New Rules for Public Procurement:

New regulations  for Contracting Authorities to facilitate the participation of SME’s in Public Procurement

The efforts of the Print & Packaging Forum to bring reform to public procurement practices in Ireland have finally paid off. For years I have lobbied for a Public Procurement system that would level the playing field for Irish SME’s  within EU Procurement regulations. I identified procurement procedures that were legal and transparent and requested the Government to implement recommendations which would help the participation of SME’s in public procurement and bring some stability to the Irish Printing Industry.

The Cabinet Committee on Transforming the Public Service  recently considered the issues facing SME’s in the public procurement market. The new guidelines have been approved by the Minister for Finance and reflect the Print & Packaging Forums requirements. The Minister has also highlighted practices that contracting authorities must avoid as they can unjustifiably hinder small businesses in competing for public contracts.

Summary of the new regulations for Contracting Authorities:

• Contracting Authorities are to use the “ Open” tendering procedures for  all contracts for supplies and services up to €125,000 in value and for advertised contracts for works and related services up to €250,000. Beyond these levels the contracting authority may decide which tendering process is most appropriate.
• Contracting authorities should avail of the possibility to award contract in “lots” where this can be done without comprising efficiency and value for money.
• Contracting authorities are not to use arrangements that involve potential tenderers having to pay so as to access opportunities to compete for public contracts. ( No more “Hello” money)
• Contracting Authorities must ensure that any capacity levels they set for tenders are relevant and proportionate to the circumstances of the particular contract.
• Contracting Authorities should allow applicants to self declare their capacity to undertake the contract and should seek verification or evidence of such capacity only in the event of the tenderer being short-listed or coming under consideration for the award of the contract. Documentary evidence such as Bank Statements, Audited Accounts and Professional Indemnity need only be produced when a tenderer has been short listed.
• Contracting authorities should be flexible in accepting alternative means of verification of capacity if suppliers are having difficulties in providing one kind of evidence sought.
• Contracting Authorities may only set insurance requirements that are relevant and proportionate to the circumstances of the contract, should require tenderers only to declare that they can obtain the cover, and should only seek evidence of the cover in place from the winning tenderer to allow for the award of the contract..
• Contracting Authorities should provide constructive de-briefing for unsuccessful tenderers.
• Contracting Authorities may only short – list on an objective and non – discriminatory basis.
• Contracting Authorities should ensure that Framework Agreements facilitate the inclusion of smaller businesses where these could meet requirements or compete for particular lots.
• Contracting Authorities should encourage joint bidding among SME’s and sub-contracting in the case of larger contracts. They should be aware of the potential of SME’s as suppliers of innovative solutions and in contributing to eco-innovation (green procurement)
• Contracting Authorities should describe their requirements in functional terms where appropriate ( “ask for a solution, do not prescribe it”)
• Contracting Authorities should use the online Tax Clearance system through the Revenue Commissioners website www.revenue.ie
• Contracting Authorities should use simple, and where possible, standard documentation to assist suppliers, have better structured tendering, and “de-mistify” the public procurement process.
• Contracting Authorities are to advertise all contracts for supplies and services with an estimated value of €25000 upwards on www.etenders.gov.ie (etenders)

Irish Sme’s charged ‘Hello’ money:

While Government Ministers and Irish officials argue that we must comply with EU procurement regulations and engage in open competition, Irish SME’s are required to pay  ‘Hello’ money to get access to Commercial State Contracts. There is clear evidence that Semi State Organisations are using a private company to filter potential suppliers as part of a pre tender selection process. Irish SME’s are required to pay registration fees to this firm if they are to be considered for selection as a supplier to Commercial State contracts. Companies that fail to register are excluded from the tender and denied access to these contracts. This requirement is a barrier to entry, its anti competitive and at variance with Government policy. Government Ministers and Irish Officials are aware that Irish SME’s are being charged ‘Hello Money’ and have done nothing to stop it.

Bye Bye Irish – Irish Procurement Policy puts European manufacturers first.

EU Statistics prove that Ireland awards twelve times more contracts to foreign suppliers then the European average.  Irish officials attempt to justify this imbalance by declaring that we are fully compliant with EU regulations. This suggests that the rest of Europe is out of step with Ireland and that they are collectively in breach of EU guidelines.

