Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank the Deputies. I will address one or two of the points raised. Deputy Farrell raised the question of cost overruns. They are real and on particular projects there have been some dramatic overruns which have been the subject of investigations. We can learn from those and make sure we do not repeat them in the future. It has to be borne in mind that when we are comparing the cost agreed and the actual cost outturn, we need to compare the irrevocable contract price that was signed on the tender, not the price that was discussed by project proposers years earlier at the start of the process. Sometimes a road might be proposed for €100 million but by the time it goes to tender and goes through everything, it is signed at €500 million and comes in at €600 million. That is an overrun of €100 million. The final cost can be compared with whatever was the imaginary, guessed price before the contracts come in, but nobody knows what a project really costs until the bids have come in under tender. That is not to say that cost overruns do not happen. They do.

Deputy Farrell is looking for new objective criteria for what is an abnormally low tender. There is a problem if we are saying that the contracting authority can use its discretion to decide what an abnormally low tender is, particularly where there is a small number of bids. That is not an objective way to go about it.

Deputy Nash talked about the problem of bogus self-employment, as did Deputy Cronin. Bogus self-employment is dealt with under the public works contracts. Contractors who are not complying with employment law may have deductions applied to their payments under the contract. Enforcement of labour laws is a matter for the Workplace Relations Commission. Public works contracts require the contractor to retain extensive records with regard to payments to all workers engaged on site.

Deputy Stanley talked about companies with no track record winning bids. This Bill does not address that, however. What this Bill addresses is poor past performance. We are limited by European law in how we can exclude people for poor past performance. The limit is that we can exclude somebody who bids for a contract if they have poor past performance, but only where we have direct evidence of it. For example, has the company been convicted of non-compliance with contract? Is there a judgment against it? Where it is simply a case that it was a nightmare to work with that contractor and we were constantly fighting with them, we cannot exclude them under European law. If it was private procurement, we would. If I previously had painters in and had been fighting with them all the time, I would not hire them to paint my house a second time. However, under public procurement we are obliged to be non-discriminatory and not to exclude people unless we have actual evidence that they have underperformed.

I outlined in my earlier contribution the issues that the Government has identified with the Bill. The existing regulations already contain carefully balanced provisions drafted in the context of the rights and obligations of both contracting authorities and economic operators. The Bill seeks to shift that balance, which may not necessarily result in a better outcome for the economic operator, the contracting authority or indeed the taxpayer. Also it is not clear how the oversight role of the chief procurement officer in the Office of Government Procurement, OGP, proposed in the Bill will fit with the public spending code and with the devolved authority to Accounting Officers in managing expenditure. The Accounting Officer is the person responsible for the expenditure of any given Department. If a Department that has a huge contract that overruns the price and there are problems with the way it was specified in the first place, the Accounting Officer is the person who has to go before the Oireachtas committee and explain to the Comptroller and Auditor General why the contract did not work out. The Accounting Officer and not the chief procurement officer is the person who appears before the Oireachtas committee to explain himself or herself. It would be a huge change of role if we said the chief procurement officer was responsible for all cost overruns.

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