Ciarán Lynch (Cork South Central, Labour)
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I call the meeting to order. I welcome the Minister of State, Deputy Brian Hayes, and his officials before the committee this afternoon. The purpose of the meeting is to consider the Construction Contracts Bill 2010 from the Seanad. The Bill was referred to the select sub-committee by Dáil Éireann on 20 June 2012. Is it agreed to conclude consideration of the Bill today if possible? Agreed. I accept some changes have been made to the Bill but I propose that we adjourn at approximately 4.25 p.m. and assess progress at that stage. Is that agreed? Agreed.

I ask all members, the Minister of State and his officials, and those in the Gallery to switch off their mobile telephones as they will interfere with proceedings if they are not switched off.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 1 has been ruled out of order as it is outside the scope of the Bill.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am not happy with that. Could you explain the reason? The amendment is an essential change to the Bill to deal with those who supply bespoke materials as part of a construction contract. Throughout the process everyone has spoken about including this element in the legislation. I received the letter stating the amendment is outside the scope of the Bill. Will you explain to me in non-technical language the reason we cannot deal with the issue?

Ciarán Lynch (Cork South Central, Labour)
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The purpose of the Construction Contracts Bill is simple. The Title says it all, namely, that its purpose is to regulate payments under construction contracts and to provide for related matters. The Bill does not cover the following: the supply and-or delivery of materials under construction contracts, registered employment agreements, bonds or the provision of payments, securities or insurance, apprenticeship schemes, payments of expenses, or decisions of disputes adjudicator. Specifically on Deputy Fleming’s amendment and Deputy McDonald’s amendment No. 7, the proposal to extend the scope of the Bill to include the supply of construction material does not fit with the Bill’s concerns on the regulation of payments under construction contracts. It does not apply to the delivery of supplies of goods under construction contract. Therefore, the amendments are outside the scope of the Bill.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I do not understand that because we are talking about construction contracts and related matters.

Ciarán Lynch (Cork South Central, Labour)
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The Deputy is better aware of Standing Orders than I. I do not have to engage in any further explanation on the matter and I decide not to do so. I will now proceed on the Bill.

Seán Fleming (Laois-Offaly, Fianna Fail)
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That is most unfair.

Ciarán Lynch (Cork South Central, Labour)
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The Deputy can discuss the matter with me outside of the meeting.

Seán Fleming (Laois-Offaly, Fianna Fail)
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This is Committee Stage.

Ciarán Lynch (Cork South Central, Labour)
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The Deputy has been a member of this House for longer than I have and he knows the rules.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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My amendment No. 3 has been ruled out of order. I am puzzled by that because in May 2012 on Second Stage, the Minister of State, Deputy Hayes, said that having examined similar legislation in other jurisdictions, he could see the merit of broadening the scope of the legislation to include bespoke construction supply contracts. I, too, would like an explanation as to why our amendments have been ruled out of order.

Ciarán Lynch (Cork South Central, Labour)
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The best way to facilitate this is that, as I have done on other occasions, when we move to discuss the section of the Bill in its entirety, the Deputy can then introduce those two matters. I will afford the same opportunity to Deputy Fleming at that time rather than discussing the matter now.

Stephen Donnelly (Wicklow, Independent)
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I will take the opportunity to discuss the matter at that time also.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 2:

In page 4, subsection (1), line 20, to delete paragraph (g).

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am even more puzzled now as to why we had contracts relating to drilling and extraction of oil included in the Bill and the Minister of State has chosen to remove them, but what we thought was germane and essential to the Bill – people supplying quarried material, concrete materials and items fundamental to the construction of the project at hand - cannot be covered. The legislation is seriously deficient. All the complaints I have received, on which I spoke at length on Second Stage, related to people who supplied tarmacadam, quarried material, ready-mix concrete and other such materials and they cannot get paid because their materials were bespoke and specific to the particular projects. The products cannot be removed if the supplier is not paid. What is the purpose of the legislation if it does not cover some of the people most affected? While I accept tradesmen and those working on construction contracts must also be paid, what is the purpose of the legislation if a person who supplied quarried material, aggregate, ready-mix concrete and tarmacadam get no protection whatever under the legislation? I do not understand the purpose of the legislation.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I accept the Minister of State's explanation for the removal of drilling and the extraction of oil or natural gas from the legislation. He has explained that fairly and well. However, I do not understand why bespoke materials do not come under the scope of the legislation. The Minister of State indicated on Second Stage that he understood that it would be a necessary measure and that he was minded to consider it and to expand the scope of the legislation. It will make a nonsense of the new measures if suppliers and contractors who provide bespoke materials find themselves burnt and unable to get a remedy.

Ciarán Lynch (Cork South Central, Labour)
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Does Deputy Twomey wish to speak?

Liam Twomey (Wexford, Fine Gael)
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No, I will speak on section 1.

Brian Hayes (Dublin South West, Fine Gael)
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There is broad acceptance of the amendment proposed, but in fairness to Deputies Fleming and McDonald I should reply to the issues they raised, as it is a key issue that we must debate. That is the purpose of Committee Stage. It is a good thing.

Four outstanding issues emerged from the regulatory impact statement. Members will see that the amendments I proposed, which broadly have the support of the House, reflect the views expressed in the Second Stage debate. Three of the four outstanding issues have been resolved. The one issue that was raised, in fairness to Deputies Fleming and McDonald and other colleagues, was bespoke suppliers. We must have the debate. I did not rule the amendment out of order. That is a matter for the Chairman and I respect his ruling. However, it is an important debate that we must have. If we can find a solution to it, I am all ears. We will take as long as we like to deal with the Bill. If members wish to spend ten months talking about the issue, that is fine with me. I have always taken a co-operative approach to the Bill, as Deputies are aware. The Bill is not the preserve of the Government as it was introduced by Senator Quinn. We have looked closely at the issue of bespoke suppliers. We have examined international experience and the experience in this country. I regret that we have been unable to include it in the current phase of the Bill. However, it is not as difficult as people say. The issue of supply and install is covered in the Bill. In other words, if I as part of a contract ask someone to design and install a staircase, as far as we are concerned, that is covered in the Bill and it is allowable.

As Deputy Sean Fleming has said, the difficulty emerges with some of the raw materials, such as concrete, and where responsibility for that resides - who owns it at that stage? We believe that is more appropriate to prompt payment legislation than it is to this Bill, given that prompt payment legislation regulates the way in which people are paid for goods and services that are provided. Colleagues would need to produce a formula that they believe is foolproof, that has the support of the Attorney General and that will not extend the scope such that it becomes non-applicable. The net issue is one of construction. If the bespoke materials are included, are we talking about it outside the construction area? Are there other areas of industry we should include in it? If so, we would be talking about a totally new Bill.

The intention of Senator Quinn's Bill, which was introduced some years ago now, was to deal with this explicit net issue of ensuring people, big and small, within the industry were paid on time. If we widen it so far, it becomes a new piece of legislation and as a result will take many more years to resolve. We have looked at this very closely, having regard to the comments made by both the lead spokespersons in this area and the other Deputies, and we have not yet found a solution. We believe it is more relevant in the area of prompt payment legislation. For that reason, even if these amendments were in order, I would not be accepting them at this stage. However, if people are saying they have a solution to this issue between now and Report Stage, I would be open to that.

Ciarán Lynch (Cork South Central, Labour)
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Before I call Deputies Fleming and McDonald, while it might not be the standard operating procedure of the committee, I acknowledge the presence in the public gallery of Senator Quinn, the originator of the legislation.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I hear what the Minister of State is saying. We all have a considerable amount of material on this legislation, which affects people's livelihoods, with people going out of business if they are not paid for work. We have letters from the Irish Concrete Federation, the Irish Small and Medium Enterprises Association, and several other bodies, indicating their preference to have bespoke materials included. Was the industry aware before we became aware that our amendments on the bespoke issue would be ruled out of order? Was that generally known in the industry or was it news today?

The Minister of State has suggested that if we can come up with a more refined and specific wording-----

Brian Hayes (Dublin South West, Fine Gael)
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We will look at it.

Seán Fleming (Laois-Offaly, Fianna Fail)
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-----for Report Stage, he will consider it. I signal my intention to do so.

Brian Hayes (Dublin South West, Fine Gael)
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From the outset, I have had a very open approach to the Bill, because it is not my Bill. When it returns to the Seanad, I will not be taking it and it will be a matter for Senator Quinn to take forward. The Government has been really committed to trying to get this to work. However, it must not extend it so far beyond the original objective that it becomes inoperable and a much bigger concept. That has always been my modus operandi and I hope the Deputy accepts that. It may be possible to phrase appropriate amendments, but we have not found a solution to it. If it requires more conversations between our officials and colleagues in advance, I have no difficulty in going through those arguments with them. That is open to them.

I cannot speak for the industry representatives.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Were they aware?

