Circular 10/2010.

Minister of State Smyth chairs quarterly meetings of the SME Advisory Group, which includes industry representative bodies Irish SME Association (ISME), Irish Business and Employers Confederation (Ibec), Small Firms Association (SFA), Chambers Ireland, and the Construction Industry Federation (CIF).

Public bodies can find information on the new circular on the OGP's dedicated webpage.