Vol. 239 Wednesday, No. 15 6 May 2015. DÍOSPÓIREACHTAÍ PARLAIMINTE PARLIAMENTARY DEBATES SEANAD ÉIREANN TUAIRISC OIFIGIÚIL—Neamhcheartaithe (OFFICIAL REPORT—Unrevised) Insert Date Here 06/05/2015A00100Business of Seanad 2 06/05/2015B00500Commencement Matters 3 06/05/2015B00650Public Procurement Contracts ����������������������������������������������������������������������������������������������������������������������������������3 06/05/2015D00950Seaweed Harvesting Licences ����������������������������������������������������������������������������������������������������������������������������������6 06/05/2015O00100Order of Business 9 06/05/2015CC00100Appointment of Receivers: Motion 21 06/05/2015SS00100Spring Economic Statement: Statements 43 SEANAD ÉIREANN Dé Céadaoin, 6 Bealtaine 2015 Wednesday, 6 May 2015 Chuaigh an Cathaoirleach i gceannas ar 230 pm Machnamh agus Paidir. Reflection and Prayer. 06/05/2015A00100Business of Seanad 06/05/2015A00200An Leas-Chathaoirleach: I have notice from Senator Marie Moloney that, on the motion for the Commencement of the House today, she proposes to raise the following matter: The need for the Minster of State with responsibility for the Office of Public Works to outline whether he would consider changing the tendering procurement process to allow for funding by region only to ensure jobs are kept in regional areas in light of the emphasis be- ing put on the Action Plan for Jobs in regional areas I have also received notice from Senator Trevor Ó Clochartaigh of the following matter: An gá go ndéanfaidh an tAire Comhshaoil, Pobail agus Rialtais Áitiúil soiléiriú a thab- hairt maidir le líon na n-iarratas ar cheadúnais bainte feamainne atá le cinneadh ag a Roinn faoi láthair agus cathain a mheasann an Roinn a dhéanfar cinntí ar na hiarratais atá ar fei- theamh I have also received notice from Senator Colm Burke of the following matter: The need for the Minister for Health and the HSE to outline details of the financial con- tribution made by fair deal recipients from their pensions to the overall cost of their nursing home care and the percentage of the total cost that this comprises I regard the matters raised by Senators Moloney and Ó Clochartaigh as suitable for discus- sion and they will be taken now. I regret that I have had to rule out of order the matter raised by Senator Burke on the grounds that it is a repeat of a similar Commencement matter raised on 30 April 2015 06/05/2015B00100Senator Colm Burke: It is a totally different question 06/05/2015B00200An Leas-Chathaoirleach: Unfortunately, the Cathaoirleach made the ruling 06/05/2015B00300Senator Colm Burke: I understand I just want to emphasise that 2 6 May 2015 06/05/2015B00400An Leas-Chathaoirleach: The Senator might raise the matter with him tomorrow morning I did not pick the matters and am representing the Cathaoirleach as Leas-Chathaoirleach. 06/05/2015B00500Commencement Matters 06/05/2015B00650Public Procurement Contracts 06/05/2015B00700Senator Marie Moloney: I thank the Minister of State for coming to the House to take this matter. In anticipation of his answer, I know what he is going to say about cost savings in the public sector and note that I appreciate the need for that Surely, however, it should not be at the expense of the small local operator The procurement and tendering process has squeezed the lifeblood out of small operators in local areas The contracts they had for Government and State agency buildings were their lifeblood I refer also to caterers and suppliers to the HSE of foods, etc., stationery and office supplies to local authorities, and cleaning contractors to Garda stations and Government buildings All of those people are suffering and the life is being squeezed out of them by the big operators with whom they cannot hope to compete The big operators can buy all their supplies in bulk, reduce their costs and tender lower. In line with the regional dimension to the Action Plan for Jobs, our aim is to keep jobs and create them in regional areas. This is an area where we are killing jobs in the regions. They have no hope I have one man who employed 25 people He lost a contract to clean a Govern- ment building and had to let ten of his 25 staff go The Minister of State will probably say the new contractors will take people on, but they are taking them on at a different cost. They are paying them lower wages. I know for a fact that some people cleaning Government buildings - we are standing over this - are not paid bank holiday rates. Local contractors were available at short notice to the organisations and buildings involved and could come in if there was a flood or something else happened They were there on the spot to deal with these things While we are claiming to make savings in the public sector by doing this, it must be asked if this is true in the longer term given that people who are let go from their jobs must claim social welfare