Dáil debates

Thursday, 9 December 2021

Regulation of Tenderers Bill 2021: Second Stage [Private Members]

 

4:15 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Ar dtús báire, I commend Deputies Mairéad Farrell and Patricia Ryan for bringing forward this timely, well-drafted legislation. The Regulation of Tenderers Bill 2021 would ensure that some of the problems that have arisen from the gross mismanagement of projects such as the national children's hospital, mismanagement that we are, unfortunately, all too familiar with, does not happen again.

This legislation provides specifically for two important regulations. It would put in place a system for identifying abnormally low tenders and then disqualifying them from the selection process for a public contract, if the contractor cannot provide a credible explanation for its bid and how it would be achieved. This is vital, as abnormally low tenders are warning signs of contractors lowballing bids, with a likely consequence of cost escalation further down the line. Unfortunately, we have had far too many examples of this in our State. Who picks up the tab in these cases? Unfortunately, it is the Irish taxpayers.

Section 2 provides for the mechanism for identifying abnormally low tenders for public work contracts. These mechanisms are robust, work successfully in other jurisdictions and offer clear guidance for Departments and contracting authorities.

Section 3 allows for the regulation and disqualification of abnormally low tenders. If a tender bid is identified as abnormally low and if an explanation from the contractor fails to adequately demonstrate how the price could be delivered, the contracting authority would then disqualify it. It will also put in place a system for identifying and disqualifying contractors that have shown significant and persistent deficiencies in prior public contracts. That is a crucial section and provision in this Bill.

Section 4 allows for the contracting authority to exclude those contractors who have ripped off the State and shown consistent deficiencies in previous public contracts. Both of these regulations would have gone some way towards protecting the taxpayer and the State from the debacle at the heart of the National Children’s Hospital, NCH, and would put in place a robust system to safeguard the public purse and to deliver capital projects at cost. The fact that neither the Minister for Public Expenditure and Reform, Deputy Michael McGrath, the Minister for Health, Deputy Stephen Donnelly, nor, indeed, any Minister in the Cabinet, including the Minister of State sitting opposite me, can tell the Houses of the Oireachtas at this stage in 2021 the cost of the National Children’s Hospital speaks loudly as to why it is so crucial that this legislation, drafted by the Deputies I mentioned, is debated and enacted in this House.

It is worth noting that this Bill simply enforces regulations already provided for in EU regulations on the awarding of public contracts. Governments, now and in the past, have abjectly failed to implement these regulations, with no evidence that any circulars or guidance notes have been issued from the Department of Public Expenditure and Reform to Departments or contracting authorities on their provision. These regulations are in place in the North, however, and with some considerable success. Indeed, these regulations are implemented by the Department of Finance there, under my party colleague, the Minister for Finance, Mr. Conor Murphy. I also welcome the announcement by the Executive in the North that it has approved and awarded a living wage. Unlike here, that means that all those employed in the public sector and Civil Service in the North will be provided with a living wage. Not only that, those who provide ancillary services to those buildings must also be paid a living wage.

Furthermore, that provision includes all public contracts awarded in the North. I mention this aspect to the Minister of State because the money we spend on public contracts can be used for greater social good. In the North, all winning tenderers for public contracts will now have to show that they are also living wage employers. In April 2019, in a response to a parliamentary question tabled by my party, the then Minister for Public Expenditure and Reform, Deputy Donohoe, informed us that no economic operator had been disqualified since 2014 on the grounds of abnormally low bidding. I ask the current holder of that portfolio to update us in respect of whether that is still the case for every Department. This legislation would sharpen how and to whom we award public contracts and, crucially, it would defend the Irish taxpayer in the process. Similarly, I ask the Minister for Public Expenditure and Reform, Deputy Michael McGrath, to inform the Dáil of how many economic operators have been disqualified from a tender process on the grounds of poor past performance. I am sure that there are many who should be struck off as a result.

Successive Governments have destroyed public confidence in the ability of the State to deliver capital projects on time and on budget due to a history of overruns. Unfortunately, we are seeing the debacle of the National Children’s Hospital reopened, with the information given to this House simply being either misleading or untrue. We also now see that the consortium has very little skin in the game in respect of the national broadband plan, NBP. It has only put €500,000 of investment into the project and only €2 million in equity, as opposed to €220 million. The €98 million is made up of loans. Crucially as well, the commitments and assurances that the Irish taxpayers were given by Ministers, through this House, that no money would be expended by the taxpayer until milestones had been achieved and the full equity had been put in is simply not true and does not now hold up to scrutiny. Indeed, we see that the Minister of State’s party colleague has actually allowed that contractor to take the €20 million, was a reserve and a confidence provision for the taxpayer, and draw it down. We also know, through the Minister, that significant amounts of taxpayers' money have been put into this project without the full equity being installed and, crucially, the Government has also allowed the company to draw down taxpayers' money without a single home being connected to the scheme. That really sums up all of what is wrong regarding the awarding of public contracts and the need for this legislation, drawn up by Deputies Patricia Ryan and Mairéad Farrell, to be taken on by the Government and supported. It can be tweaked, if need be, on Committee Stage, as we do with all legislation, and then enshrined in law.

The State has a history of overruns with public contracts. For example, the Dublin Port Tunnel involved an overrun of 160% on its initial budget. It was a total of €500 million of an overrun. The construction of the first Luas lines had an overrun of 289% and a budget cost to the tune of €600 million. As I mentioned, the national broadband plan project has seen the cost rise from an initial €500 million to almost six times that in official estimates, at a reported cost of €3 billion. Yet, we cannot afford HEPA filters in our schools or free antigen tests. The Government is opposing this Bill, but, by God, this is about saving not millions of euro but potentially billions of euro for Irish taxpayers in the future. The Government will still try to find holes in and poke at this legislation.

The National Children’s Hospital’s is the largest capital investment project ever undertaken in Ireland’s healthcare system. Since the project was established, the estimated cost of this investment has doubled. In 2013, the estimated budget for construction was €790 million and the latest estimate now is €1.9 billion, with the Minister unable or unwilling to give an updated figure. That is actually a laughable situation. We have a Department of Public Expenditure and Reform that cannot tell us the cost of the biggest healthcare contract awarded in the history of the State. Seriously, there is something wrong here. Go into any primary school and talk to fifth or six class students and they would tell us that we have a problem with this contract if we have a Department of Public Expenditure and Reform that cannot tell us what the ultimate cost of this project will be. We have a problem with how we award contracts and with how they are designed, and those are problems that this legislation can start to deal with.

This legislation is about enforcing regulations that will deliver value for money for the taxpayer and protect the taxpayer by ensuring that economic operators that perform badly and that fail to deliver on quality, on time and within budget can be disqualified from future contracts. It would also provide that companies that lowball bids with the intention of ramping up costs down the line can be identified and disqualified. The taxpayer should be defended. That is what this legislation is about and that is what Deputies Mairéad Farrell and Patricia Ryan are doing here. This legislation is concerned with ensuring that value for money should be delivered and this Bill should be supported by everyone in this House. This legislation will go some way towards remedying the incompetence that we have witnessed in public project delivery and it will protect the taxpayer.

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