Construction Contracts: SMEs

Oral Answers to Questions — Finance and Personnel – in the Northern Ireland Assembly at 2:15 pm on 16th November 2015.

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Photo of Maeve McLaughlin Maeve McLaughlin Sinn Féin 2:15 pm, 16th November 2015

9. Ms Maeve McLaughlin asked the Minister of Finance and Personnel to outline the work her Department has undertaken to ensure that small and medium-sized enterprises have a competitive chance of bidding for tendered construction contracts. (AQO 9077/11-16)

Photo of Arlene Foster Arlene Foster DUP

My Department introduced new public contracts regulations in February 2015. These are intended to facilitate the participation of small and medium-sized businesses by, for example, limiting turnover requirements to twice the contract value. The Central Procurement Directorate (CPD) has also worked with the construction industry to simplify the pre-qualification process and reduce the effort needed to tender. SMEs are now winning around 85% of construction contracts. CPD has also published guidance to help SMEs benefit from subcontracting opportunities.

Photo of Maeve McLaughlin Maeve McLaughlin Sinn Féin

Go raibh maith agat. I thank the Minister for her answer. Specifically on procurement and tendering, is the Minister minded to look at the Public Services (Social Value) Act 2012 in England?

Photo of Arlene Foster Arlene Foster DUP

Actually I held a procurement board meeting last week, and that was the subject of the discussion. I received a very helpful report from a group of people, including the Strategic Investment Board, who have been running social contract pilots. One of the queries was whether we go down the route of legislation or of guidance. That discussion has really just begun. I have asked for an Executive memorandum to go round colleagues asking what they feel is the best way forward on the issue. The procurement board is looking at this issue at present.

Photo of Karen McKevitt Karen McKevitt Social Democratic and Labour Party

What has been done to remove prohibitive criteria that prevent companies winning tenders for the first time?

Photo of Arlene Foster Arlene Foster DUP

CPD has introduced a range of measures to increase opportunities for small and medium-sized companies, including those dipping their toes into the market for the first time. A single web-based procurement portal, eTendersNI, has been introduced. It shows all the public-sector procurement opportunities that are available and alerts firms to tender opportunities in which they may be interested. It also allows them to store their profile information for use when completing further tenders.

Breaking larger contracts into lots is a very important method of allowing small and medium-sized businesses to come forward on their own behalf. For a while it seemed that the only way that you could obtain a government contract was if you were part of a big partnership that went forward together. However, we are now breaking larger contracts into lots to allow SMEs to come forward on their own behalf.

As I said, we are making sure that the turnover requirements are only twice the contract value. Again, that was a big challenge for a lot of small and medium-sized businesses. Indeed, I came across it in my constituency. Setting proportionate minimum standards for experience and financial standing is also important. In the past, standards were, quite rightly, being asked for, but when we looked at them we did not think that they were proportionate to the size of the contract. We have tried to increase the opportunities for small and medium-sized businesses in a range of ways. It is something that I feel very strongly about and take a particular interest in, having come from the Department of Enterprise, Trade and Investment.