payments The revenue was circulating locally whereas the contractors doing jobs in the Kerry area, for example, who got the contracts through the tendering process are in Dublin Once again, the revenue will be circulating in Dublin inside the Red Cow roundabout I ask that we look at this and instead tender by region. We should keep the tendering process within the regions thereby maintaining regional jobs. I understand that we must make savings. I am not naive However, we should not squeeze the life out of the small operators in our local areas I await the Minister of State’s reply 06/05/2015B00800Minister of State at the Department of Finance (Deputy Simon Harris): I thank Sena- tor Marie Moloney for raising this matter It is timely to do so as we have put in place a new structure, the Office of Government Procurement, for which I have responsibility at ministerial level. While 2014 was the year of the establishment of the office, 2015 and 2016 will be about ensuring that we have the structures right and that we put as many measures as possible in place to help SMEs Any thoughts the Senator has in that regard - she has raised some today - will be given serious consideration. We may be able to consider that in a moment. 3 Seanad Éireann The main purpose of the EU public procurement regime is to open up the market and to en- sure the free movement of supplies, services and works within the EU having regard to Treaty of Rome principles including transparency, proportionality and equal treatment This is the rationale that shapes the detailed rules set out in the EU directives governing the regime It would be a breach of the EU rules for a public body to favour or discriminate against particular candidates on grounds such as nationality, geographic location or organisational size, and there are legal remedies which may be used against any public body infringing these rules The new model for procurement was approved by the Government in September 2012 and envisages common goods and services such as utilities, professional services and marketing, print and stationery being procured by a new central sourcing organisation, in this case the Of- fice of Government Procurement, with sectoral specific goods and services and minor works being sourced through the sectors health, education, local government and defence The aim of the reform is to deliver overall reductions in the cost of goods and services, better pro- curement services, introduction of technical standardisation, greater levels of professionalism among staff responsible for procurement and increased performance management of the central procurement function Taxpayers demand that Government secures value for money in all of its spend The frag- mented procurement arrangements across the public service have enabled suppliers to charge different public service bodies different prices for the same goods and services This is not sustainable as the State cannot afford to continue to purchase works, goods and services in a manner that undermines the level of services it can deliver Reforms are being carried out in a manner that recognises the clear importance of small and medium-sized enterprises in this country’s economic recovery We have to be transparent and equitable in our treatment of all suppliers. We spend approxi- mately €8 billion per year on public procurement, some €23 million per day If we are serious about economic recovery we need our SMEs to get involved and to have an equal chance in procuring and that is why I am not closing any doors in terms of measures we can put in place to help our SMEs. A couple of weeks ago there was a very useful Private Members’ debate in this House when I accepted an Opposition Bill on social clauses Nobody has a monopoly on good ideas and I am always eager to hear them The guidance to contracting authorities contained within circular 10/14, which we put in place to help SMEs participate and which was launched by my Department in April 2014, en- courages those bodies to break large contracts down into lots where reasonable to do so. This enables smaller businesses to compete for these smaller elements of a larger contract This has to be done in a way, however, that does not expose the State to undue risk or significant management overheads The OGP appreciates that, as it centralises more, there is always the risk that people feel crowded out. The OGP, therefore, is working with bodies like Enterprise Ireland and InterTrade Ireland to help educate suppliers around building consortia in order that smaller businesses may come together and win larger offerings that the State may put to the marketplace. Aggregation arrangements can be implemented in a manner that achieves value for money with a minimal impact on SMEs The greater use, where appropriate, of multi-supplier frame- works can address local supplier issues while also ensuring the ongoing cost competitiveness of the framework itself.