Brian Hayes (Dublin South West, Fine Gael)
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I cannot comment on whether they were aware. The date for this committee meeting was set, amendments were tabled by colleagues and we tabled our amendments. It is not a question of whether they could have been aware of it one way or another. When they were published they were in the public domain. I fully accept there is a very strong view on the issue. I still have an open view on it and this might be more fruitfully advanced through some detailed conversations between now and Report Stage to see if we can sort it out.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We should avail of that opportunity. I do not accept the logic of the Minister of State's argument on broadening the scope of the legislation so much that it becomes a catch-all. It is very clear that we are discussing bespoke materials for construction projects. If the Minister of State has an open mind on the matter, we should certainly use the time between now and Report Stage to hammer out the wording. He says it is implicit in the legislation that, for example, a staircase-----

Brian Hayes (Dublin South West, Fine Gael)
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Supply and install.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Yes, supply and install. He suggests that therefore the issue of bespoke materials is covered implicitly in the legislation. We want to get to an explicit articulation of that. For my part, I would be more than happy to take up the opportunity to find that wording. We will certainly be tabling this amendment again on Report Stage.

Stephen Donnelly (Wicklow, Independent)
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We should consider both ends of the spectrum. At one end are cases such as that of specially designed and treated steel supports for a large structure that were created, angled, designed, cast, etc., for a specific structure and could not conceivably be used for any other structure. The Minister of State said they would be included if they were manufactured by the same company.

Brian Hayes (Dublin South West, Fine Gael)
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If they are installed.

Stephen Donnelly (Wicklow, Independent)
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However, if they are manufactured by one company and installed by a separate company, the installation company is covered by the legislation, but the people who made them are not. That is one end where I believe it would be clear that-----

Brian Hayes (Dublin South West, Fine Gael)
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That could be put into a contract. The great dilemma in this area arises as a result of the lack of contracts. That is why we are here discussing the Bill. There is nothing to stop the subcontractor as part of that overall contract putting that as a condition. That would mean that if one designs and installs the structure, it is totally operable within the context of the Bill.

Stephen Donnelly (Wicklow, Independent)
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I understand. However, if some solution is not found, the concern is that the manufacturer will not be covered. It seems to me that we would like to find a way for the manufacturer of such a clearly expensive, bespoke piece of kit to be covered. I can understand that the official concern is over someone who argues that the paint he or she created is also bespoke because it contains a little bit of coloured fleck, and obviously judgment calls need to be made in such cases. Is it the Minister of State's intention to accept an amendment if we can find a wording to cover items that are clearly a one-off and could not be used for anything else? If these people do not get paid they have just lost the money. We are looking for something that would cover such products.

Ciarán Lynch (Cork South Central, Labour)
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I wish to clarify this. Is there a level of confusion between manufacturer and supplier where a builder provider provides a material without being its manufacturer? The manufacturer could be four or five times removed from the building site. Is the Deputy referring to the supplier?

Stephen Donnelly (Wicklow, Independent)
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No, but that is also a fair point. We are differentiating between the person who installs the item and the person who supplies or manufactures it.

Brian Hayes (Dublin South West, Fine Gael)
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I believe the debate is changing, if we are really being honest about this. Deputy Fleming had submitted an amendment on bespoke materials. Bespoke is not similar to ready-mixed concrete, is it? I understand the concrete lobby is seeking to have this included. However, let us be honest. That is not bespoke or one-off.

Stephen Donnelly (Wicklow, Independent)
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It could be.

Brian Hayes (Dublin South West, Fine Gael)
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It is not the same thing.

Stephen Donnelly (Wicklow, Independent)
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No, it is not the same thing, but it could be.

Brian Hayes (Dublin South West, Fine Gael)
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We need to be honest about what we are saying. Deputy McDonald reminded me about what I undertook. It is always good to read what one said about a year and a half ago. It is always good to put it on the record - she might do it herself the odd time. At the time we looked at the question of bespoke items. We have looked at this question and it is difficult. We need to make a distinction, as I did on that occasion, between something that is designed for a specific purpose, as Deputy Donnelly set out, and something that might be described as irretrievable after its installation. Concrete is irretrievable once it is put into a building. Between now and Report Stage the invitation is there to sit down with my officials and go through the issue.

We have examined it very closely but we have not yet found a solution. Perhaps the additional brains in the committee might help between now and then, in the general air of co-operation I have tried to advance.

Liam Twomey (Wexford, Fine Gael)
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Will the Minister of State examine the issue of retention of title? I remember a case from 30 years ago involving a group of pig farmers who sold pigs to a factory which went into liquidation. Initially they were told by the liquidators that because the pigs had been processed into bacon they were no longer entitled to payment, but they identified the sides of bacon in the factory and the High Court stated they retained title even though a side of bacon is not a pig. By the same token, the Irish Concrete Federation argues that when concrete and steel are set the concrete is no longer concrete as it was sold, but the elements are still identifiable as concrete and steel. Following a retention of title court case from 30 years ago, which was decided by Ms Justice McGuinness, concrete and steel are identifiable even though they have changed. Has the Minister of State considered this as a solution to this issue? A simple contract could allow the concrete company to retain title in a very simple manner. Perhaps we could consider this.

Peter Mathews (Dublin South, Fine Gael)
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My experience in validating disbursements for interim payments on contracts is that great reliance is placed on the work of quantity surveyors who are able to disaggregate what becomes set in concrete. They are able to separate the steel element, the concrete element and other parts of the physical delivery, and the physical constituent parts of the practical completion of the contract. They would be able to disaggregate back to the source supplying contractors.

Ciarán Lynch (Cork South Central, Labour)
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With regard to amendments tabled by Opposition members, as we move towards Report Stage I suggest we engage with the Bills Office to seek assistance and support to see how to draft amendments so they will not be ruled out of order. Rather than the submission of amendments, I suggest more engagement with the Bills Office. I know this is an important issue but I must deal with the Bill.

Brian Hayes (Dublin South West, Fine Gael)
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From studying this in recent years I have learned about the complete lack of construction contracts in Ireland. There is poor practice throughout the industry with regard to regulating contracts and ensuring we have enforceable contracts. One of the reasons the Bill was presented by Senator Quinn and others was that people had been burned substantially. On an all-party basis we agreed this can never happen again and that we needed to put the industry on a new footing where proper enforceable contracts would be in place and fairness would be applied through proper adjudication. One of the purposes of the Bill is that once it is established it will lead to better practice in the industry. It is this better practice which I expect will result in more supply and install elements in contracts. We will also have recourse to these contracts, which previously did not exist. The Bill will set a new standard and the industry will have to respond to it in a way that has not happened in the past.

With regard to the point raised by Deputy Twomey, he is correct that title is a fundamental issue, but it is not my job to decide the issue of title. It is a larger issue and I suspect the Minister for Justice and Equality will have a view on it. The legal issue is clear in that if something is not installed and fixed it is retrievable, in that it belongs to the person who supplied it. Once it is installed and fixed it really is an essential part of the property and the questions of beneficial ownership and the title of the property come into being.

This is another example of the point I made earlier. If we extend the Bill it will become something it is not at present. The intention of Senator Quinn's Bill is to resolve a problem quickly, this problem being the plight of subcontractors and ensuring people are paid on time. The real problem in the industry is that people are not paid on time, and we know this. People were burned substantially as a result of what occurred in the crash. If we make a fundamental change on title it will become a wider Bill. This is my dilemma. It would require five or six Ministers across five or six Departments, including the Departments of Jobs, Enterprise and Innovation and Justice and Equality. It has taken a long time to get the Bill this far and I want to get it over the line to ensure it is applicable for a generation of people who need it. I accept that title is a problematic issue. If something is fixed and installed it is part and parcel of the existing current title of the owner.

Ciarán Lynch (Cork South Central, Labour)
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I must interrupt the Minister of State, because it is my job to get the Bill over the line this afternoon if I can.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 3 has been ruled out of order as it is outside the scope of the Bill but Deputy O'Donnell may discuss the issue when we are discussing the section if he wishes to do so.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 4:

In page 4, subsection (1), line 33, to delete "Finance" and substitute "Public Expenditure and Reform".

Ciarán Lynch (Cork South Central, Labour)
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Amendments Nos. 5, 13 and 38 are related and will be discussed together.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 5:

In page 4, subsection (1), between lines 42 and 43, to insert the following:" "social contract clause” means a clause that obliges an executing party to—

(a) employ some unemployed persons who are on the live register and who are under 25 years of age, and
(b) employ some persons who are long term unemployed;".

This is also linked to an issue of which the Minister of State is very well aware, which is the number of people who have not finished their apprenticeships in various trades because firms went out of business and many people were left high and dry. FÁS has been trying to make some arrangements to recognise the final phases of apprenticeships and get training and experience for the people involved. We all have constituents who emigrated a few months short of their final apprenticeship qualifications. There is no employment here, but they are not able to get their papers to take up employment in other countries.

