Small businesses in test case to prove tendering system unfair

A challenge by several small businesses to proposed changes to the conditions of public works contract applications has opened before the High Court. The businesses' concerns include a condition requiring tenderers to have a minimum annual turnover of €2 million.

The action, regarded as a test case, is by 10 small or “micro” businesses who have for years supplied State bodies, including schools, local authorities, the HSE and the Garda with printers and associated devices such as ink cartridges.

Their case is against the Commissioners of Public Works, who operate the National Procurement Service.

The action arises from criteria included in a March 2013 Framework Agreement for the supply of printers and associated devices to State entities via contracts worth an estimated €25 million over two years.

Criteria

The businesses argue the proposed minimum qualification criteria will disqualify them.

Under the new criteria, tenderers must display certain “economic and financial standing” or a minimum annual turnover of €2 million. They are also required to fulfil certain technical and professional abilities.

The companies say, because they are small businesses, many will be unable to meet these requirement although they have been supplying products to the State for some time.

They contend the new regulations are disproportionate, discriminatory and prevent and distort competition in the Irish market.

EU directive

The commissioners deny the claims and argue the qualification criteria are necessary to ensure contracts will be fulfilled. The changes to the regulations were brought in line with a EU directive providing for better competition within the Union and have been introduced to save the State money, it is claimed.

The case before Mr Justice Paul McDermott is expected to last for several weeks.