Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

The concept of tendering for State contracts is, in principle, a worthwhile one. There is an obligation on the Government to get the best possible value for taxpayers' money. However, a number of issues are arising on foot of the manner in which the State's procurement process is being implemented. Ireland has a small, open economy and has vulnerabilities other EU countries do not share. The size and scale of the economy is putting Irish contractors at a distinct disadvantage. The fact that the low threshold for all State contracts is €135,000 means virtually everything a State controlled body does falls into the public procurement system. The local Irish supplier of goods and services who is not, in general, on the same scale as multinational companies is loaded with the huge costs of preparing a tender. In some cases, it can take a staff of dozens to fulfil the obligations of the tender process.

I turn to the example of a supplier of fruit and vegetables to the Garda College who had been supplying the college for decades but had his application turned down on the basis that he had no written plan in place as to how he could continue to trade in the event of major flooding or storms. Does that make the Minister of State feel comfortable about the process? I can given him numerous other examples where bureaucracy has superseded common sense. Local businesses, whether small, medium or large, are being frozen out of the system. We are losing jobs in Tipperary because of it and I am sure it is the same right around the country. The only avenue left open to local businesses is to act as subcontractors to the companies which are awarded the main tenders. It is at this point that local companies find themselves cornered and disadvantaged. Another company in Tipperary was subcontracted into a State-contracted construction project. The main contractor had one employee on site while the local subcontractor had 12. The local company was carrying all the responsibility for employment contracts and health and safety but was not benefitting from ownership of the main contract. In fact, the main contractor could not complete the contract, went into liquidation and left the local company with a huge outstanding debt.

The Minister of State must agree that it is unacceptable to put Irish companies at risk like this. Surely, something must change. In another example, block-layers and plasterers were subcontracted into another local authority construction project. Within weeks, the main contractor went into liquidation leaving the block-layers and plasterers with no payment for work done. I checked with the local authority and found that it had paid the main contractor €400,000 and was happy that its engineers had confirmed that €400,000 worth of work had been completed. The local authority had no legal option other than to pay the money to the main contractor while the subcontractors had funded the €400,000 worth of work. This is hard evidence that the current rules are not working. They allow multinational companies to tender for work with competitive pricing on the backs of local companies. We are losing jobs because of this and it is, ultimately, costing the State a fortune. Any analysis will surely show that there is little gain on one side of the balance sheet while we are losing a fortune on the other. The status quois not an option. There must be some protection for local Irish companies.

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