Emer Higgins (Dublin Mid West, Fine Gael)

I move amendment No. 1:

To delete all words after “That” and substitute the following: “Dail Eireann resolves that the Transparency and Social Value in Public Procurement (Bill 2024) be read a second time this day 24 months, to allow for consideration of the complex legal issues in the Bill and how they interact with the Companies Act 2014 and the EU’s eForms (electronic procurement notices) Implementing Regulation; and also to allow for the European Commission to have completed its revision of the Public Procurement Directives, which the Commission have timetabled to commence in early 2026; and for such considerations to be taken into account in further scrutiny of the Bill"."

As the Minister for State with responsibility for public procurement, digitalisation and egovernment, I thank Deputy Farrell for giving us the opportunity to discuss public procurement on the floor of the Dáil Chamber. I have tabled a timed amendment to the Deputy’s Private Members' Bill, primarily for the following three reasons. First, because a review of public procurement directives is happening at an EU level and it is imperative that our national legislation is in compliance with EU directives, and indeed with our own legislation such as the Companies Act 2014.

Second, because, as the Deputy mentioned, we are in the middle of drafting our first ever national public procurement strategy and I firmly believe that any new national legislation needs to be drafted in the context of the feedback we have got from our public consultation. I thank the Deputy for her submission to that consultation. Third, because - and I hope this is good news - a lot of what is asked for in this Bill is actually already happening through eForms and I will speak a little bit about that shortly.

In addition, there are some legal concerns with the language in the Bill, in particular with definitions and I can elaborate on those. That is why I am asking that my officials be given two years to work at EU level to review and update legislation at a national level to transpose directives into Irish law and to finalise and implement our first ever national public procurement strategy to shape the future of public procurement in Ireland.

As Members know, public procurement is a fundamental, crucial component of democratic governance, of economic well-being and of sustainable development. From building roads and power stations to purchasing pharmaceuticals and securing waste-collection services, efficient use of public resources contributes to better delivery of services. Public procurement also serves as a significant policy instrument, which Governments can use, as the Deputy said, to propel changes in public service delivery, to create jobs, and stimulate private sector growth in a balanced way.

A well-performing public procurement system increases citizens' confidence in Government and private sector competitiveness, especially by levelling the playing field for small- and medium-sized businesses, including micro-enterprises, start-ups and social enterprises. I thank Deputy Farrell for her work in this space, which I know has been based on a shared desire to achieve better outcomes when it comes to procurement.

The 24-month deferral is necessary to allow for consideration of the complex legal issues in the Bill and to allow time for the European Commission to have completed its revision of the public procurement directives. The previous revision of the 2004 directives commenced in 2012 and was not completed until 2014. We do not know how long it may take for the European Commission to look at its revisions but it looks quite likely that Ireland may well - as I said in the committee yesterday - hold the pen on this, as this may happen while Ireland has the Presidency in the second half of next year. Once the directives have been made, time would then be needed to be allowed for the Office of the Attorney General to review the legal text for transposition into EU law. Hence, a timeframe of at least 24 months for the deferral is required for the legislative process, for when the EU directives become national law.

In relation to the data elements of the Bill, Ireland has implemented EU regulations on eForms. which are electronic public procurement notices. They already capture much of the information the Bill is seeking to introduce. I will focus now on three key areas in making the case to the House for the deferral of the Second Reading for 24 months. The Bill has the potential to contravene EU law and second, there are concerns over amendments to the Companies Act 2014. This Bill would pre-empt the new public procurement strategy and would duplicate current regulations on data capture.

Regarding the potential impact of the Bill when it comes to law, the Bill’s scope is related to that part of public expenditure which is covered by the EU procurement rules, deriving from Directive 2014/24/EU. However, that directive covers the procedures to be followed in relation to the award of a public contract and not the terms or the performance of the contract itself. The Bill therefore is erroneous in seeking to extend a legal application to give further effect to the terms of that directive into aspects outside of and beyond the provisions of those directives. There is no corresponding reference in the title of the Bill to the statutory instrument which transposed provisions of the EU directive into Irish law. These regulations are SI 284/2016, that is, the European Union (Award of Public Authority Contracts) Regulations 2016, which I will hereafter call the 2016 regulations.

It should also be noted that in October 2017, Ireland signed up to the Tallinn declaration on egovernment. A key aim of this declaration is to create a more efficient digital public administration across Europe. This marks a new political commitment at EU level on significant priorities towards ensuring high-quality, user-centric digital public services for citizens and seamless cross-border public services for businesses. The “once-only principle” provided for in this declaration sets out that citizens and businesses should only have to provide information to public administrations once, with data being reused across different services. The provisions of this Bill in respect of data gathering and reporting might not align with this “once-only principle”.

As mentioned, the Bill pre-empts the European Commission’s revision of Directive 2014/24/EU. The Commission has commenced the evaluation phase of the revision process, which has been ongoing for several months, and the Commission is focusing on competition, cost benefit, internal and external coherence of the legal framework governing procurement, relevance and EU added value, as well as transparency and integrity.

The evaluation will be followed by a regulatory impact assessment of the proposed legal text. Following the impact assessment, the Commission intends to publish the draft legislative proposal in early 2026 and has indicated it wants the legal process completed by end of 2026 or early in 2027, which may fall under Ireland's Presidency. At present, it is difficult to see how this ambitious timeline will be met, and the revision of the legal framework will extend beyond these current parameters. Work is already under way by the EU Commission that will impact on reporting requirements, eForms and the public procurement data project and it may also introduce conflicts with the current EU legislative framework. It is imperative that any domestic legislative proposals do not conflict with the current or future EU binding legal requirements on reporting in public procurement. Further consideration of such legal issues is required. Therefore, Deputy Farrell’s Bill would seem premature to this ongoing process. There is the potential that by the time the Bill is enacted, it may contravene the new EU directives.

