Domestic businesses missed out on almost €3.5 billion worth of business in the €12 billion government tender market in 2013, as 28 per cent of public tenders went to companies outside the State, according to TenderScout.

The Enterprise Ireland-backed firm, which advises small- and medium-sized companies on how to win public tenders, said companies in Britain and Northern Ireland were the primary beneficiaries of the Government’s tendency to award contracts to companies outside the State. The average tender is worth €25,000, TenderScout said.

TenderScout founder Tony Corrigan said its research suggested 10 per cent of Irish firms participated in any of the 7,500 opportunities to do business through the public procurement process in 2013.

According to its analysis, TenderScout says fewer than 2 per cent of Irish firms have been successful in winning European tenders while nearly one-third of Government tenders went to foreign firms.

Mr Corrigan says it is important that SMEs compete in greater numbers for public sector contracts at home and abroad as “Ireland’s economic recovery depends on SMEs developing foreign markets and succeeding when tendering. . . They should resolve to get a greater portion of the domestic and international tendering cake.” Government spending on procurement fell to €12 billion in 2013 down from €15 billion in 2012. The figure is likely to shrink again in 2014.