Mr. A.J. Noonan:

I will give a good example of quality versus price. In the past year the Health Service Executive, HSE, awarded a contract for a machine in a hospital. The unsuccessful bidder was 12.5% below the price.

I made the point that it was way off the mark and was the same machine. He said his machine had a life cycle of 20 years, but the machine that was bought has a life cycle of two years and parts would not be available in two years time. It is a good example of the quality issue.

One of the major issues in regard to unbundling is that 50% of Irish companies only operate within a 25 km radius. They will not tender for any business unless it is regionalised and in much smaller lots. They will not bother tendering for business, because it is outside their comfort zone. I understand another 40% operate within 100 km. Many companies do not get a chance to tender because it is outside their comfort zone. The unbundling, regionalisation and disaggregation of contracts is necessary. The Minister's predecessor supported that, and I pay tribute to Deputy Perry.

There is disengagement with the system. Reference was made to training in SMEs. The first people who should receive training are those working in procurement. They have no training in procurement and are awarding contracts willy-nilly. Many go for the lowest bid and keep things simple. They will say their job is to get savings for the Exchequer, but they are not doing that. They are doing the polar opposite. If the Committee of Public Accounts was so minded, it could do an exercise on some of the contracts that were awarded over the past year or 18 months. It will find there were no savings. Ms Fleming will discuss predatory pricing.