Everybody recognises that the biggest problem we have in Ireland, leaving aside the country's financial affairs, is the employment issue, particularly the employment of young people and the growing number of young people who are unemployed. We must do something concrete - I apologise for using the pun again; I will try to think of a different phrase when I next speak. We must do something definite, particular or specific to help young unemployed people not only complete their apprenticeships but get work and practical experience. I know this will lead to a cost for tendering companies but if it is part of the tender document everybody will tender on an equal footing and no company or business will be at a disadvantage. I have not been specific about percentages, numbers or turnover and I am just asking the Minister of State to open the door to examining the issue. Most people would agree we are trying to establish a worthwhile principle.

I know there are two other amendments grouped for discussion purposes, but that is my comment on that one.

Ciarán Lynch (Cork South Central, Labour)
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I will bring the Deputy in on the other ones while we are at it, if he wishes.

Seán Fleming (Laois-Offaly, Fianna Fail)
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That is the point I wanted to make.

Ciarán Lynch (Cork South Central, Labour)
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I will now call the Minister of State to respond to amendment No. 5.

Brian Hayes (Dublin South West, Fine Gael)
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Deputy McDonald has one as well. It is the same issue.

Ciarán Lynch (Cork South Central, Labour)
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Does Deputy McDonald wish to comment?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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They are grouped together so I shall discuss the amendment but will not move it until later. It is important that the social clause is referenced in the legislation. The Minister will see that my amendment is cast more broadly than that of Deputy Fleming. It therefore addresses the issue of long-term unemployment, but also addresses apprenticeships, compliance with fair employment, equality and anti-discrimination legislation, and compliance with the green public procurement national action plan. We have modelled this on the clause included for the A5 project. There is a real opportunity in public procurement to achieve not just efficiency and value for money but a number of other key social objectives. The most obvious being the need for employment and training opportunities for younger people as well as for long-term unemployed persons.

Under the EU directives there are specific rules and regulations in respect of public procurement. However, in other jurisdictions they have quite successfully managed to knit key social requirements and objectives into the public procurement processes. We need to move in that direction here.

In March, I received a response from the Minister for Public Expenditure and Reform, Deputy Howlin, in which he told me something I already knew. He said that his Department and the National Procurement Service are examining the use of social clauses as a means of supporting activation. I am aware that that important work is under way and I am keen to support it. I would like to see this kind of provision contained in this legislation.

Michael Creed (Cork North West, Fine Gael)
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I cannot anticipate what the Minister of State will say about this matter, but all of us would like to see a situation whereby people finishing their apprenticeships are facilitated. In addition, we also want to see unemployed young people getting an opportunity to work and long-term unemployed people getting a chance to re-enter the workforce, particularly in a sector where they may previously have been employed. There is a danger, however, that we might be seeking to solve all the problems of the construction sector in this Bill. Those currently employed in the construction sector would not thank us if their jobs were put at risk to facilitate these amendments. If we can put construction on a sound footing, with people getting paid for the work they are doing, surely that in itself is a step in the right direction to facilitate the issues of concern. If we stitch too much into this Bill we may run the risk of undermining its core objective.

Brian Hayes (Dublin South West, Fine Gael)
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I will put on record the official reply and we can then have a discussion about it. I am addressing amendments Nos. 5, 13 and 38. While there are merits in the Deputy's proposals, they are focused on issues that are really outside the scope of this legislation. This Bill is designed to address failures to pay construction sector contractors, subcontractors and sub-subcontractors who have completed work to the required standard on construction projects. The Bill will address these issues by providing statutory arrangements concerning payment under construction contracts, including providing for interim payments and, second, by introducing a new mechanism for the swift resolution of payment disputes through a process of adjudication.

The manner of social clauses in public contracts is something that I am closely examining. The inclusion of a social clause in all public procurement contracts could require, for example, that a quota of long-term unemployed be employed in the delivery of a contract. It must be said that an initiative along these lines would pose a number of risks. In the current economic climate and, in particular, bearing in mind the difficulties in the construction sector, businesses have for obvious reasons been reducing their existing workforces rather than taking on new employees. Consequently, it would be expected that where a business is awarded a public contract, the work would be carried out by the existing employees of that business. In such circumstances a social clause requiring that a number of long-term unemployed be employed in delivering a public contract, could either impose an additional cost on SMEs that they may not be able to afford, or result in an employee of the supplier being let go in favour of a long-term unemployed person.

The Government is deploying a wide range of measures to facilitate job creation and support labour activation measures, with a particular emphasis on assisting long-term unemployed people. Obviously, the main purpose of public procurement is to ensure that goods, services and works are purchased by the State in a manner that is legal, transparent and of high probity. Our key requirement is the achievement of value for money. However, I am examining the use of social clauses as an additional means of supporting activation. We are seeking to identify the scope for the use of social clauses in parts of the capital area in particular.

Taking Deputy Creed's point, we do not think it is applicable or germane to the Bill, but I do see that there is merit in the proposal. I have already said that to Deputy McDonald when we discussed this in the House some time ago. The matter was also raised in the House recently by way of a Topical Issue. The question is how we do it and doing it in the most sensible way possible. Deputy McDonald spoke about the A5, which was something that her own colleague, Minister Murphy, put into the contracts. He put it into the A5 contract, but it was not put into a specific piece of legislation and was not done as an application throughout construction. It was not done for capital construction, but for a specific project.

All that shows that social clauses are applicable, workable and effective if one specifies a project or group of projects. It will then be clear for those going into public procurement that this will be a condition of the contract because we will not get through EU procurement law unless that is clear. One cannot discriminate against long-term unemployed people in Poland, Ireland, Britain or wherever, so we must set a very clear, level playing pitch. The way to do that is to set it upfront as a clear policy of the Government that we want to see social clauses in an area of capital projects.

We are in discussions with the National Development Finance Agency concerning the next devolved schools programme whereby, as a specific aspect of that contract, a social clause would apply. We would make it a condition of awarding those contracts that somewhere in the region of 10% of the people involved would come from the long-term unemployed. We think that is a more sensible way to approach this. I am not talking about public private partnerships, but about a bundle that would be delivered through the NDFA's funding model for the purposes of schools development.

The key issue is one of monitoring and enforcement. There is no point in having a big, laudable 10% of these jobs going to people who are long-term unemployed construction workers with particular skills, unless it is monitored and enforceable. We must ensure that that can happen. We want to see progress here and I can reliably tell the committee that we are making progress in this regard.

I have informed them that we are coming to the end of a discussion with the National Development Finance Agency which I think will have a successful outcome, and in terms of that bundle of schools, we will see a social clause. We are following the model that is being done in Northern Ireland where, regarding a specific project of capital schemes, a social clause applies. That seems to work there and I am confident it will work here as well.

Ciarán Lynch (Cork South Central, Labour)
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Amendments Nos. 6 and 14 to 19, inclusive, are related and will be discussed together. Amendments Nos. 15 to 19, inclusive, are alternatives to amendment No. 14. Amendment No. 16 is an alternative to amendment No. 15 and amendment No. 19 is an alternative to 18. I hope Deputies are able to follow that.

Brian Hayes (Dublin South West, Fine Gael)
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Amendments Nos. 6, 15, 17 and 18 are grouped. I move amendment No. 6:

In page 4, subsection (1), to delete lines 43 and 44 and in page 5, to delete lines 1 to 4.

The regulatory impact assessment examined the experience of adjudication in other jurisdictions and found that the majority of disputes that used such processes were for contracts valued somewhere between €13,000 and €65,000. Therefore, the regulatory impact assessment concluded that these thresholds were too high and should be reviewed or removed. The amendment I am putting forward today removes the current thresholds in the Bill, which are €200,000 for private contracts and €50,000 for public contracts, and replaces them with a single contract threshold of €10,000.

There has been some confusion as to what the threshold will relate. The new threshold of €10,000 relates to the overall contract value. Therefore, subcontractors will be free to refer payment disputes relating to lesser amounts to adjudication. For example, if a contract with an overall value of €11,000 gives rise to a payment dispute of €1,000, this can form part of the adjudication process once the overall contract is more than €10,000. When Senator Quinn placed the Bill and put inserted those thresholds, he realised within a short time that the international experience is to have very limited thresholds so that this would apply to virtually everybody in the industry. We have done that by removing the €200,000 and €50,000 thresholds on public and private contracts and we have now a single threshold of €10,000. It is not that it applies to subcontractors with €10,000 or more. On the contrary, if the total value is in excess of €10,000, even though I have a dispute regarding a sum less than €10,000, I can seek adjudication on that. This is one of the major issues that came out of the arbitration process, the regulatory impact assessment and the Dáil debates. I gave a commitment that I would take action in this area and we are now responding.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Generally, I agree with everything the Minister of State has said. I will just make some specific observations. Many of us felt the figure was so high it would be very restricted in who it could apply to. Many of the people who were burned - caught financially - were well down the line, subcontractors of subcontractors, and might not even know who the main contractor was in the first place. It is important that the scope be brought down to a much more manageable figure. Some people might think it is too low. I would imagine some people might say €10,000 is a relatively small contract to be caught by this legislation, but I am of the view that €10,000 is a reasonable amount of money. If a tradesperson is out of pocket by €7,000 to €9,000, it could be a large part of his or her income for several months, so it is important that this would be included.

