Arthur Spring (Kerry North-West Limerick, Labour)

I thank the Ceann Comhairle for choosing this topic because although we are creating work, we are not necessarily creating jobs. I will elaborate on that.

The Road Safety Marking Contractors Association, RSMCA, was established within the Construction Industry Federation in 1998. It comprises the leading road marking contractors in Ireland. They provide direct employment to an estimated 400 people. The association's members are typically family-owned companies carrying out their work as main contractors for all the local authorities and the National Roads Authority and as subcontractors to civil engineering and road-surfacing contractors. These companies make a valuable contribution to the safety of roads in some very hazardous environments and the quality of their work is only to be commended. This work is paramount on many fronts and it is contributing to the decrease in the number of deaths on the roads.

During recent years, the association has noted a marked increase in the number of non-resident contractors being awarded work by local authorities for both road marking and road surfacing and a lack of effort by all public procurement bodies to ensure that all contractors or subcontractors, irrespective of where they are based, are fully compliant in respect of working in the Republic.

I am concerned about non-compliant contractors tendering and carrying out work on behalf of local authorities. They are competing with Irish-owned companies but have a lower cost base than those companies. Under the public procurement procedures of the Department of Finance, all contractors, including subcontractors, carrying out work on behalf of all local authorities must comply with the registered employment agreements. This ensures there is a level playing field for all competing tenderers in public procurement in regard to rates of pay and compliance with construction workers' pension schemes and revenue regulations. Employers are contributing €28 per week for each employee to the CWPS, while employees are contributing €24.50 per week. Foreign-owned companies have a distinct advantage as they may not be obliged to meet such pension requirements.

Failure to comply with the requirements is an offence under section 32 of the Industrial Relations Act 1946 and section 10 of the Industrial Relations Act 1969. Therefore, there is an obligation on all procurement authorities to ensure there is in place a robust and transparent administrative procedure when awarding contracts. The policing of these procedures falls upon the NERA, the CIMA and the local authorities but this is either not being done or being done through self-certification. Self-certification means a company signs a document stating it is compliant but it does not have too furnish any proof of this. It is the burden of proof that ensures non-compliant contractors must comply with relevant legislation. In certain instances, the local authority checks only that the main contractor is compliant and dismisses any requirement to check that all subcontractors on site are compliant. Compliance with the arrangements imposes a considerable cost on companies tendering for public procurement contracts, and the lack of enforcement of the legislation gives an unfair advantage to non-complying contractors coming in from abroad.

The association met Mr. Deering of the NERA last year to discuss this issue. The NERA has no powers to act against out-of-State contractors. This means non-compliant contractors can work without fear of prosecution. An integral part of the procurement process is the use of framework contracts, whereby a number of contractors who are pre-qualified participate in a framework agreement. Framework agreements typically last two years. It can cost considerable time and effort to pre-qualify for a framework agreement but it is the experience of the association's members that an integral part of the pre-qualification process is an interview with each tenderer to ascertain that the information submitted on the pre-qualification document is factually correct. However, I have been informed that no member of the RSMCA has ever attended such an interview, yet some of its members are pre-qualified in respect of a number of framework agreements.

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