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Too tough to tender

Too Tough to Tender

11th December 2014

ISME totally backs the High Court challenge by several small businesses to the conditions of public works contract applications. When it comes to helping small indigenous businesses this country’s administration specialises in taking one step forward followed by at least two more backwards.

The toughest little country for small enterprises

You can see our open letters to the Taoiseach about what his government is doing to ensure that Ireland is the toughest little country for small enterprises to do business. And the High Court case points to yet another shotgun blast straight through the government’s own foot.
The case is against the Commissioners of Public Works, that operates the National Procurement Service. It’s being taken by 10 small or “micro” businesses who have for years supplied State bodies, including schools, local authorities, the HSE and the Garda Síochána with printers and other devices like ink cartridges. This Magnificent 10 wanted to tender for the business but the State has made this impossible. State tendering should be encouraged as much as possible. It’s good for businesses and it’s good for the State to have a lot of competition that drives down the price of goods and services.

Small potatoes

However, the tender application complained of in the High Court specified a condition that the businesses needed a minimum annual turnover of €2 million. For the many business commentators who have never run a business, that level of turnover is no small potatoes for an early stage company and in this case the businesses argue that they were shut out of the tendering process. Why? And by whom? In legalese the companies bringing the action say that the new regulations are disproportionate, discriminatory and prevent and distort competition in the Irish market. We would add that it’s also infuriating and anti-enterprise.

Turnover is vanity, profit is sanity

ISME has previously seen PR tenders that needed liability insurance levels of €12m. Was the tenderer thinking a press release might fall from the sky and hurt someone? We have seen other tenders that confused turnover with profitability. For the record, those of you who set tenders, a company could have a turnover of €10 million but be technically bust while a company with a turnover of €100,000 could be making a profit of €50,000 a year. Clearly some people who set tenders have no idea at all about a business.

We’re just looking for a small stroke

Taoiseach, here’s another little mess that you could sort out on a stroke of your pen – or are you too busy placating the small handful that gridlocked Dublin yesterday costing city centre retailers an estimated €5 million?