My only concern is regarding how the threshold is drafted. The text excludes contracts from the application of the Bill if the value of the contract is not more than €10,000. There are a number of scenarios where this could lack clarity. Take an architect's initial design contract for, say, €5,000. Will that be included in the specific contract or is it the overall project we are talking about here? There are many projects where the construction contract could be only a fraction of their project costs. We have all seen it from the Luas line. The pre-construction costs can, in some cases, comprise the majority of the costs, and it varies depending on the nature of the contract. It could lead to some High Court litigation.

What would happen in a situation where variations are allowed in a contract? Many contracts have a figure that is subject to variation depending on various elements in it. I can envisage difficulties and possible adjudications having to go to court, not through the procedures in the Act, where the €10,000 figure is breached because of variations in a contract where it might not have been specified in the original amount. The contract could move over €10,000 during this period were some additional amounts added.

There could be a situation where the main contractor could raise a counter charge for a difficulty with the quality of work provided by somebody he had contracted to do work. One party could say they are owed €50,000 while the other could say that party did a bad job and they are therefore claiming €40,000 back, which brings the amount down to less than €10,000. Where do these opposing items fit into that kind of issue? While I agree with the principle of what the Minister of State is doing here, it needs to be very tight to avoid unnecessary litigation.

Michael Creed (Cork North West, Fine Gael)
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I welcome the Minister of State's contribution on this. The headline stories on the collapse of the construction sector were all about the big players and I do not need to recall their names for this committee. On closer examination, it transpired that most of those companies had very few, if any, direct employees. The real workhorses of the sector, and the people we came in contact with, were the subcontractors for whom €10,000 or €1,000, whether for a fitted kitchen, a roofing contract or an electrical wiring job, was the difference between having a wage or no wage at the end of the week. The consultation process, the regulatory impact assessment and the engagement that has gone on have significantly improved the Bill. Dropping the threshold down to €10,000 is very welcome and will go a long way towards addressing the concerns of those small subcontractors.

In a neighbouring constituency of mine in west Limerick not long ago, I recall the issue of Kilfinane school and the subcontractors there, all of whom were badly burned and could get no redress. That is a story that sticks as a visual manifestation of this problem. It is too late for them but at least now, under this legislation, they will have recourse in future when it comes to contracts. That is important because in recent years all the big players in the industry, while they might have had a site foreman, had all their work carried out by subcontractors, and those subcontractors were left high and dry when the tide went out. This provides solace for them. The thresholds previously envisaged were far too high in terms of the impact on these small subcontractors, and this is a good day's work.

Ciarán Lynch (Cork South Central, Labour)
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And the Deputy is referring very specifically to the C2 category of worker in that.

Michael Creed (Cork North West, Fine Gael)
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Yes.

Brian Hayes (Dublin South West, Fine Gael)
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I very much agree with what Deputy Creed said. In fairness to Senator Quinn, the whole objective of the Bill was to help the small guy to ensure he had some rights in this and that.

Through adjudication, there would be a low cost, or no cost, and a straightforward way of achieving fairness.

As I understand it, thresholds were initially set high because the original Bill contained financial security provisions. These were removed in the Seanad because accessing financial security in the first instance would become prohibitive. When they were removed, we saw that we could do something with the thresholds.

Reverting to Deputy Fleming's point, we will not overcomplicate matters. If the total size of the contract is more than €10,000, it is fine. Using his example of the architect, the important issue in terms of the law is the total size of the contract. The adjudication procedure under the Bill would apply in the circumstances set out by the Deputy. When the Bill is in place, it will improve the contracting arrangements between subcontractors and main contractors in that it will make the lines of responsibility clearer. This is an example of where legislation will lead to a positive alteration in an industry. I welcome the comments about thresholds, which were identified as a key issue by the regulatory impact assessment. We have moved. Deputy Fleming stated that some people would assert that €10,000 was too little, but I was determined to set it at that level on reflection after Second Stage.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I welcome the lowering of the thresholds. We all agreed that they were set too high, but why have a threshold at all, or why not set it at €5,000 or €2,000 instead of €10,000? I am taking on board Deputy Creed's comments in respect of those who were burned, those whose work was worth modest sums in the greater scheme but for whom those sums became significant when unpaid.

Brian Hayes (Dublin South West, Fine Gael)
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At the end of Second Stage I took the view that there should be no thresholds. If we were going as low as €10,000, why have any threshold at all? We could have made it clear for everyone. However, the Attorney General's advice was, to avoid vexatious claims, there should be some threshold limit. Given the fact that we all must take advice given on the basis of precedent and long-standing experience, I had no difficulty with accepting the €10,000 threshold.

Michael Creed (Cork North West, Fine Gael)
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As a lay person, my understanding of an implicit element of the law is that, if I am subcontracted on a major construction project and fear that I will not be paid, I have the right to withdraw my labour and terminate my contract, be it written or not, for the works involved. Given the fact that the Bill envisages a resolution process, I take it that there is nothing implicit in the legislation that cuts across the fundamental right to terminate a contract. Just because a resolution process is available, I should not be obliged as a subcontractor to continue providing my labour.

Brian Hayes (Dublin South West, Fine Gael)
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Two issues arise. First, the Bill makes provision for the withdrawal of labour, although I am unsure in which section. This is important. There is a recognition of the need for a cooling down period whereby, if people take this route, they can re-examine the issues and achieve a fair resolution. Notwithstanding any adjudication procedure, every citizen has a fundamental right to take an action if he or she believes that he or she has been unfairly treated. This right exists in this Bill as it does elsewhere. However, section 5 sets out a clear provision in respect of the right to suspend work for non-payment. It is a fundamental part of the legislation.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 7 has been ruled out of order, as it is outside the scope of the Bill.

Ciarán Lynch (Cork South Central, Labour)
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Although I mentioned that I would invite discussion, we have already covered the matter. Do members have additional comments to make?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I will vote "Níl" for the simple reason that we must still straighten out the issue of bespoke materials. I want to put that on the record.

Seán Fleming (Laois-Offaly, Fianna Fail)
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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.".

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.

Stephen Donnelly (Wicklow, Independent)
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I agree with Deputy Fleming but support his amendment for a different reason. Before I was elected to the Dáil, I was involved in PPPs, public private partnerships, and financial modelling on the private sector side. I only began to take a look at them from the public sector side in the past two years. I have been astounded by the lack of public sector capacity to negotiate these arrangements properly. Vast profits are being made in some of these contracts which should not happen, particularly if one looks at the returns on invested capital. There is an opportunity for the State to tighten up the value it obtains in these contracts. If we are to examine the kind of profits the developers made during the property bubble, we would probably find there were super profits made off State assets and permits.

A provision like the one in this amendment would be some way of other contractors not just warning the State against potential issues with another contractor but advising it will be taken to the cleaners. I do not believe the apparatus of the State is set up to get the best value from these construction contracts.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I support the sentiment of Deputy Fleming's amendment. I have, however, a concern about not awarding a contract to a party on the basis of information received in the manner outlined. That would be open to challenge and could be problematic. That said, Deputy Fleming has set out clearly a strong case for considering some provision of this nature to be included in this legislation. I would contend, however, that it should be thought out more carefully and cast in safer terms.

Michael Creed (Cork North West, Fine Gael)
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Deputy Fleming has identified a real problem of cowboy companies re-inventing themselves legally and getting new State contracts. This legislation is about providing solutions where a contract has gone wrong. The State, however, should be preventing these issues arising in the first place.

While I am not sure the amendment would stand up to a legal challenge, the Department should get a handle on it. The main cases of the practice Deputy Sean Fleming alluded to with which I am familiar are contracts with the Department of Education and Skills. I am sure this example is repeated throughout the country. A school gets a grant for a two-classroom extension which is put out to tender. Several contracts come in within €1,000 of each other. As the grant does not meet the full cost of the building, the board of management, which has to raise funds locally, cannot understand any logical reason why it should not take anything but the lowest price. Then, one has all the problems that flow from this.

I have written to the Minister for Education and Skills on this issue, asking him to oblige boards of management to employ appropriately qualified people, say quantity surveyors, to construct tender documents and assess them. What mainly happens is that schools employ a civil engineer to do up a design but who is then obliged to assess the tenders and so forth. This is where we run into difficulties. It would be better if schools and others involved in evaluating State contracts were not so preoccupied with taking the lowest possible price but were cognisant of a contractor’s capacity to undertake the job, not to leave other contractors unpaid and a trial of destruction behind him.

