Government Contracts (Hansard, 29 November 1990)

§ Mr. Leigh

The Government contracts preference schemes, which apply in the development areas of Great Britain, and in Northern Ireland, have been little used in recent years. The schemes were introduced in the 1930s, and aim to give opportunities to businesses in those areas to secure public sector contracts if their bids are competitive. In Northern Ireland, though not in Great Britain, a price preference of 5 per cent. has been allowable for goods manufactured in the Province.

In the development of a more open framework of public sector procurement rules within the Community, and in the broader approach to the single market, the Government agree with the EC Commission and other member states that it is inappropriate for public sector procurement contracts to be reserved for businesses in particular areas, even the very limited provisions of the United Kingdom's schemes.

The Government have therefore decided that the contract preference schemes are to be terminated. Applications from businesses to be recorded as eligible under the schemes will not be accepted after close of business on 31 December 1990.

This arrangement provides a short period of notice of termination, and is intended to minimise the effect on businesses which may have prepared, or are preparing, bids and tenders in the expectation that the schemes would be in place. It means that for prospective contracts and invitations first issued by the schemes' participating purchasing organisations on or before 31 December 1990, eligible applicants may continue to use the scheme up to the stage of tender and final contract even when the contract-placing timetables go beyond that date. However, the schemes will not apply in any respect for new prospective contracts or invitations to tender issued after 31 December 1990.

Help for businesses to effectively compete for public procurement contracts is now being offered in a number of ways under European and national programmes. The EC Commission's initiative to help businesses in objective 1 regions prepare for the single market—PRISMA—will be available in Northern Ireland. The Commission is also examining the potential to use existing initiatives more effectively, such as the Euro info centre and business 465W co-operation networks, and the tenders electronic daily system, as a means of disseminating information on public procurement contracts to smaller companies.

My Department's single market campaign stresses the importance of the European public procurement market and a "Guide to Public Procurement" booklet is being issued widely. Enterprise initiative consultancy support in marketing and other business disciplines will help improve the competitiveness of firms bidding for public contracts, and more widely. Our "Managing into the 90s" programme is also promoting good purchasing practice. In addition, regional and local government development agencies, chambers of commerce and other private sector bodies are increasingly encouraging their member businesses to pay close attention to the opportunities of the public procurement market.