Presentation
Procurement and Information and Communications Technologies in the Irish Economy

Mr. Declan Hughes
Department Manager, Enterprise & Trade Policy Division, Forfas, Ireland

Ireland has gone through a transformation over the last few years, and in respect to public procurement, membership of the EU has had a large impact. The EU Directives have provided a framework for procurement in Ireland.

FDI procurement has been critical to SME development and add-on investments in Ireland, and it is very important for SMEs to export straight away. The presence of a sophisticated market, including government procurement is also a part of this process. In the 1970's, Ireland developed dedicated linkages to develop opportunities for small businesses, which were supplemented in 1971 with the founding of the Institute of Purchasing Managers. These moves helped to spur the creation of new sub-supply companies.

E-procurement represents a further evolution of procurement in Ireland, which hosts 300 major electronic companies in the country, now a leader in software localization and production. At current levels, 45% of SMEs are using the Internet for purchasing. E-procurement is one area which Ireland is seeking to develop in the future, with the establishment of portals, exchanges and marketplaces.

Public sector procurement is currently valued at over 6 billion euros, and the public sector is the largest procurer in the economy. The overall objective in government procurement is to get value for money for the Irish taxpayer. Overall, imports account for 40% of total procurement, whereas local authorities only import about 17% of their procurement needs, although efforts are underway to bundle procurement in order to attract foreign contractors to local authority projects. Under the National Development Plan 2000-2006, local government procurement has been budgeted at 20 billion euros.

E-delivery in the public sector has a three pronged approach:

• Information dissemination on websites;
• Construction of intranets; and
• Provision of interactive services.

It is also recognized that ICTs can enable a radical change in public administration, although coordination among the more than 200 departments and agencies is a large task.

The overall objective in the rollout of e-procurement in Ireland is to enhance transparency, competition and best practice. The government recognizes the need for "best-in-class" procurement practices. A multi-disciplinary review is also under way. The local government system is also responsible for the delivery of 20 billion euros of public works projects from 2000-2006. In order to ensure that this procurement is implemented effectively, an e-procurement portal is to be launched in March 2001: the first time that all public sector tenders are brought together in one place. It is hoped that the e-procurement portal will increase the attractiveness to international contractors of Irish procurement, and an extensive promotion of the portal is planned. E-procurement is expected to have a positive impact on the enterprise sector and public administration.