Quantity surveyors are a critical profession in this context and should be used to determine whether a job can be done for the price quoted. In the instances where projects ran into trouble, one will find they were not used appropriately. It is understandable why parents or a board of management would take the lowest price in a tender. The amendment is about preventing problems.

Peter Mathews (Dublin South, Fine Gael)
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The objective of Deputy Fleming's amendment is worthy. There is a danger, however, that it could enable a contractor’s competition to effectively put him out of business if there had been, say, a delicacy in his financial affairs. A delay in a recent contract could have been caused by a loss-making contract, just a bump. A competitor could exploit that bump within the 28 days’ notice period. We need to be careful about that.

Deputy Creed has also put his finger on the problem of tenders. It is about qualified and experienced personnel judging the delivery capacities in a contract which is mainly quantity surveyor territory.

Ciarán Lynch (Cork South Central, Labour)
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Deputy Fleming and I discussed this in the last Dáil when we were on the environment committee. It is not just concerned with the schools building programme but also uncompleted housing estates, even before the property collapse, and the builders who reneged on development bonds, did not adhere to planning application conditions and who were serial offenders in this regard but who kept coming back and getting local authority contracts.

I am not too sure what the legal standing of it is because every contract might be looked at entirely separately but there is an issue with the State giving money to people who are perceived to be or have been identified as serial offenders regarding undertakings they have given on behalf of the State. There is some merit to it and perhaps it could be looked at by the Minister.

Brian Hayes (Dublin South West, Fine Gael)
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Deputy Fleming is right in saying there is a problem. I want to be up-front and admit there is an issue here largely driven by the fact that there is such competition for construction contracts because the price has come down substantially. If one speaks to the Minister for Education and Skills, he will tell one that on average, there has been a reduction of between 30% and 40% on what we are spending now for the unit cost of primary schools vis-à-vis what was the case at the height of the boom. With that reduction and the extraordinary value we are getting now, there is obvious competition for that work from those who remain in business. The excessive profits are not there anymore and people are litigious and look at every aspect of the contract to make sure that it is delivered as stated in the contract and there is nothing above and beyond it.

There are two fundamental issues feeding their way back into public contracts and the Chairman is right in highlighting that. It is an issue in my own Department regarding the Office of Public Works. I know it from the flooding issue where we give out a major contract of €2 million, €3 million, €4 million and sometimes €7 million to main contractors. One needs to keep a close eye on everything that is going on because the profits in the industry are not as high as they were in the past. We are getting more value and much greater bang for our buck even though the amount we are spending has come down. We are spending €17 billion over a five-year period. We are getting much greater value because of the competition that is there.

I understand that Deputy Fleming is trying to address a problem with his amendment but I do not believe this is the place to address it. When I read the amendment again, I saw the reference to the period of time when this information would be published and an invitation to interested parties to submit their views. Who are interested parties? In most cases, it is the competition because there is a standstill period of between 14 to 16 days under EU procurement law. In the great majority of cases, it is the person who has not got the contract who is the interested party. To whom is Deputy Fleming referring in respect of interested parties because that happens anyway?

What Deputy Fleming is trying to address - it is a real issue - is a pre-tendering stage where any good public procurement individual or group of individuals really needs to know who they are dealing with. This refers to the point made by Deputy Donnelly. The pre-tendering stage is when all the work should be done to assess difficulties with other tasks that may have been there in the past. That would be a major problem with this amendment. Who are interested parties?

Second, one is trying to get a piece of work done. This extends the period of time by opening up this new opportunity. I know the recent case in west Limerick which has been referred to where the person would not pay up but it was not as a result of insolvency. It was just that he would not pay up because of the existing contract. There is a wider problem here which we are looking at.

There has been progress in recent years on public procurement generally in these contract areas. I take Deputy Donnelly's point about PPPs. We had some spectaculars in this area in the past decade and a half but there has been very little PPP activity in the past number of years because no one was prepared to invest in the country. I recently spoke at a conference at the National Convention Centre. There is substantial interest again. The new areas where we will be engaging in PPPs are, if I can be very blunt about it the bog standard stuff - schools, primary health care centres and Garda stations. They will be not be trophy projects delivered in certain constituencies with all kinds of fanfare. That day is over. It is the kind of activity we need to keep the public administration system together. There is significant interest in Ireland because of the improvement in many areas. As I continually say, if one makes the sovereign look less risky, people are prepared to invest in the country again. So there is interest again and we are heavily involved in that aspect.

The Deputy is right. The level of supervision in the past and the way these contracts were handled was appalling. That will be helped by the fact that we are centralising public procurement, as the Deputy is aware. We have a new office located within but independent of the Department of Public Expenditure and Reform, if that is not a contradiction in terms. Someone from outside is running public procurement. Due to the fact that we are getting value because the money is not there and so many more parties are competing for this work, we must monitor those very closely. Monitoring the contract is everything because it is at that stage that things can deteriorate. The day of these large-scale trophy projects around the country is over.

Stephen Donnelly (Wicklow, Independent)
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I am pleased the Minister of State is looking at monitoring but it is also a matter of the construction of the contracts. The kind of ratios I have seen embedded in some of this are extraordinary. Private contractors would not let the other party make as much profit for the level of capital risk and IP they are bringing to the table as the State allows the private sector to make.

Brian Hayes (Dublin South West, Fine Gael)
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The major difference is that we now have standardised contracts which have made a significant difference in terms of giving certainty to public authorities engaged in this. I will be frank. There are too many people involved in public procurement who do not have the specialist knowledge of markets and sectors. One of the things we have done within procurement recently is to recruit people from outside who have knowledge of and expertise in specific markets on a contract for five or seven years. That has made a big difference in terms of knowledge of markets.

We are in a new space. We will not get everything right but there has been a significant improvement in the procurement agenda and public contracts are fundamental to that. Standardised contracts involve having the agreement of the offices of the Chief State Solicitor and the Attorney General and everyone signing up to it. Previously, people did not work together. This was a ludicrous situation whereby the State's lawyers and authorities were putting these contracts together but were not working together. This has changed.

Ciarán Lynch (Cork South Central, Labour)
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Deputy Twomey has indicated that he wishes to speak.

Liam Twomey (Wexford, Fine Gael)
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Deputy Fleming's amendment might be dealing with situations before the contract is awarded. The Minister of State talks about how he looks at these issues. Does he review every single tendering contract particularly when they fail? There are two reasons why tendering contracts fail. One is that there are many people who are desperate for work, tender too low and simply fail to achieve the result the expected to achieve. The other reason relates to what is actually driving this kind of subcontractors' legislation. There are people who set out to rip people off from the outset and never have any intention of paying anybody. There is that difference. Do we look at every single tendering contract in the public sector that fails and examine the reasons why it failed? That would then follow through on what Deputy Fleming is talking about. We would be identifying people who fail and who fail on a regular basis and we might identify who we describe in this country as cowboys. I remember talking to some proponents of this legislation a number of years ago. They told me that it was used very infrequently in the UK particularly where the arbitration issue was concerned and that they had seen an increase in its use in the UK after our construction industry collapsed because a number of people who used to work in this country moved to the UK, brought their bad practices with them and found themselves facing arbitration in a way they were not used to expecting in this country.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister of State mentioned an invitation to interested parties. This invitation is to the public and anyone with an interest in responding. It is not a specified list. I regularly see advertisements in newspapers-----

Brian Hayes (Dublin South West, Fine Gael)
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From An Bord Pleanála?

Seán Fleming (Laois-Offaly, Fianna Fail)
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Yes. The Minister is looking at it in the very narrow and confined way that public officials might look at it.

One would often see an advertisement in the paper that a piece of land is going to be registered for the first time. An advertisement from the Property Registration Authority is an invitation to the public. That is what I meant.

The Minister of State mentioned a couple of things that sounded good but do not happen in practice. He spoke about good procurement officers. He might talk us through that. He said that procurement officers are effectively tied by the system they operate. I know of examples in which people who signed the contracts knew that there was a high likelihood of something going wrong because although the paperwork, the bond and finances stacked up they knew the people involved in the company from previous experience. As a result of this pre-qualification, whereby companies had to have a certain level of turnover in previous years, many local contractors were excluded from tendering for contracts because in the downturn their turnover had gone down. By definition in many of the big contracts one was dealing only with major companies because they had the required level of turnover. I can give an example and I guarantee everybody has seen this happen. I know builders who built local authority housing estates of 20, 30 and 40 houses, ten, 15 or 20 years ago. Until a few years ago contractors built two more in the same estate but as their business had gone down they were not eligible to tender for building the extra houses because of the pre-qualification financial requirement, although they had built the 24 in the estate some time earlier. The procurement officer's hands are tied by all these public standard contracts, or whatever they are called, that the Department has in place.

