Dara Calleary (Mayo, Fianna Fail)

There is not a Deputy in the House who has not spoken to a subcontractor in difficulty. The worst thing of all is when a subcontractor is let down on a State contract, whether with the HSE, a local authority or third level institution, that he or she thought was gold plated. If the Bill can be enacted before the summer recess, we will have done some service.

I cite examples of why the legislation is necessary and would like to move away from technical language what happens in to real life. Like all Deputies, I know of large household name contractors which have gone under in the course of carrying out a contract. We must stand back from the legislation and ask questions about procurement law and tendering processes that have encouraged the submission of the lowest price contracts and poor examination of what makes up a tender. In some cases, there was a poor assessment of a company's ability to deliver on a contract. The practice of using turnover thresholds, excluding companies under a certain level of turnover from applying for certain contracts, is also flawed. A contractor might have a large turnover from building large numbers of houses but be incapable of building a school or completing a large-scale engineering project. When the job has been done, the Minister of State might take a look at the issue of procurement which is, rightly, linked with a jobs strategy. We must ask ourselves if we are getting the best bang for our buck, in terms of what the Government is spending on job creation measures.

On my desk I have the case of a sub-contractor who started work on a health care facility. The main contractor went under and the subcontractor was left €150,000 short. He does not have that money. The promoters of the project went back to the HSE which retendered and the project is under way again. However, my constituent is still short his €150,000. He can hardly afford to buy the newspaper to see the project advertised, much less have the capacity to resubmit a tender. Another subcontractor is putting seating into a local authority theatre. The main contractor went under, having been paid by the local authority, but the carpenter was not paid. He was able to take that hit and started a second project. However, another main contractor went under, again on a local authority project, and the carpenter could take a second hit. Six workers were laid off and talented people whose skills we need have left the country. One assumes Government contracts are gold plated and have an insurance policy built in.

Sections 5 to 9, inclusive, of the Bill are crucial. The danger lies in informality in the sector and the "Dúirt bean liom go ndúirt bean léi" way of doing business. I hope the experiences of subcontractors in the last three or four years will get rid of that informality forever. It has led small contractors to depend on big names which never let them down but did not put anything in writing. If we implement the Bill, a health warning must be issued with it to the effect that these sections are being included because of people's experiences. Whatever the practices were, the language of the Bill must formalise the practices that may have served us previously.

Section 3 is particularly welcome. It strikes me as odd that subcontractors allowed amounts of money to build up. For example, €150,000 is a huge amount of money. In that case, the subcontractor probably thought "it would never happen to me". It is a huge amount of money to which to be exposed on a relatively small contract. The practice of "pay when paid" must be got rid of and the change must be enforced. Who will enforce the measures included in the Bill? We can make legislation, but enforcement and breaking what has been a culture for decades in the construction industry will be a bigger job.

The Minister of State's commitment to address amendments on Committee Stage is fair. I also acknowledge the contribution of his party colleague, Senator Paul Coghlan, who spoke strongly in the Seanad, particularly on the issue of thresholds. It is probably not possible to include every contract in the legislation, but the thresholds prescribed in the Bill are too high. Given the current cost of construction, contracts are now 40% or 50% lower than they were six or seven years ago, which is to be welcomed, but the thresholds envisaged in the legislation need to be changed to reflect this.

The question of supplies is complex. It is easy to go into a theatre and take out seats, but one cannot take out concrete. The Irish Concrete Federation has come up with an interesting definition and referred to suppliers of construction products and materials that are "irretrievable due to their incorporation in the structure of the building". That would cover much ground work, concrete and bricks that cannot be taken away as one can take away other things from projects.

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