The following statistics  proves the point that the Print & Packaging Forum has been advocating for years.

Percentage of Contracts awarded to firms domiciled in another country:

EU Average 1.49%

France 0.72%

Spain 0.86%

Poland 0.95%

Italy 1.35%

UK 1.55%

Sweden 2.22%

Czech 2.39%

Netherlands 2.75%

Denmark 3.18%

Belgium 4.26%

Portugal 4.4%

Austria 4,84%

Cyprus 7.31%

Ireland 17. 70%

Source: Niall Bohan, Head of Unit EU Internal Markets.

Oral Presentation to Fianna Fáil

For some time now, the Print & Packaging Forum has been lobbying government to change policies which would have an immediate beneficial impact on the sector. With this in mind, the Forum recently made a presentation to the Fianna Fáil Parliamentary Party.

The Forum is putting considerable pressure on all political parties for the formation of a Printing Industry Task force and   significant progress has been made in this regard.

The following is a transcript of that presentation:

See your logo feature in a print industry awareness campaign!

Following on from the recent Red Cow meeting, the Print & Packaging Forum is embarking on a print industry awareness campaign. Your logo will appear in a direct marketing poster campaign highlighting the importance of our industry to the economy and illustrating the number of companies that make up our sector. This poster will contain the corporate identity of every printing company supporting this industry awareness campaign. For your company to feature, we need you to send us your logo artwork now. The message will be a plea to save jobs, save the printing industry and to Print Irish. The target market will be the Government, public bodies and State Agencies. Be part of something big for the sector. Unite as one…. one voice and one message. Send your logo now!

Accepted Files:

Hi-Res PDFs, JPEGs and TIFs as well as Adobe Illustrator files

Cost

Absolutely nothing. This initiative is funded by the Print Irish campaign.

Summary of Print Industry Meeting

Summary of Print Industry Meeting
20th April 2010 – Red Cow Hotel, Dublin.

The above meeting was held under the auspices of the Print & Packaging Forum on the 20th April and nearly 100 people representing Printing Firms from all over the country were in attendance.

The Aim of the meeting was to commence a process which would achieve the following.

• Unite the Industry.
• Prevent mixed messages at a time when cooperation and clarity are essential.  One Purpose – One Message.
• Formulate a Campaign which would influence the Government to intervene and assist the Industry in devising a  strategy which will safeguard the future of the sector.

Agreed Action Points

• The ‘Forum’ will continue to Lobby Government and Influential Bodies on behalf of the Printing Industry.
• Commence research which will capture essential data to reflect the current state of the Industry.
• Benchmark our Industry against Foreign competitors.
• Explore options to reduce capacity in the Industry
• A Print & Packaging Industry Awareness Campaign will include:

1. A Poster Campaign to promote the Industry.
2. A Book, which will be comprised of Individual Stories, will outline key challenges facing the sector and chronicle how companies are striving the survive current difficulties.
3. High profile Book Launch to capture the attention of the Policy Makers and the general public.
4. Promote the Print Irish Brand.
5. Industry Delegation to meet with Government.
6. Steering Committee to drive the above.
7. The above campaign will be funded by the Print Irish Fund (circa €10k )

Action since meeting on the 20th April

• I have had numerous meetings with senior executatives from the Revenue Commissioners to help close off the VAT loopholes which have disadvantaged our sector.
• I have made a detailed presentation to the Minister for Labour and requested Government Intervention to assist our Sector. He has requested that I forward a submission which will go to Cabinet.

Items on this submission will include:

1. Public Procurement
2. VAT
3. Industry Scrappage Scheme (including a request that state agencies purchase second hand printing equipment from Irish Printing Firms when they are changing machinery in order to remove capacity from the market).
4. A change to Enterprise Ireland Mandate to include support for companies involved in Indirect Exports and Import Substitution
5. Upskilling Training Initiative for the unemployed in the printing industry under an RPL Scheme.

• I have also had discussions with Minister of State Pat Carey in this regard.
• Copy Writers for the proposed book will be appointed shortly.
• Research on the Print & Packaging Industry will commence before that end of May.

A meeting of the steering committee will be held in the coming week in connection with the above.