The Minister of State mentioned creating a national procurement officer which if it happens will be good. How many people in the State are procurement officers? Every local authority, VEC, HSE divisional officers, roads department, the NRA-----

Michael Creed (Cork North West, Fine Gael)
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Every school principal.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I could list 100 bodies that are in a position to sign contracts spending taxpayers' money. We are raising an interesting point here because in the case of a new school run by the Department of Education and Skills that will be the contracting body but those are big projects.

Michael Creed (Cork North West, Fine Gael)
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Every board of management.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Normally it is the board of management and the local parish priest, or the local principal in some cases. Most of these people are genuine and operate to the best of their ability but they feel that their hands are being tied as part of this process too. They cannot give the contract to the builder who built the school a couple of years back and is a good person but they give it to somebody from 80 miles away whose track record they do not know and about which they are concerned.

So many people are able to sign contracts on behalf of the Irish taxpayer, many of whom have no training in this area and maybe do it only once in their entire career, for example a school principal. Not everybody can get everything right the first time around. I am not talking about taking power away from them. We put these strictures in place to prevent them going off the rails then they turn around and say the strictures have prevented them giving the contract to someone they know. It is a circular argument so I will leave it at that but the Minister of State gets the point.

I would like the Minister of State to ultimately produce a list - I am sure the media could produce it - of all those contractors on public bodies who went bust during the term of a contract. The Minister of State or his officials should have that list on their desks, as should all Ministers, and those contractors should not be considered. The Minister of State will probably tell me that he could be sued if these people were not considered but somewhere along the line the taxpayer's interest has to come into the equation because some of those people are well known and they should not be in the frame the next time around.

Brian Hayes (Dublin South West, Fine Gael)
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That is an interesting discussion but I am not sure how germane it is to the Bill. It is an important part of the construction sector as we try to improve construction levels and see greater activity in the area. I think it is fair to say that public procurement within the construction sector operates in the most successful way when the authority makes clear what it wants at the pre-tendering stage and that it has the power to go through that information rigorously to make sure that it is satisfied with those who are looking for the work.

The Deputy asked if I have the list of those who go out of business. That list is a matter for the contracting authority. The Minister, Deputy Howlin and I set the standard and norm which is applied across the system. The best example of getting a handle on that is the tax clearance mechanism for which the Revenue Commissioners have responsibility. That should highlight difficulties where people are looking for work.

The Deputy asked a fair question about the number of people employed in public procurement. There is a figure set out in the Accenture report. I understand it is 580. I said when the report was published that it is still too many. We do not want people involved part-time in public procurement. This is full-time business. I hope the Deputy supports us when we centralise this as we are doing because there are enormous opportunities for substantial savings if we get this prize. Accenture said that somewhere between €280 million and €550 million can be obtained over a three year period by better procurement. The prize is €500 million over three years if we get this right. That requires having people in place who know their business. It does not require people who do this part time. I fully concur and agree with the Deputy on that point. That was very clear in the Accenture report.

This is all about proper payment practices and one of the things we are considering, which may have come out in parliamentary questions to me or to the Minister, is a project bank account which he is examining in the Department. This would be a payment mechanism structured around a trust account where staged payments due to named beneficiaries, that is main contractor and specified sub-contractors, are notified to the bank and the agreed amounts are paid via the account directly to the beneficiaries. That would give the State much more oversight and, arguably, of how and when people are paid for work done on that contract. We have seen good international examples of this where it seems to have worked.

Have I answered all the Deputy's questions?

Seán Fleming (Laois-Offaly, Fianna Fail)
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I understand what the Minister of State is saying. I got the gist of it.

Brian Hayes (Dublin South West, Fine Gael)
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That is half the battle.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 9 in the name of Deputy Fleming has been ruled out of order as being outside the scope of the Bill. Likewise Amendment No. 10, which involves a potential charge on Revenue. Amendment No. 11 in the name of Deputy Fleming also involves a new section.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 11:

In page 5, before section 2, to insert the following new section:"2.—It shall be the duty of a State contracting entity, to place a notice at the site entrance, each time the state contracting entity makes a payment to the executing party, such notice to state the date the payment was made and amount paid to the executing party.".

Peter Mathews (Dublin South, Fine Gael)
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A queue of subcontractors would be lining up.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Precisely. They would know the main contractor got a cheque in the morning and they would want their cheques by lunchtime. Rather than, as Deputy Mathews mentioned, a main contractor saying he is waiting for a quantity surveyor to approve the staged payment and that it is held up for another month and then another month and having all that flouting around, the State body could put a notice on the site to the effect that a cheque for €200,000 arrived this morning.

Peter Mathews (Dublin South, Fine Gael)
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The white flag has been raised.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The subcontractors would queue up for their cheques and they would all go home with them at lunchtime. It is a blunt instrument and a direct approach. It would save a good deal of trouble and many subcontractors, and subcontractors of subcontractors, would know that money had arrived on the site that day and it was time for them to get paid.

Michael Creed (Cork North West, Fine Gael)
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I have two observations regarding the amendment. A constituent who is a subcontractor on a State contract contacted me recently. The State was about to pay the main contractor but there was a significant danger that if the cheque was paid to the banking institution dealing with the main contractor's banking arrangements, the funds would not be released subsequently to pay anybody because of the precarious nature of the main contractor's financial circumstances. That is something of which we must be conscious.

I understand where Deputy Fleming is coming from in tabling this amendment. He is sending a signal to all and sundry that somebody has received perhaps substantial amounts of State funding but it might not only be the subcontractors who might turn up at the main contractor's door. Other guys in balaclavas could turn up as well. That is a legitimate concern and, therefore, I am not so sure about this amendment.

Brian Hayes (Dublin South West, Fine Gael)
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Once they are not paid in cash-----

Seán Fleming (Laois-Offaly, Fianna Fail)
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He could be kidnapped.

Brian Hayes (Dublin South West, Fine Gael)
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The first question that came to mind when I read this amendment was who was going to pay for the site notice being erected. This is about public contracts but what about private contracts?

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister of State proposes to abolish the definition in the next section and, therefore, it will apply to everyone.

Brian Hayes (Dublin South West, Fine Gael)
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When a contract is awarded, a schedule of payments by the State to the main contractor is agreed. The contractor then receives those payments as the work is done and he or she in turn pays the subcontractors. I know what the Deputy is getting at, but I do not see the significance of this. When I read this again last night one of the first thoughts that came to mind was that it is part of a public authority's contract to make payments on the basis of staged payments. I do not know if information could be made available through its website that it had paid people. The State makes payments and it is pretty good at paying. As long as we get the money from the outsiders, we can keep writing the cheques. I do not know how this proposal would help in that respect. It would set up a dichotomy between public authorities and private individuals and companies who equally procure construction contracts.

Peter Mathews (Dublin South, Fine Gael)
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During the past 40 years the balance of credit power has moved very much in favour of main contractors compared to the past. I remember one of the country's largest contractors used to be clients of ICC Bank and their reliance on loans was much greater in yesteryear than it has become in recent years because they, in turn, receive their credit not from their bank, but from their subcontractors. They had to have a large amount of cash on hand every Friday to pay the wages of the labourers who would have numbered 4,000 across the country. That is no longer needed because all their inputs are in the form of subcontractors who, in turn, employ the labour.

Stephen Donnelly (Wicklow, Independent)
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Deputy Fleming is right that this is a crude instrument, but I would put forward an observation for consideration on this matter. I was at a talk by, I think, the ex-president of Tanzania who spoke about how to ensure that schools paid teachers and they turned up for work. One of the big problems was that the money was coming from the state for the school to do its job but the principal and the teachers did not show up and schoolbooks were not bought. The money was not being used as it was meant to be used. There is an analogy between that situation and this one. As the Minister of State said, the State pays but the purpose of Senator Quinn's Bill is to address the problem that the money is going where it is meant to go. That ex-president said that the single most effective thing they ever did was to pass a law or a rule whereby the payments as they were made were nailed to the front door of the school and all the parents could see them. The notice was to the effect that this month the school is being paid this amount of money, this is the number of teachers who should be in the school, this is the amount that has been paid for books, and so forth. He said it was the single most effective thing they were ever able to do for rural and urban education because it empowered the parents to demand that the state money was used as it was meant to be used. I am struck that there is quite a clear analogy between that and what Deputy Fleming is trying to do here.

Brian Hayes (Dublin South West, Fine Gael)
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That is a very good suggestion. The INTO, ASTI and TUI should be asked for their observations on that. It is a very interesting suggestion that the money would go to the schools and based on the hand-over to the teachers we should all know about it, rather than the current centralised system where they are paid on time every two weeks. They might have something to say about that, but it is an interesting proposal.

Stephen Donnelly (Wicklow, Independent)
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Just to be clear, I am not proposing that should be done in the case of schools. However, Deputy Fleming is proposing that something like that would be done on building sites where we have a history of the State paying the money and it not going to those companies. I am simply giving the Minister of State an example of where it has worked in another industry in another country.

