David Cullinane (Waterford, Sinn Fein) | Oireachtas source

It is important that we allow Bills to pass Second Stage and be properly scrutinised on Committee Stage. That is the reason there are several Stages in debating legislation.

Before dealing with the parts of the Bill I disagree with or about which I have concerns I will focus on the provisions with which I agree and which are the reason I am keen to have the Bill proceed to Committee Stage. Its overall aim is one we share, which is to allow public bodies to have regard to the economic, social and environmental well-being in connection with public procurement contracts and, by doing so, increase competition in public procurement tendering by enhancing the ability of SMEs to compete for tenders. The Bill will do this by requiring public procurement contracts to contain a community benefit requirement, with the definition of community benefit to include employment sourced locally as well as allowing the involvement of locally sourced services via SMEs. We have called for this in the past. In fact, we have proposed similar Bills in the past, although in the social clauses we included a requirement to recognise trade unions, a stronger commitment to apprenticeship where feasible and a stronger commitment to employ people who are currently on the live register. It is welcome that the link between public procurement contracts and local community benefit is to be given a statutory footing, and I welcome the Minister's comments in this regard. We can argue over the definitions and methods on Committee Stage, but at this Stage it is enough for us to vote for the Bill and see it progress towards enactment.

However, there are problems with the Bill. First, the link between community benefit and SMEs is quite weak. SMEs are to be treated as one of a number of interested parties, not as potential bidders which are in danger of being shouldered out of the process by multinationals. As long as multinationals commit to training, recruitment and youth employment the awarding body can ignore local SMEs. There is no specific legislative commitment to local SMEs in the Bill, not least a commitment that would see their local status to carry more weight than multinationals in being awarded a contract. The Bill could easily facilitate multinationals hoovering up public procurement contracts by simply throwing a couple of apprenticeships on top of what would be a sop to community development. Furthermore, the definition of what constitutes community development is left to the Minister to decide. At present, a friend of privatisation and multinationals, the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, is the Minister with responsibility. In fact, the Bill is so weak in giving a statutory footing to locally based SMEs over multinationals that it reads more like a well-meaning motion than a legislative measure.

This leads to the second problem I have with the Bill. Before we discuss improving and bringing additionality to the current public procurement rules, we must first look back on how public procurement rules work in practice and what levels of compliance and non-compliance exist in the public sector. The Bill ignores the serious problems with the public procurement process as it stands. To put it bluntly, the rules are ignored. Public procurement involves the purchase of billions of euro worth of goods and services by the State. While there are rules and guidelines, there is insufficient oversight and sanction.

The Comptroller and Auditor General has consistently pointed to breaches in public procurement rules. The Comptroller and Auditor General sets out the rules as follows: EU directives set out advertising requirements and tendering procedures for contracts above certain thresholds that must be applied by all public bodies involved in procurement; for contracts or purchases below these thresholds or values, the following national procedures apply - supplies or services costing less than €5,000 in value may be purchased on the basis of verbal quotes from one supplier or competing suppliers; contracts for supplies or services between €5,000 and €25,000 in value should be awarded on the basis of responses to specifications sent by fax or e-mail to at least three suppliers or service providers; and goods and general services sought that are expected to have a value of €25,000 or more should be advertised publicly on the eTenders website. The Comptroller and Auditor General reports that public bodies are expected to comply with the relevant rules as a condition of their public funding. In general, they are required to confirm annually that they have been compliant. Where there has been a material level of non-compliance with the rules, they are required to disclose that fact in their statement on internal financial control, SIFC, and to give an outline of the steps taken to remedy the situation. In general, the Comptroller and Auditor General draws attention in his audit certificates to disclosures of material non-compliance with procurement rules only involving contracts worth €500,000 or more.

The problem is that there is no sanction, penalty or consequence for a public body that breaches the rules. All the body must do is state in its audit that there is non-compliance. Then nothing happens and nothing changes. That is a serious problem. The Comptroller and Auditor General has reported on the level of non-compliance over many years. I will list the breaches in 2012 and 2013. In Vote 6 for the Office of the Chief State Solicitor there were seven contracts with a total value of €720,000 in which there was non-compliance. In 2012, there was non-compliance relating to goods and services with a total value of €663,267. In Vote 13 for the Office of Public Works in 2013 contracts worth a total of €1.3 million were non-compliant and in a contract in excess of €500,000 in 2012 there was non-compliance. In Vote 20 for An Garda Síochána in 2013, in 56 contracts with a total value of €5.9 million there was non-compliance and, in 2012, there was non-compliance in 50 contracts with a total value of €5.3 million. In Vote 21 for prisons, there was non-compliance in 13 contracts with a total value of €786,764 and in 2012 there was non-compliance in ten contracts with a total value of €959,000. In Vote 39 for the HSE, there were 116 cases of non-compliance with a total value of €17.8 million, and in 2012 there were 32 cases with a total value of €3.3 million. There are also examples in the Courts Service, the Department of Education and Skills, the Department of Foreign Affairs and Trade, the Department of Agriculture, Food and the Marine and the Department of Social Protection. The list goes on and on.

There were also audit certificate references in 2012 and 2013 in other State bodies which showed non-compliance, including the National University of Ireland Maynooth with eight contracts worth a total value of €824,000, Athlone Institute of Technology with eight contracts worth a total of €1.7 million, Limerick Institute of Technology with nine contracts with a total value of €5.1 million, the Institute of Technology in Blanchardstown, St. Patrick's College, Drumcondra, Dublin Docklands Development Authority, Bord na gCon, Horse Racing Ireland and the Central Bank of Ireland. The list is lengthy.

The Comptroller and Auditor General also reported on failings in 2015, in which he again referred to non-compliance with public procurement rules. These involved the Health Service Executive, Tusla - Child and Family Agency, St. James's Hospital board, the Road Safety Authority, Dublin City University, Institute of Technology Tralee, Dublin Institute of Technology, Ollscoil na hÉireann Gaillimh, University College Cork, Coláiste Mhuire gan Smál Ollscoill Luimnigh, Trinity College Dublin, Limerick Institute of Technology, the Institute of Technology Tallaght, Dundalk Institute of Technology, the University of Limerick, St. Patrick's College of Education, the National University of Ireland Maynooth, University College Dublin, the Dublin Docklands Development Authority, the Nursing and Midwifery Board of Ireland, the Commission for Communications Regulation and the Foyle, Carlingford and Irish Lights Commission - the Loughs Agency and the Lights Agency - in 2012.

These are examples of non-compliance, which means there was insufficient competitive tension in many of these contracts worth billions of euro. The Comptroller and Auditor General points out that if there was sufficient competitive tension and proper adherence to the rules, there is the potential to save tens of millions, if not hundreds of millions, of euro.

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