Foreign firms win 25% of state contracts

ALMOST one quarter of public contracts relating to supplies were awarded to non-Irish companies in 2008.

Statistics provided by the National Public Procurement Policy Unit in the Department of Finance show that two years ago 21% of supplies contracts put on the e-tenders website were ultimately awarded to companies outside the state.

Overall, €568 million worth of contracts were awarded in 2008 to non-Irish companies – 12% of all public contracts.

The quantity of tenders for services awarded to non-Irish companies stood at 15% in 2008, while just 3% of works contracts went to companies outside the state.

Despite government pleas to support Irish businesses – summed up in Finance Minister’s Brian Lenihan’s appeal for shoppers to do their “patriotic duty” and not spend money north of the border – many contracts have been awarded to suppliers outside the state, mostly in the North, in recent years.

In one such case last year, the Irish Farmers’ Association (IFA) described the sourcing of chicken for the Defence Forces from a non-Bord Bia Assured processor outside the state as “a national disgrace”.

The Defence Forces confirmed that the poultry contract, worth €350,000, went to Crossgar Foods in Seaforde, Co Down because it was the cheapest.

The award of the contract to the Northern-based company prompted poultry farmers to hold a protest outside the departmental offices of then Defence Minister Willie O’Dea.

In 2008, some €354.5m worth of services contracts went outside the state, in addition to €160m worth of supplies contracts and €53.7m worth of works contracts.

The figures were compiled from returns supplied by contracting authorities, such as government departments, local authorities and other state bodies.

Ireland is obliged under EU law to open its procurement process to companies outside the state, and a spokesperson for the Department of Finance said the contract awards were neither isolationist nor were they ignoring Irish businesses.

“Contracts below the EU threshold represent over 70% of total public procurement in Ireland,” the spokesperson said.

“Most of these contracts are advertised nationally on the e-tenders website. While a breakdown of these contracts is not available the clear indication is that a higher percentage of these contracts are awarded to Irish suppliers.”