Ciarán Lynch (Cork South Central, Labour)
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I may take to posting a notice on the door to the committee room if we do not proceed through the Bill this evening in terms of being efficient, cogent and clear.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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This is a crude device. I do not see the Minister of State accepting this amendment. I am guessing he will knock it out of the park. We should forget about putting notices on sites but there is an issue around the ability of a subcontractor in circumstances where a schedule of payments has been agreed with a main contractor to check that those payments have been processed and made. That is the net point. I do not think there is any serious suggestion that the Minister of State would detail somebody to erect notices across the countryside, but there is merit in being able to tract that.

Michael Creed (Cork North West, Fine Gael)
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Perhaps the Minister of State would examine the idea of a main contractor being obliged to register all his subcontractors with the Department.

Brian Hayes (Dublin South West, Fine Gael)
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We are examining that in terms of a project bank account, which is the point Deputy McDonald raised. These have been established in the UK and, as I understand it, the main contractor and the subcontractors are all referred to and paid out of this designated project account and in that way they know exactly where they stand in terms of the total drawdown funds that the state makes available for that project or group of projects. It is a stand-alone account to which they are named parties, as is the main contractor. That is one way around this. The UK has operated this for some years. We are examining this intensively at present. I think that would resolve the problem.

Michael Creed (Cork North West, Fine Gael)
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Will the Minister of State consider this for Report Stage?

Brian Hayes (Dublin South West, Fine Gael)
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It does not need to be included in legislation. It is a policy decision. We do not need to put it into law.

Ciarán Lynch (Cork South Central, Labour)
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I will take a final comment from Deputy Fleming.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister of State asked me why I referred to State contracting authorities in my amendment. He used that wording to that effect in the legislation and I was using his terminology. The majority of the complaints I received in my constituency regarding subcontractors not being paid related to State contracts. The subcontractors contacted me as a public representative. If a local shop was having development work carried out or a private company was building a housing development and something were to go wrong, that would be a public sector issue but we are in the public domain.

In the case of a public contract such as for a school or swimming pool, for example, the people supplying the materials were probably more confident that they would be paid because the State was writing the cheque to cover the cost of the contract. They know there is a greater element of risk in supplying materials for a new shopping development which is a private speculation. That is why I included the provision to tie it to the State. Most of the people who have come to me were burned by contracts. They might not have supplied the materials if it had been a private development, but in this case the Department of Education and Skills was paying for the building and the cheque should have been guaranteed.

Sub-contractors are fine, but most of the people I met did not know the name of the main contractor. The representatives of the construction industry could explain this better than me. When a contractor is given a job to build a school, he subcontracts the site work, for example, the block work. The main contractor probably has few or no employees and hardly visits the site. The guy who is given the site work contract subcontracts to guys who do the digging or lay the foundations. They, in turn, subcontract the supply of blocks to someone else. There can be six links in the chain to the guy who actually does the work and he only knows the guy who employed him.

Michael Creed (Cork North West, Fine Gael)
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They are all taking a cut.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Yes, they all take a percentage. I hope for a mechanism to cover not just the main registered subcontractors but also to pay the people who work on the job.

Brian Hayes (Dublin South West, Fine Gael)
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It might be useful to have a separate meeting, as it is not part of the legislation. I will have no difficulty in coming back to the committee to have a more detailed discussion on that issue.

It is not our experience that main contractors sit back. They are the people who must deliver the project. It depends on the size of the contracting company and it is common for it to use subcontractors. I do not think it is correct to say main contractors-----

Peter Mathews (Dublin South, Fine Gael)
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They carry the liabilities.

Brian Hayes (Dublin South West, Fine Gael)
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Yes. That they simply wash their hands of the issue is not our experience. However, I agree with Deputy Sean Fleming's other point on volunteer boards of management. He is correct that we are asking volunteers to take on a significant responsibility because the board is ultimately liable for the school under the Education Act. We need to ensure people receive the training and support they require and have the confidence to deliver these contracts properly.

Ciarán Lynch (Cork South Central, Labour)
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How stands the amendment?

Seán Fleming (Laois-Offaly, Fianna Fail)
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It is a very good one.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 12 is out of order as it is outside the scope of the Bill.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 13 has been discussed with amendment No. 5.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I move amendment No. 13:

In page 5, before section 2, to insert the following new section:“2.—It shall be the duty of a state contracting entity to ensure that a social contract clause is inserted into every construction contact that the state contracting entity may award to a prospective executing party.”.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 15 has been discussed with amendment No. 6.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 15:

In page 5, subsection (1), lines 33 to 35, to delete paragraph (a) and substitute the following:“(a) if the value of the contract is not more than €10,000, or”.

Ciarán Lynch (Cork South Central, Labour)
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Amendment No. 16 cannot be moved as it was an alternative amendment.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 17:

In page 5, subsection (1)(b), line 36, to delete “the value of the contract is more than €200,000, and”.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 18:

In page 5, subsection (1), to delete line 42 and in page 6, to delete lines 1 to 3 and substitute the following:“her residence.”.

Stephen Donnelly (Wicklow, Independent)
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I apologise for my absence as I had to ask a parliamentary question. Has the issue relating to the figure of 200 sq. m been discussed? Has the figure of €200,000 been discussed?

Ciarán Lynch (Cork South Central, Labour)
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Yes.

Stephen Donnelly (Wicklow, Independent)
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I apologise for being missing for a few minutes.

Brian Hayes (Dublin South West, Fine Gael)
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All of the limits have been pushed down to €10,000.

Stephen Donnelly (Wicklow, Independent)
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But not the figure of 200 sq. m.

Ciarán Lynch (Cork South Central, Labour)
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No.

Stephen Donnelly (Wicklow, Independent)
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That figure has not been discussed.

Ciarán Lynch (Cork South Central, Labour)
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No.

Stephen Donnelly (Wicklow, Independent)
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I have not tabled an amendment on this issue. Perhaps it might have been resolved through the reference to the money and perhaps both amendments are not required. There is a proposal to lower the figure of 200 sq. m to 40 sq. m. I ask the Minister of State to consider bringing forward an amendment on Report Stage on the issue. There is potentially a loophole being created.

Brian Hayes (Dublin South West, Fine Gael)
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I assure the Deputy that it was not discussed while he was absent from the room. I understand the point he is raising.

Ciarán Lynch (Cork South Central, Labour)
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We discussed the issues of footage and square metres.

Stephen Donnelly (Wicklow, Independent)
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They are linked.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I wanted to raise this issue. There is concern that a loophole would be created in the case of very large residential properties which involve large contracts and substantial sums of money. The resolution mechanism envisaged in the legislation should prove to be efficient and cost-effective. Outside of the loophole relating to very large single residential developments there is the question as to why parties should be denied access to such an efficient, timesaving and cost-effective process. I recognise no specific amendment has been tabled. I hope, however, that the Minister of State will consider this issue again in order that some amendment could be tabled on Report Stage.

Brian Hayes (Dublin South West, Fine Gael)
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I have explained that the thresholds were introduced because of a securities issue. When that issue was highlighted for Senator Feargal Quinn at the time, the view was taken to resolve it. As a consequence, the issue of thresholds would be resolved, as they were linked. Now that the issue of the thresholds has been resolved, this issue was brought to my attention very recently. I do not think it arose from the regulatory impact assessment carried out at the time. I have given a commitment to look at it again in advance of Report Stage. We want to have a fair system for everyone. Without giving a firm commitment, I will look at it again because it was only recently brought to my attention that this could be a difficulty.

Stephen Donnelly (Wicklow, Independent)
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That is very welcome. My understanding is that if one is building something that is less than 200 sq. ft. or 2,000 sq. ft. in old money, one does not have access to the adjudication process which is hugely useful, arguably more so in the case of the small stuff because at the larger scale there are fewer barriers to expensive arbitration. Perhaps it might be taken out.

The figure given to me was that 40 sq. m would be better but it seems that if one is building less than whatever that is - 2,100 sq. ft. - which is most houses, adjudication is exactly what one should be getting access to.

Brian Hayes (Dublin South West, Fine Gael)
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We do not want a situation where people who have a genuine grievance, which cannot be resolved through the adjudication process, find that grievance cannot be resolved. However, we want to get the balance right by having genuine thresholds, which we have on the monetary side. I refer to the argument on the existing 200 sq. m and whether that provides some difficulty. As I said, it was very recently brought to my attention. I gave a commitment to look at it again and I give that commitment to the committee also.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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For the purposes of clarity, should this, along with the issue of the bespoke materials, be something on which the Opposition spokespersons should enter into conversation with the Minister of State's officials rather than second-guessing what he might or might not do?

Brian Hayes (Dublin South West, Fine Gael)
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The issue of the 200 sq. m is not the same difficulty as the bespoke supplies.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am not saying they are comparable levels of difficulty. In the interests of getting all of this right and in the way we have proceeded with this legislation, it would be an idea for us to talk to the Minister of State's officials.

