Irish Government tenders being awarded to overseas companies

T

thunders2000

Guest
Hi,

A colleague of mine mentioned to me that there was an article in the press lately talking about the high proportion of public sector tenders being awarded to overseas companies. He can't remember where he read it and I cannot find it online. Would love to see it if someone could give me a link.

It basically compares, on a country by country basis, the proportion of contracts awarded to overseas companies. Ireland it appears is sending more work overseas than others - by a factor of 4 I'm told.

This bothers me a lot because my company cannot pick up work overseas as it always goes to a local player. Here at home, we have lost 2 big contracts to foreign competition. 20 people laid off as a result. More may follow. All the manufacturing will be done abroad and the product then imported. In one contract we were 2% off on price and in the other we hadn't properly signed a declaration.

My cousin works in construction (architect). Incredibly, the same is happening there and there is no effort whatsoever in Irish Government bodies keeping work at home. Work is going to US and European companies. This in turn is giving the overseas competition a track record in Ireland and further contracts are going overseas while the Irish architects can only look on and eventually sign on.

When I hear all of this, I feel very sad - feel betrayed by my own people really. I don't know how to stop it happening, don't know why no one has brought it up in the Dail. Can't believe how Fine Gael haven't picked up on it.

We all have to pull our weight to get out of the mess we're in. Everyone in my company has taken substantial pay cuts, about 25% on average. I was never into the public private sector debate until this issue started needling me.
 
Surely these tenders should be awarded on the basis of price and quality rather than nationality? My understanding is that foreign companies are helping to bring projects such as motorway extensions in on budget and on time.

I'm sure the EU would have something to say about a member state discriminating against firms from other member states. We should also remember that these foreign companies do pay employment and corporate taxes here through branches or fully incorporated entities.
 
Pat,

I take your point but I am talking about tenders where the bulk of the work is done overseas by say UK manufacturers (or architects in the other case). There is zero corporation tax or employment tax paid here in these scenarios.

Flying the euro flag is great until you have to call 20 people into a room one by one and lay them off.

The motorways are done using PPPs which is a different form of procurement. While overseas firms win the work, they work closely with local construction companies I think and I'm ok with that. I think it is the NRA and the NTMA who manage the PPPs. Don't know much about them otherwise.

Thunders
 
Another sickening revelation about what is going on in this country that is wrong.
The systems in this country is where I see the major problems all round.
 
niceoneted said:
Another sickening revelation about what is going on in this country that is wrong.
The systems in this country is where I see the major problems all round.
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+1

Based on the OP's posts, there's no justification for awarding such tenders to non Irish companies. If the prices are broadly similar and one tendering company will create or preserve Irish jobs, then they should get the contract. We're a funny little nation really...gombeenism and cronyism are rife but when a little "common sense cronyism" is called for we can't even organise that. Banana republic indeed...
 
Pat Bateman said:
+1

Based on the OP's posts, there's no justification for awarding such tenders to non Irish companies. If the prices are broadly similar and one tendering company will create or preserve Irish jobs, then they should get the contract.
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As taxpayers, we should all hope that taxpayers money is spent in the most efficient manner possible.
Awarding contracts to foreign companies is the right thing to do if they offer better value.
There is no point in paying inflated prices to Irish companies, just to keep people in highly paid jobs, when foreign companies with lower paid jobs can do the work for less. This would be an inefficient use of taxpayers money.....
Irish Businesses in the private sector will always use foreign inputs if they are better value. This is basic economics. The public sector should do the same.
The Irish taxpayer have arguably been ripped off for a few things recently, we should be happy to see public funds being used efficiently, good value for money etc
 

Sad that the jobs were lost.
The sad fact is that the Irish staff were overpaid. Had they been paid less, the Irish company could have come in with a competitive tender, lower than the foreign company.

2% is not a lot, but better the Irish company were 2% less than the foreign company, then they would have won.
 
There is no point in paying inflated prices to Irish companies, just to keep people in highly paid jobs, when foreign companies with lower paid jobs can do the work for less.
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The problem we have here in Ireland is due to gross mismanagement of the economy over the last 10-15 years, most things are just too expensive.
The cost of doing business in Ireland is just too high. Businesses can't compete, so the government awards tenders to foreign firms.

It is a terrible problem. You can't pay people low wages because they won't be able to afford their rent or mortgage. Businesses are in a similar situation with high rents and bills. Ireland has been strangled by high wages.

