Procurement reform -- Ireland

Lenihan reforms rules for public contracts

The government has introduced sweeping changes for public bodies and state agencies agreeing work and service contracts with private companies, following a probe of its procurement operations.

A range of reforms to public procurement rules are outlined in a circular, seen by The Sunday Business Post, which was issued by the Minister for Finance, Brian Lenihan, to all departments on August 13.

A range of measures is required to ensure that firms are not hindered in competing for government contracts, which are worth €15 billion, and are a major source of income for small and medium enterprises (SMEs).

Ireland awards 17.7 per cent of all government contracts to non-domestic companies while the EU average is just 1.49 per cent. SMEs have lobbied for government contracts to be unbundled into smaller contracts to allow more Irish companies compete.

These include a prohibition on public bodies entering into special arrangements that require SMEs to pay to access competition for public contracts.

The threshold for supplies and general services contracts on the government’s public procurement website www.etenders.ie has been halved from €50,000 to €25,000.

All advertised contracts up to €250,000 for works and €120,000 for supplies and general services must now be open to all potential tenderers without a prequalification process.

Evidence such as bank statements, audited accounts, and proof of professional indemnity will now be sought only when a tenderer is close to being awarded a contract.

The guidelines outline measures which include "dividing contracts into smaller lots where feasible".