Clarification of VAT Regulations.

For some time I have been seeking an official statement clarifying the circumstances in which the State, Local Authorities and bodies covered by Public Law should account for VAT. The organisations covered by the following clarification include Government Departments, State Sponsored Bodies, An Garda Siochana, the Defence Forces, the Health Service Executive, Public Hospitals, Enterprise Boards, Local Authorities and Educational Establishments ( Universities, Institutes of Technology,Schools,and VEC’s) .

The following clarification has been issued by Mr Vincent Campbell Director National Procurement Service.

” Procurement and the treatment of Value Added Tax (VAT) The National Procurement Service (NPS) has recently had a number of queries relating to the application of VAT and offers the following guidelines. In all instances tenders must be required to submit prices exclusive of VAT. In all instances tenders must be assessed on the basis of prices exclusive of VAT.

In general, this means that either, 1. The supplier in his/her Member State charges their VAT rate, or 2. The customer /recipient self-accounts for Irish VAT.”

The above information should be read in conjunction with the following: General Procurement Guideline – Competitive Process and Revenue Value-Added Tax Information Leaflets, entitled ” State Procurement ” and ”Place of Supply for Services” which are available on the Revenue website at www.revenue.ie

Employment Subsidy Scheme

With effect from 8^th December 2009 the Government has extended the Employment Subsidy Scheme to exporting and non-exporting companies from all sectors of the economy that employ more than 10 employees. The Employment Subsidy Scheme is designed to support the maintenance of vulnerable jobs and prevent people from being made redundant. 

The scheme will provide two bands of subsidy. Under the first band employees must work an average of 35 hours or more per week for which you could receive a subsidy of €9,100 paid over a twelve month period for each subsidised job. Under the second band employees must work an average of 21 or more hours per week but less than 35 hours a week for which you could receive €6,370 over a twelve month period for each subsidised job. 

Applications must be made online and you are advised to register immediately. Email Address ess@enterprise-ireland.com 

The deadline for applications is 23^rd December 2009.

The GAA: Not a supporter of the Irish Printing Industry

My understanding was that the GAA was founded to support and promote all things Irish. 

It is therefore rather disappointing to discover that the book to celebrate its 125^th anniversary  (The GAA – A Peoples History) was printed in Italy. It is also disappointing that it’s annual book of photographs, A Season of Sunday’s, was also printed in Italy.

Against this backdrop I conducted a survey of 40 books about the GAA, which are currently available in the bookshops. The following are my findings.

Only  5 of the books were printed in Ireland while a staggering 22 different titles were printed in the UK. Of the balance 3 were printed  in Italy, 3 in Spain, 3 in Malta, 1 in Denmark, while a further 3 books have an EU imprint on them.

In my opinion the combined value of the contract to print all of the above publications is in the excess of €600k.

In addition to the significant number of imported GAA Books the organisation annually prints it’s 1.7 million Match Tickets for Croke Park at Weldon, Williams and Lick in the USA. 

All of the above contracts could have been produced in Ireland by the tax payers who have made such considerable contributions to the development of the Stadium at Croke Park. 

Given that a significant number of rank and file members and supporters of the GAA are unemployed printers it is my intention to highlight this matter where appropriate.

VAT – Authorities respond to our call for action

Following meetings I have had with the Revenue Commissioners and the Dept of Finance, I am satisfied that the authorities will respond to our Industries demands for tighter tax controls on Vat exempt organisations.

They have accepted that our Industry has been disadvantaged as a result of their failure to enforce Vat regulations. These regulations clearly stipulate that VAT Exempt bodies must Self Declare and pay Irish VAT rates on all imported products. Failure to do so is a breach of the VAT regulations and constitutes serious tax evasion. The Authorities will be in contact with all VAT Exempt organisations in the coming weeks and they will clarify the rules and ensure that there is no ambiguity in this regard. As a direct consequence the VAT loophole will be closed and our Industry will be treated equitably. It is essential that we police this matter closely and highlight questionably purchasing practices.

I hope to be able to convince the Authorities to alter the method of evaluating tenders and introduce a position where all future quotations are supplied Exclusive of VAT. Since Vat can never be used as a differentiator this issue should never arise and any questions relating to the payment of VAT are highly inappropriate.