New guidance designed to make it easier for small and medium-sized enterprises (SMEs) to tender for public contracts in Ireland was published in April 2014.
Circular 10/14, issued by the Department of Public Expenditure and Reform and applying to all public sector bodies, replaces guidance dating from 2010. The new guidance reflects developments in national procurement practice, in particular the establishment of the Office of Government Procurement (OGP) and the new High-Level Group on SME Access to Public Procurement. In addition, some of the changes in the new circular anticipate provisions of the revised EU Public Procurement Directives which are due to become law by April 2016.
Greater transparency: Public bodies are required to advertise tenders over €25,000 on www.eTenders.ie. From 1 August 2014, they will also be obliged to publish contract award notices for these contracts on eTenders (as well as in the Official Journal of the European Union where required).
Rules with SMEs in mind: For the first time, company turnover requirements must not be more than twice the estimated contract value. The circular contains detailed guidance on the insurance levels needed for public contracts; in the past, many buyers have sought excessively high insurance levels well beyond the reach of most SMEs. As before, any other capacity requirements must be both proportionate and relevant to attract as many responses as possible from the market.
Value for money: Buyers should use “whole life-cycle” criteria when awarding contracts wherever possible, rather than simply picking the bid with the lowest initial cost. This should allow SMEs an opportunity to compete on quality and service excellence as well as price.
Focus on start-ups and innovation: A welcome feature of the circular allows buyers to consider the prior experience of the individuals involved in a start-up SME rather than the company itself, which may not have an established track record. Buyers are strongly encouraged to consider consortium bids and to sub-divide contracts into lots. Supplier innovation is promoted by allowing buyers to accept reasonable variations to the initial specifications set out in tender documentation.
New structures for buyers: The OGP has established “Category Councils” to develop procurement strategies for sixteen different categories of goods and services. This should reduce fragmentation in the public sector and enable it to speak to the market with greater consistency.
Increased scope for open tendering: “Restricted” tendering procedures may only be used for advertised contracts for general goods and services worth €134,000 or more (up from €125,000 in 2010). The higher thresholds should present more opportunities for SMEs to bid through the simpler “open” tendering procedure.
The new circular contains some welcome changes to reduce the administrative burden on resource-constrained SMEs. The tightening of turnover requirements is being introduced in advance of implementation of the 2014 Public Procurement Directive and is particularly welcome. While the OGP’s focus on reform should make public procurement more accessible, implementation across the public sector remains the benchmark for success.