Brian Hayes (Dublin South West, Fine Gael)
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That would be very useful.

Ciarán Lynch (Cork South Central, Labour)
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Amendments Nos. 20 and 21 are related and will be discussed together.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I move amendment No. 20:

In page 6, subsection (1), to delete line 24.

Brian Hayes (Dublin South West, Fine Gael)
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Section 3 deals with payments under the construction contract. Simple contracts can stipulate fixed amounts to be paid at stages, such as the completion of foundations, external walls, roofs, etc. Larger contracts allow for a fixed period between each interim payment. Typically, such payments are monthly. However, the amounts associated with interim payments are not stipulated but are based on progress on site and are tied to rates for elements of the work.

In addition, some contracts may not have a final payment at contract award stage but instead the final payment or total contract sum may not be fully computed until a substantial amount of the work is completed. Such contracts may have a tendered contract sum which both parties are aware is subject to change depending on the actual extent of work completed and the final contract sum is calculated on a re-measurement of the completed work. Deleting line 24 of section 3(1) would remove the discretion of parties to the contract to provide any flexibility under a construction contract and, if limited to section 3(1)(a) and (b), would only reflect the typical range of contracting arrangements.

I note the comments that section 3(1) and (2), which refer to adequate mechanism, may result in uncertainly but I suggest it is important to permit parties to make their own contractual arrangements. Under section 3(1) the parties can simply make arrangements for stage payments but this may be unsuitable in cases. Parties would be in a position to agree on how the stage payments would be calculated but it may be unduly restrictive to prevent this.

Obviously, if parties are allowed some leeway to make their own arrangements, this involves a value judgment on whether it is adequate but this may be a matter for the courts ultimately. Of course, it is a matter of policy whether to allow this flexibility.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Whatever about affording a level of flexibility within the contracts, I would be concerned that this opens up an exit clause or a level of ambiguity in respect of pay out on the contract terms. That is why I tabled my amendment. The genesis of this legislative initiative is that promises were entered into with sub-contractors but were not met and people were left high and dry. My concern is that there is almost a get out clause in this legislation. It states, "shall provide for each interim payment and shall provide for the amount of the final payment to be made under the construction contract or for an adequate mechanism for determining those amounts". That is not just flexible but is extremely fluid in respect of placing obligations on the party concerned.

Brian Hayes (Dublin South West, Fine Gael)
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The concern we have is that by deleting the line in question, it makes all rulings virtually applicable on subsections (a) and (b), that is, the amount of each interim payment to be made and the amount of the final payment. Not all cases fall under those two categories - that is the point. There are other circumstances in any contractual relationship where they may not. If one takes out the words "or for an adequate mechanism" for determining these amounts, it becomes very rigid. While they might not be the majority examples, there might be other minority examples which I understand apply in certain circumstances. That is the concern we have with this. There needs to be some flexibility. What the Deputy proposes to do is to take that out.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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To try to be helpful, can I suggest that is something we might consider before Report Stage? If we look at the wording, instead of saying "or for an adequate mechanism" for determining these amounts, could we consider the words "and for an adequate mechanism" for determining those amounts? We can talk about this again because I take the Minister of State's point on the flexibility.

Brian Hayes (Dublin South West, Fine Gael)
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If one takes out "or" and puts in "and for an adequate mechanisms for determining these amounts"------

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Does the Minister of State see my concern? My concern is that "or" gives one an absolute out in respect of the interim payments.

Brian Hayes (Dublin South West, Fine Gael)
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Can the Deputy see my concern that by taking the line out-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I understand the Minister of State's concern about taking the line but I am trying to-----

Brian Hayes (Dublin South West, Fine Gael)
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Let us look at that again.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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We will come back to it.

Brian Hayes (Dublin South West, Fine Gael)
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I move amendment No. 21:

In page 6, subsection (5), line 42, after "contract" to insert the following:
"(done otherwise than as part of a mechanism for determining the amount due)".

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will the Minister of State clarify that again? He is saying the person can now be paid when the work is certified. What happens if the person who is to certify the work is slow to do so and is somebody the main contractor uses regularly to certify work but who takes his time? There is no time limit specified for the person to certify the work has been done. There is an intermediary there to help but sometimes an intermediary might not be as helpful to the person waiting for payment as they might be to the person who is paying them.

Sometimes an intermediary might not be as helpful to the person waiting for a payment as they might be to a person who is paying them. What mechanism has been included to ensure the person who is to certify the payment will do so in an expeditious and fair manner?

Brian Hayes (Dublin South West, Fine Gael)
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My understanding is a contractor does not retain the certifier. In fact, it is separate entirely to the process. The contractor does not use a certifier for that.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am still not sure what the Minister of State is saying.

Brian Hayes (Dublin South West, Fine Gael)
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By taking this out?

Seán Fleming (Laois-Offaly, Fianna Fail)
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Can the Minister of State go through the note again, slowly?

Brian Hayes (Dublin South West, Fine Gael)
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This is a clarifying change for the avoidance of doubt. Typically, payments under a construction contract are conditional upon a certificate of payment being issued by the named certifier under the contract. If section 3(5) were not amended, it might not be clear that this provision complies with the provisions of the Bill.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Who pays the certifier?

Brian Hayes (Dublin South West, Fine Gael)
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The employer.

Seán Fleming (Laois-Offaly, Fianna Fail)
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That is what I am coming at. Does anyone certify the payment for the subcontractor? This seems to be between the awarding authority and the main contractor.

Brian Hayes (Dublin South West, Fine Gael)
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That is between him and the main contractor.

Seán Fleming (Laois-Offaly, Fianna Fail)
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There is no cover here as between the subcontractor and the main contractor. The main contractor has cover. He gets paid when his payment is certified. The essence of the whole Bill is to help subcontractors rather than main contractors to get paid. We are assuming most main contractors get paid. The issue and the genesis of the legislation is not to guarantee the protection of the payment to the main contractor, which must happen. Nothing can happen if the main contractor does not get paid. While the essence of the Bill is to ensure subcontractors get paid, the Minister of State appears to be clarifying the mechanism to ensure the main contractor is paid by the awarding authority. I thought our emphasis today was to guarantee-----

Peter Mathews (Dublin South, Fine Gael)
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Through the Chair, where a quantity surveyor certifies an amount of work done by the main contractor, by implication the work carried out by the subcontractor, which is part of that overall work, will have been certified also.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Where does the subcontractor come into this? Is the certificate of use to the subcontractor? It is not. It is useful only to assist the main contractor to get his cheque drawn down. I am trying to get a mechanism. The work is ongoing for-----

Brian Hayes (Dublin South West, Fine Gael)
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I am not sure I understand Deputy Fleming's point.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The subcontractor is on the site for six months for a big job. The main contractor will get paid as the certificates are produced to show that the work is at a certain point. He will get staged payments. The purpose of the Bill is to ensure the staged payments get passed on to subcontractors. Is there a mechanism in the Bill for a certification on behalf of the subcontractor doing block work or ground works where he has completed 20%, 40% or 60% of the work?

Brian Hayes (Dublin South West, Fine Gael)
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I think we are talking at cross purposes. I will keep it simple. The way a subcontractor agrees the contract with the main contractor is not relevant to the Bill.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thought that was the sole purpose of the Bill. The Bill is not about helping the main contractor. It is about helping the guy at the bottom of the food chain to get paid. It is not about the main guy.

Brian Hayes (Dublin South West, Fine Gael)
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The objective of the Bill is to ensure people get paid on time and to provide for an adjudication process where there is a dispute. What we are trying to obtain from the legislation is very net. The arrangements people come to as to how they are paid is a matter entirely for them to negotiate in contracts with the main contractor.

Seán Fleming (Laois-Offaly, Fianna Fail)
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We are here because that system is failing. People would not be looking for money if that system worked. That is the genesis of the concept behind the Bill.

Brian Hayes (Dublin South West, Fine Gael)
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The Schedule makes provision for all of the payments. There is now a legal provision for this. Where a person cannot get paid, an action will be taken under the adjudication process, presumably.

Seán Fleming (Laois-Offaly, Fianna Fail)
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We will come to that later on.

Brian Hayes (Dublin South West, Fine Gael)
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Is the Deputy happy now?

Seán Fleming (Laois-Offaly, Fianna Fail)
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We will not go that far. We will move on.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I move amendment No. 22:

In page 7, subsection (6)(a)(ii), line 7, to delete "the presentation of a petition to wind it up".

Brian Hayes (Dublin South West, Fine Gael)
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The presentation of a petition to wind up a company is an important tool for subcontractors and suppliers. It provides a means for them to seek compensation in the event of non-payment. Similarly, it is an important indicator of a company's financial standing. I have been advised, therefore, that the definition included in the Bill covers the appropriate level of insolvency situations. This is one of a number of indicators used in all public contracts as a gauge of a company's financial standing.