Just wait until yet more money is taken out and taxes increased in the next budget...
 

I said "If the prices are broadly similar and one tendering company will create or preserve Irish jobs, then they should get the contract". The OP clarified that he/she is referring to contracts with foreign companies where there is no "payback" to the Exchequer in relation to the contracts (e.g. corporate taxes, income taxes or VAT). In the case of such contracts, the Government should clearly try and award the contract to the Irish company (assuming the price differential isn't ridiculous).

Ethics should also be considered. One would hope that this wouldn't be as relevant when dealing with EU countries or companies. However, I'd strongly disagree with the Government or its agencies procuring goods and services purely on the basis of price from countries or companies where workers are downtrodden. For example, I'm sure the building firms which used Turkish workers disgracefully some years back could lash up a wall for half the price of their Irish counterparts. However, under no circumstances should the Irish state be dealing which such entities.
 
Under EU Law, all companies in the EU are allowed to tender for all Government contracts throughout the EU. And all must be treated equally in procurement competitions.

This law benefits Irish companies more than it benefits overseas companies. The market for Irish companies is 27 countries rather than 1 small country. Many Irish companies have won large contracts in other EU countries.

I think there is an element of sour grapes among a minority uncompetitive Irish companies. They expect our Government to waste money on them just because they are Irish. The seem to think they have a 'right' to enrich themselves with Irish taxpayers hard earned cash. The simple facts are that if you are good enough, you'll win your fair share of contracts in both Ireland and elsewhere in the EU.

In addition, some Irish companies cant see beyond their own borders. They only tender for Irish business. Tender rules across the EU are identical, so it doesnt take any more effort or knowledge to tender in another country as it does in Ireland. They need to open their eyes to the huge market out there.
 
+1 csirl.

It's an open system and above a certain size all tenders are open across the EU. The state cannot give preferential treatment to Irish companies even when they may wish to.

I'd agree that the subsequent tax take from materials and work generated here would possible equal out and maybe even exceed any difference in pricing, but the state isn't allowed to build that into a decision.

And as csirl it does work both ways, I've won UK tenders for work over UK companies on the basis of cost.
 
csirl said:
This law benefits Irish companies more than it benefits overseas companies. The market for Irish companies is 27 countries rather than 1 small country. Many Irish companies have won large contracts in other EU countries.
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I totally disagree with csirl. I think the OP's point is that Ireland is giving away more than it is receiving. This is consistent with my own observations of how some of the public sector operates. A rash reaction of mine would be that it will ultimately bite them in the behind when another round of paycuts comes. Unfortunately, with our economic position, it's a lot more serious than that. Many are not seeing it, head in the sand approach - a bit like the property bubble a few years ago - complete denial.
 
CSGirl makes good reading and ignore at your peril. The green card is not as powerful as it used to be. People are more accountable these days (except for the chosen few, of course) and generally value-for-money is what it is all about.

No longer have Irish companies the god-given right for easy little earners.
 
I've got staff working on a contract for another EU govt at the minute. I'd have had to lay them off if that country had adopted a "me first" approach. Swings and roundabouts. Protectionism doesn't work in the long run
 

+1. One of the few accurate, and well thought out responses in this thread. Under EU procurement law we cannot favour Irish companies as much as other countries cannot favour their companies.
 
There's a interesting blog here about the IADT tender award:

[broken link removed]

Main issues: IADT is state funded. They train new designers. They packaged their e-tender in a way that made it available across europe. It went to Denmark, the final design produced is embarrassing for a design college.
 
I don't have a problem with govt contracts going to non Irish suppliers, what i do have a problem with is where the tendering process doesn't take place at all and the same contracts are awarded to the same suppliers.
 
censuspro said:
I don't have a problem with govt contracts going to non Irish suppliers, what i do have a problem with is where the tendering process doesn't take place at all and the same contracts are awarded to the same suppliers.
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Contracts cant be awarded without a tender - its illegal. So you should complain if you come across this.
 
csirl said:
Contracts cant be awarded without a tender - its illegal. So you should complain if you come across this.
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Well arthur cox solicitors was awarded a govt contract re the bank guarantee without a tendering process.

You'll also find that alot of contracts are awarded with a supplier already in mind making the tendering process a forgone conclusion.
 
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