Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I move amendment No. 8:

In page 5, before section 2, to insert the following new section:2.--(1) Before awarding a construction contract, a state contracting entity shall publish a notice of intention to award such contract, and such notice shall include--

(a) the name of the prospective executing party,
(b) an invitation to interested parties to submit observations to the state contracting entity in relation to the construction contract, such observations to be submitted within 28 days of the publication of the notice.

(2) A state contracting entity shall have the authority under this Act not to proceed to award a construction contact to a prospective executing party on the basis of information received under subsection (1)(b), such information to be independently verified.".

This proposal has been made to me by people in the construction industry in light of the situation in other jurisdictions. It is one of the major problems. It is regularly known in advance whether a contractor awarded a contract has a bad record of paying people on other sites, yet the contractor can come to the next project with a clean sheet if, by some miracle, he, she or it is able to get bonding. I do not know how such contractors are able to manage this. In some cases, a separate company is set up within a group and meets the financial requirements necessary to be granted a contract. Often, the local authority officers who grant contracts know that, in light of the other work done by the contractors or companies within groups, there is a high chance that local suppliers will be left unpaid. However, because a contractor made the lowest bid, possessed financial bonds and had its financial statements checked by the local authority, an officer has no reason not to award the contract despite knowing the record of the people in question or, indeed, people associated with the contractor.

The Minister of State might correct me, but a recent figure showed that the contractors involved in 10% of all school projects last year went out of business. One in west Limerick has been mentioned, but I know of several contractors who went bust during their contracts. This causes major delays and leaves people unpaid. Sometimes, contractors use contracts to pay previous bills but this eventually catches up with their cash flow. It also means that work falls back on the contracting authority. In some cases, the taxpayer must pick up additional costs if the completion of the work must be repriced, which itself has many inherent problems. Many contractors will be unsure of the quality of the work done to date. Consequently, submitting a bid to complete a contract is more expensive than the project would have been had a competent contractor been awarded the contract originally.

I suggest that a notice be given to interested parties so that they might make submissions within 28 days of the publication of a notice of intention by a contracting body to award a contract. The reason is simple and applies extensively. I regularly see newspaper notices about the intention of the Environmental Protection Agency, EPA, to grant a licence. People have 28 days in which to make submissions. This provides an opportunity for issues to emerge that have not already come to light. If nothing arises, the licence can issue.

Planning permissions are more important and germane to every construction project under this legislation.

People think when they get the letter from the council that they have got planning permission. Actually, the letter states it is the council’s intention to grant planning permission in 28 days if there are no objections in the meantime to An Bord Pleanála. The process whereby a local authority gives 28 days’ notice of its intention to issue the final grant of planning permission is very well understood. I see no reason why a public body such as the Environmental Protection Agency, EPA, which issues licences, cannot adopt a similar approach. Companies with a good track record of payments would have no problem with this proposal. It would allow those who were not paid in previous contracts to alert the awarding authority that there could be a problem with a particular supplier.

It is a practical proposal. The purpose of this legislation is to address a problem but this amendment is a preventive measure. It would alert those involved in tendering of problem contractors. It is similar to the measure in planning where those who were in breach of previous planning permissions had them taken into account with new applications. That measure also changed people’s approach to and compliance in meeting requirements of planning permissions. A contractor’s track record should be a factor in future contracts.