If Irish firms secure 5 per cent more of the public procurement market, about 6,670 jobs would be created, according to ISME. The organisation says there is evidence of public purchasing personnel "overlooking or not accepting high-quality goods and services from competitive indigenous suppliers".

Its annual report includes a survey indicating that over two-thirds of respondents are critical of the lack "of a professional approach to purchasing by the State sector".

ISME has recommended that the Taoiseach establish a public procurement board as the main way to improve public procurement for indigenous suppliers.

"The board's aim should be to present proposals within three months to the Cabinet for agreed National Public Procurement Policy Guidelines and to subsequently monitor their implementation," says the report.

In response to the report, the Minister for Public Enterprise, Ms O'Rourke, said Irish suppliers "have an enormous opportunity in accessing the £4 billion public procurement market".

She said measures had been put in place by the Government to help small and medium firms access the public procurement market.

"Already five or six public procurement specialists have been appointed to An Bord Trachtala and Forbairt, in addition to a database of purchasers providing access through the publication each year of the Directory of Public Sector Buyers," she added.

Another finding of the ISME survey, carried out among 800 firms, is that only 26.9 per cent of respondents believe that public sector contracts are decided on the basis of competitive tendering.

In addition the report found that 78.7 per cent of respondents claimed they were not given sufficient notice of contracts becoming available. The public procurement market is expected to grow to over £6,600 million over the next four years. According to ISME, 48 per cent of the total domestic public procurement budget goes to local manufacturers and suppliers.

According to the report, this compares with over 85 per cent in Britain, Finland, Italy and Germany.

ISME says "an open communications policy with suppliers should be introduced incorporating a mandatory comprehensive debriefing of suppliers on request throughout the public sector". The organisation claims such measures do not contravene EU directives.