It also has the potential to add to the complexity of the public procurement regime, which is against the trajectory of the European Commission and its intended reform of the public procurement regime in response to concerns on falling competitiveness in the public market, a deregulatory environment in Brussels and a desire to match public expenditure through procurement to the strategic needs of the EU.

I welcome the continued focus on simplification of EU regulations to boost EU competitiveness and to provide legal certainty to businesses. It is important that the implementation of EU regulations becomes more effective, striking the right balance between sufficient regulations to protect consumers and EU citizens while allowing our firms to innovate. The Bill has far-reaching effects beyond procurement, as it seeks to amend the Companies Act 2014. Section 8 of the Bill seeks to create an entirely new framework whereby the Registrar of Companies will be given a new, as yet unclear role in relation to public contracts and disqualified persons. This will require the sharing of information on all public contracts within the scope of the legislation and introduces new requirements whereby the Courts Service, the Registrar of Beneficial Ownership of Trusts and the Examiner of the High Court will be obliged to report to the registrar of companies.

The registrar of companies has extensive functions under the Companies Act 2014 in relation to the incorporation of companies; the registration of a range of post-incorporation documentation throughout the company lifecycle; the enforcement of the Companies Act 2014 filing obligations of companies and the making available of company-related information to the public.

All of the information filed with the Companies Registration Office is company specific and filed individually in respect of each company. As the fundamental role of the Companies Registration Office is the maintenance of a central repository of statutory information, as required by the Companies Act, it is not considered appropriate or desirable that the registrar have any function in relation to public contracts. There are in excess of 320,000 companies on the Register of Companies and it is considered likely that the majority are not engaging in public procurement with the State. Accordingly, only a small cohort of those on the register are likely to come within the scope of the Bill.

Section 8 also provides for the provision of prescribed information from the registrar of beneficial ownership of trusts. This information is held by the Revenue Commissioners and a matter for the Department of Finance but it should be noted that what is being proposed appears to involve a duplication of effort in that such information would also be maintained by the registrar of companies. Furthermore, there are limitations on access to trust information held by the Revenue Commissioners and restrictions would also apply if such information was to be provided to the registrar of companies.

The section also provides for the provision of information by an examiner of the High Court in relation to public contracts involving a person who is an undischarged bankrupt. It should be noted that section 132 of the Companies Act prohibits an undischarged bankrupt from being a director, a secretary or otherwise involved in a company unless he or she has the leave of the court.

This highly complex framework will need careful consideration and extensive consultation with the Companies Registration Office, the Department of justice and the Department of Enterprise, Tourism and Employment in order to understand the impact and extent of the proposal. Further consequential legislative change may be required. The requirement for contracting authorities to report on contract performance for all above-threshold competitions will be burdensome and would raise the potential for legal challenge, particularly if these reports are to be used in relation to access to future competitions.

The Government is already progressing programme for Government commitments to increase transparency and embed sustainable - including green and, as the Deputy specifically called out, social considerations - in public procurement. The programme for Government identified developing Ireland’s enterprise base as a focus over the next five years, from backing small businesses and start-ups to scaling up indigenous firms. The role that public procurement can play in this is emphasised by the Government’s commitment to review the public procurement process to ensure greater participation from SMEs, including micro-enterprises and social entrepreneurs.

This is why the Minister, Deputy Chambers, and I are leading on the first ever national public procurement strategy. It will set out the strategic direction of public procurement over the next five years. While public procurement can be a key lever in bringing about wider Government and societal objectives, it is not the primary lever. Therefore, a collaborative and unified cross-government approach is required to join up the use of public procurement to achieve greater value for money - not just price and sustainability but also the social clauses the Deputy mentioned, economic well-being and resilience.

The public consultation for the strategy was launched in March and ran until recently. We also held three strategy roadshows in Dublin, Cork and Athlone, which were attended by a variety of stakeholders including public bodies, industry bodies, utilities, suppliers, social enterprises and SMEs from across the country. Key themes consulted on included strategic public procurement, transparency, informed delivery, digitalisation and value for money.

Deputy Farrell made a submission to the consultation for the strategy, setting forth her plans for her Bill, which would allow me to produce a report for all contracts above a given threshold and that this information would be connected to other freely available public registers, thus improving the overall interoperability of the system. I thank her for making that submission. There are some really good ideas in there. It was one of 143 submissions we received and my officials are reviewing those in addition to the feedback we received from our regional workshops, which gave us the opportunity to delve into those issues in more detail. We will be using those ideas and the lived experiences of SMEs and central purchasing bodies to help shape Ireland’s first ever national public procurement strategy and I hope the Deputy agrees that it is important that those views are reviewed and responded to in terms of being included in the strategy before we implement new legislation in this space.

A clear ask from that consultation was the removal of red tape and unnecessary bureaucracy. That leads me to our third area of concern, which is that this Bill appears to duplicate current regulations on data capture. The duplication of legislation or of requirements is something we would like to avoid, in terms of the businesses that have been in touch with us. The data that the Bill seeks is already being captured under the European Commission’s implementing regulation 2019 for eforms, which are digital standard forms used by public buyers to publish notices on Tenders Electronic Daily, which is the official tendering platform for the EU. The primary purpose is to enhance transparency. The secondary purpose is to capture the data the Deputy mentioned. That is why we badly need them.

I have further information, which I am sure can be read into the record, on eforms but I will conclude because time is against me. The Commission continues to evolve these eforms as part of the longer term strategic objectives within the European Public Procurement Data Space, PPDS. It is expected that Ireland will in due course participate in the PPDS initiative which will further increase transparency of public procurement.

See this speech in context