Circular 10/14 - Iniatives to Assist SMEs in Public Procurement

  1. Introduction

The Department of Public Expenditure and Reform has published Circular 10/14 which contains initiatives aimed at facilitating SME access to public contracts. Circular 10/14 replaces the existing Circular 10/10 and is intended to strengthen and update the measures contained in Circular 10/10.

  1. Quick Read
  • New requirement for public bodies to publish contract award notices for contracts valued over €25,000 on eTenders with effect from 1 August 2014.
  • Open procedure to be utilised for goods and services contracts below the value of €134,000 (excl. VAT).
  • Minimum financial turnover requirement not to exceed twice the estimated contract value for routine goods and services contracts.
  • Contracting authorities are strongly encouraged to provide written feedback to unsuccessful bidders for contracts below EU value thresholds.
  1. Key Features of Circular 10/14
  1. Market Analysis and Communication: Buyers are encouraged to undertake market analysis prior to going to tender and where relevant to consult with the newly established "Category Councils". There are sixteen Category Councils which will develop commercial strategies for categories of goods and services with a major spend. Similar to Circular 10/10, the use of Prior Information Notices to communicate procurement plans to the market is encouraged.
  2. Sub-division of Contracts and Framework Contracts into Lots: As was previously the case, buyers are encouraged to divide contracts and framework agreements into lots.
  3. Use of Restricted Procedures: Circular 10/14 provides that restricted tendering procedures (where potential tenderers must first pre-qualify to submit a tender) should not be used for public goods and services contracts below the value of €134,000 (excl. VAT). The threshold is open to review and is slightly higher than the previous €125,000 threshold meaning the open procedure will be used for more contracts. A new threshold for works and related services contracts (currently €250,000) is to be published.
  4. Capacity Requirements: Buyers are reminded to set relevant and proportionate capacity requirements and encouraged to allow bidders to provide self-certifications in relation to pre-qualification requirements at the outset of procurement processes. In the case of a newly formed SME, buyers may consider the prior experience of the individuals who formed the SME.
  5. Turnover Requirements: Where a minimum turnover requirement is set for routine goods and service contracts, the Circular provides that it should not exceed twice the estimated contract value. For framework contracts, the value of individual draw-downs should be considered.
  6. eTenders Contract Notices and Award Notices: Buyers are still required to advertise contracts for goods and services above the value of €25,000 and for works and related services above €50,000 on the eTenders portal. The Circular also encourages use of the 'quick quotes' and mini-competition facilities the portal offers. There is a new requirement for buyers to publish contract award notices for contracts valued over €25,000 on eTenders with effect from 1 August 2014.
  7. Use of eTenders: Buyers are asked to encourage suppliers to register with and upload their details onto eTenders. The new Circular also provides that buyers should make tender documents available on eTenders for downloading as well as promoting online tender submission for goods and services contracts.
  8. Insurance: Buyers continue to be encouraged to ensure that insurance requirements are reasonable and proportionate. The new Circular provides guidance around setting insurance levels and recommends consultation with the State Claims Agency when setting requirements. A guide for assessing insurance level requirements is provided in an appendix to the Circular.
  9. Life Cycle Costing: In line with recent guidance and policy documents published by the Government, Circular 10/14 encourages use by buyers of life cycle costing in tender documents, where appropriate.
  10. No Charging for Tender Opportunities: Buyers continue to be prohibited from charging for access to tender competitions unless requiring refundable deposits for hard copy documents.
  11. Debriefing: The new Circular strongly encourages provision of written feedback to unsuccessful bidders for contracts below EU value thresholds.
  1. Summary

The initiatives in Circular 10/2014 to encourage SME access are broadly in line with those in Circular 10/10. The new mandatory requirement to publish contract award notices for all contracts valued over €25,000 will provide greater transparency for contracts in categories of most interest to many SMEs but will undoubtedly increase the administrative burden on contracting authorities.

Circular 10/14 is available on the website of the Office of Government Procurement: http://www.procurement.ie/