The tender for the public procurement of computer systems, which was recently issued by the government, is in clear breach of European Commission directives on the reform of public procurement rules, said Vince Farrugia, director general of the Malta Chamber of Small and Medium Enterprises (GRTU) yesterday.

The Investment, Industry and Information Technology Ministry, however, reacted to this, saying it had already explained, in numerous instances, all the aspects of the procurement process.

The ministry said GRTU persists in refusing to acknowledge the facts that have been duly, publicly and repeatedly explained by the ministry and keeps trying to reiterate selective interpretations which fit only the point of view of a part of its membership.

Mr Farrugia was speaking at a media conference during which GRTU representatives explained why they were objecting so strongly to the government’s decision to change all of its 15,000 computer units and rent new systems.

In a letter sent to Prime Minister Lawrence Gonzi yesterday, GRTU president Paul Abela said that the European Commission had highlighted the need for the reform of procedures and practices used in a number of public tenders that effectively disadvantaged small and medium enterprises (SMEs).

“Your government has committed itself to remove any such disadvantages. The issue GRTU is raising refers primarily to our objection that such an important tender flagrantly discriminates against small businesses. Indeed it is specifically designed to exclude small businesses,” Mr Abela said in the letter.

In the letter, Mr Abela expressed regret that Industry and Information Technology Minister Austin Gatt, as well as the MITTS board of directors, informed GRTU that they could not meet their information and communication technology (ICT) trade sector committee to discuss the matter, since the call for tenders had already been issued.

The GRTU is urging the government to withdraw the call and reissue it after it would have been revised in such a way that all disadvantages to small enterprises were removed.

GRTU is calling on the Prime Minister to meet them formally, because they said it was his responsibility as head of government, to ensure that the government’s commitment to SMEs was coherent in all government action, particularly in public procurement.

The government is “obliged not to hinder SMEs in their ability to compete for public tenders”, Mr Abela said in his letter, adding that all the recommendations received from GRTU’s counterparts, EuroCommerce and the European Association of Craft, Small and Medium-sized Enterprises (UEAPME), further convince them that the computer systems tender issued by the government is in direct conflict with GRTU’s main stand on SMEs.

Speaking at yesterday’s media conference, the GRTU director general explained that most of the requirements specified in the tender are “out of reach” for many SMEs.

Mr Farrugia said that European Commissioner for Enterprise and Industry, Günter Verheugen and German Chancellor Angela Merkel, were among those who have been insisting that SMEs strengthen the economy and help generate jobs, so they should be provided with practical assistance and further facilitation.

Moreover, Malta’s economy was undoubtedly dependent in no small part on the contribution of small businesses, said Mr Farrugia.

He said the government only appeared to be interested in large projects like SmartCity and it was not giving importance to the voice of small businesses.

“We want a level playing field and fair competition. Why is the government in such a rush to award this tender? And why does the Prime Minister not want to meet us to discuss the matter as we have done with other issues? The government must have definitely discussed this matter with some other entity, considering the proportions of the public procurement involved” said Mr Farrugia.

He publicly thanked Opposition Leader Alfred Sant and Labour’s main spokesperson for foreign affairs and IT, Leo Brincat, for listening to their concerns and for committing themselves that should the Labour Party be elected to government, it would definitely revise the tender.

The director general said that unless the government withdraws the tender, GRTU would have to call on the MLP to present a motion in Parliament with regard to the matter.

“We want MPs to stand up and be counted. We want to see who of them is against the growth of SMEs and then we would then have to reveal the names of those who voted against,” he said, stopping short of going to the specifics of the motion before any further development takes place.

In a statement issued yesterday evening, the Investment, Industry and IT Ministry said that in order to avoid further doubts and misinterpretations, the ministry was repeating the facts, which hopefully this time round shall be acknowledged by the GRTU.

The statement said that the tender does not block SMEs, but it contributes towards their growth and participation in the IT landscape.

Giving a definition of an SME from The new SME definition: User guide and model declaration, the ministry said it is: “an enterprise which employs less than 250 employees and has an annual turnover of less than EUR50 million.”

The ministry said it was informed that all the prospective bidders who have attended the briefing session are local companies and fall within the definition of an SME.

Moreover, the tender stipulates that the successful candidates would be required to set up a local service company, a requirement which definitely does not discriminate against the local bidders, said the ministry.

In reply to the GRTU’s stand with regard to the social aspect of the issue, the ministry said it could not deny the fact that there are certain people who cannot afford to purchase computer equipment and are therefore barred to the wrong side of the digital divide.

In reality, the GRTU should acknowledge that the measures allow for more owners of computer systems, some of whom would probably not own a computer otherwise.

Moreover, this will also mean that IT retailers and service providers will have new potential customers for auxiliary products and customers of their services which they supply and which they would not otherwise have, said the ministry.

The ministry also published an exchange between Minister Gatt and the GRTU president, clearly indicating the continuous offer for the necessary explanation by the minister to the GRTU administration, but not to interested tenderers, since this would be tantamount to unfair advantage and a breach of standing procurement regulations.

The ministry said the GRTU administration chose to adopt a stance through which it is merely trying to cloud facts with half-truths and misconceptions.

Earlier yesterday, the ministry issued a statement in which it claimed that the MLP had now revealed the real reason why it was not in favour of investing in new computers in schools, government offices and in a scheme by means of which computer units would be provided to people with disabilities, needy families and non-governmental organisations.

According to the ministry, Labour’s main spokesperson for foreign affairs and IT, Leo Brincat, referred to the computer systems tender as “vitiated” and now that the country is in electoral mode, the government should not take measures to continue strengthening the local information society.

The ministry called on Mr Brincat to substantiate his argument about the “vitiated tender”, because such allegations only reflect a lack of seriousness.

The GRTU’s stand with regard to the social aspect of the issue is that while needy families and people with disabilities should have accessibility to the information society as much as everyone else, such people should not be provided with sub-standard, or repaired systems.

If the government wants to give these individuals special prices, it should first remove VAT and the eco-contribution on new computer systems when sold to deserving members of society, according to Marcel Mizzi, secretary of GRTU’s information and communication technology (ICT) trade sector committee.

“We hope the minister is aware that nowadays computer systems are usually replaced and not upgraded, due to the ever-changing hardware,” said Mr Mizzi, adding that the tender makes it quite clear that the government is after branded systems rather than locally-assembled systems.

Meanwhile, in reply to the ministry’s statement, Mr Brincat said that Minister Austin Gatt failed to give clear, categorical replies to his (Mr Brincat’s) questions regarding the IT systems tender.

As a result, Mr Brincat said that the Labour Party could not make a decent and objective evaluation of the level of transparency and financial and economic effects of the IT systems tender, which was going to cost the country millions of liri just a few months before a general election, even if it would bind the new government for the next five years.

He said that should the MLP be elected to government, it was not ready to have to endure something similar to the bitter experience it was faced with due to wrong decisions taken with regard to the procurement of Gozo Channel ships on the eve of the 1996 general elections.

Mr Brincat said the MLP was committed to revise the tender should it be elected to government. He said Dr Gatt was behaving like a “know-it-all”, but his attitude, like the PN’s, was mistaken. The Nationalist Party seems to believe and give the impression that it has “some divine gift to govern the country forever,” concluded Mr Brincat.