Oireachtas Joint and Select Committees

Wednesday, 21 January 2015

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Operations and Functions: Office of Government Procurement

2:30 pm

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome Mr. Quinn and his colleagues. I will not make an opening statement. I will ask questions and if Mr. Quinn does not have sufficient time to respond, I ask him to forward his responses to the committee in the next day or two. He said €8.5 billion out of current expenditure is spent annually, €5.8 billion of which is addressable by procurement. Will he explain the other €2.7 billion that cannot be addressed by procurement? He said the capital expenditure programme, which is valued at €3.5 billion, is not included in his office's work. Why not?

He stated the EU Commission report "highlights the competitive nature of the Irish marketplace and the open nature of Irish public procurement in that context". That is the particular problem Irish companies face. "Open" means open to companies outside Ireland to bid. That is where Ireland is losing out. I tabled a parliamentary question asking the Minister why we were not at the European standard in terms of businesses in Ireland getting business from Irish public bodies and he replied that this was because all our documents are printed in English. Companies in every country are familiar with English and are well able to tender and bid for our contacts whereas in Italy, France, Greece and Spain procurement documents are printed in the home language, which is not as readily accessible by companies in every other member state. I would like Mr. Quinn to address that issue because I was surprised by that comment. If we published the documents in Irish and helped Irish people to translate them in some way, we might keep some of the others out, as they successfully do in other countries by using their native language.

Will Mr. Quinn confirm that commercial semi-State bodies are not covered by his office? That is the largest gap in his operation. I acknowledge these bodies have a commercial mandate. I will not even mention how much Irish Water is supposed to spend but if that does not come under procurement rules, where are we going?

Mr. Quinn mentioned the Department of Health but another significant gap relates to the procurement of drugs and medicines. The HSE, which is not covered by the OGP, is not competent and it is afraid of the large pharmaceutical companies. It goes cap in hand to them because they are significant employers. Has Mr. Quinn examined his office taking over responsibility for procurement in this area and perhaps working with an equivalent officer in another member state to jointly procure? I do not accept, nor does anybody in Ireland, that we are getting value for money in this regard. Part of the reason for this is we feel a little insecure in putting it up to large employers and we are afraid to upset them. Perhaps if the OGP worked with a similar office in England, France or Spain, a better deal might be achieved.

Mr. Quinn made no mention of the cost of his office, the number of staff and the break even period. It obviously cost tens of millions of euro to set up the operation. Will he provide the figures?

Everybody wants social clauses included in contracts. When will he review the 11 projects under way? Will that be at the end of the contracts, which could be a few years away?

When Mr. Quinn visits the Department of Education and Skills with a procurement list, there is a breakdown in communication between his office and some schools. The procurement list includes photocopying paper, pencils, rulers, IT equipment and so on and schools are told they must operate from the list unless they can get a better deal locally. Schools use the supplier on the list as the nominated supplier when they want items that are not on the list that were tendered for. The school principals are being rolled over for the additional items not on the list when they order online. Will Mr. Quinn address this?

I refer to the links to payment. It is fine for the OGP to have a role in procurement but does it have a role in making sure the payments correspond with the procurement contracts, given there are overruns all over the place?

Shame on the Department of Jobs, Enterprise and Innovation because the Construction Contracts Act 2013 has not yet been implemented. There is, therefore, no protection for subcontractors in public procurement contracts. The Act was passed two years ago, having been on the legislative list for five years. Officials are fluting around over which Department should be responsible or who should be the chair of the bodies that come under it. The industry came under the remit of the Department of Finance for years but it is now under another Department and years later there are no agreed chairmen and mediation procedures in place. The OGP is deliberately dragging its feet. If there was a will to implement the legislation, it would have been implemented.

When will the public contracts review be completed? Mr. Quinn said that perhaps this might happen next year. Are zero energy contracts being considered in buildings such as schools? The office should be working towards energy efficiency.

Does his office examine the payment record of companies that tender? That has been a problem. It is known that directors of many of the companies that won contracts operated through different shelf companies and did not pay people in the past. They produced financial statements, accountants' reports and tax clearance certificates but one will know in one's heart that these are not honest people but the OGP is trapped in having to award them contracts. The payment record of the principals of companies must be factored in. The office should have a mechanism to track that.

That is my series of questions. I am happy with that and if Mr. Quinn runs out of time, I would like the answers to the other questions forwarded to the committee.