Government approved: obligation to prioritize Israeli products in public procurement to be expanded

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by Ifi Reporter Category:Government Nov 29, 2020

The government approved the compromise proposal that the obligation to prioritize Israeli products in public procurement be expanded. Today there is an obligation to prioritize local produce in the procurement of government ministries amounting to up to 15% of the product price. The manufacturers and representatives of the business sector pushed for the expansion of compulsory procurement to other public bodies as well. On the other hand, the Ministries of Finance and the Competition Authority warned that the proposal could harm Israel's competitiveness and productivity.
Prime Minister Benjamin Netanyahu adopted the position of the Ministry of Economy, which supported the proposal. The compromise was eventually reached through contacts between the Ministry of Finance, the Prime Minister's Office and the presidency of the business sector, headed by Dovi Amitai. The president of the Manufacturers' Association, Dr. Ron Tomer, sharply attacked the proposal.
The expansion of the priority of the country's products will now also apply to mixed tenders for public procurement that includes both products and services. In addition, the procurement of local authorities and local corporations will also be charged with priority of local produce, but with a different mechanism of “right of refusal” of local industry and allowing the local bidder to compare the price to the foreign bid.
The purchase of the health funds will not be required to prioritize local produce, in order to allow them flexibility during the corona period. Purchasing for the benefit of the health system through the government company Israel will be charged with prioritization of Israeli products.
The Manufacturers' Association, on the other hand, explained that these sections were meaningless. Thus, tenders for services and products are already obligated today to prioritize the country's products following a court ruling, and this is only an anchoring of an existing situation.
Another controversy was over the preference for local produce in complex and large tenders in the field of infrastructure. The Ministry of Finance rejected an attempt to prioritize Israeli products, claiming that this would lead to many bureaucratic delays in infrastructure projects.
According to the decision, a team will be set up headed by the Accountant General in the Ministry of Finance and with the participation of the budget commissioner and the director general of the Ministry of Economy and Industry. Such and that on the face of it, such a team can only consider one tender and therefore a minimum of five tenders should be set.
In addition, NIS 200 million will be devoted to shortening credit days in the health system, so that government suppliers will receive their money at an earlier date. The Manufacturers' Association says that NIS 200 million is a "drop in the ocean", and that the decision must be adjusted for all local procurement - a move that costs NIS 2-3 billion.
It was also decided to invest an additional NIS 75 million in improving productivity in 2021, reducing customs duties on imports of complementary products in the field of fashion - and launching a public campaign to encourage
Procurement produced in Israel.
Business sector presidential chairman Dubi Amitai said: “This plan is a series of change and transition from bridal plans and reduction of recessions during recession, to acceleration plans - through increasing demand by public consumption, while encouraging private consumption. That way, businesses will be able to recover and return to growth. "
The president of the Manufacturers' Association, Dr. Ron Tomer, said: "The Ministry of Finance has succeeded in passing an empty decision. This means that the tax money we pay will continue to create jobs overseas, while in Israel there are hundreds of thousands who can not finish the month. ", Which believes that all public procurement should be directed to the Israeli economy - without committees, without exceptions and without detours. The Treasury has defeated the Israeli industry and the entire economy in this battle. An empty decision that means that tax money will not create jobs in Israel."

The Manufacturers 'Association, headed by Tomer, represents the largest manufacturers in Israel, while Amitai represents smaller manufacturers in the business sector and a number of businesses from other fields, such as farmers' associations, investment houses and banks. A confrontation has only recently developed between the two bodies, with the Manufacturers 'Association pushing for a compromise with government ministries over government compensation for workers' days of isolation, while the business sector presidency has struggled with a compromise proposal and demanded various improvements.

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